Tesla Advances Israel Entrance
9 December 2019 - calcalistech
Company representatives have met with local government officials to examine the legal demands Tesla will face as a local car distributor
Electric and autonomous car company Tesla Inc. is moving forward with its plans to enter the Israeli market. The company has hired local lawyers and custom brokers to accompany Tesla Europe representatives from the Netherlands to meetings with the Israeli ministries of transportation and energy, according to several people familiar with the matter who spoke to Calcalist on condition of anonymity. The purpose of the meetings was to examine the legal demands Tesla will face as a local car distributor, the people said.
Up until recently, Israeli law required companies importing cars to have at least 90% of their shares owned by Israelis, but, since September, a company only needs to be headed by an Israeli to operate. Last month, Tesla incorporated locally as Tesla Motors Israel Ltd. The company has also begun searching for a country manager, posting a wanted ad on its website.
One hurdle Tesla must surpass as it enters Israel is finding a way to service its vehicles. While Tesla is not required to set up its own auto repair shops in Israel and can in theory partner with existing shops, it has not been able to find shops that can adhere to its standards in Israel, the people familiar with the matter said. Shops already licensed to treat electric vehicles are bound by contracts with Tesla's competitors that will not allow them to partner with the new local player, the people added.
Over the weekend, Tesla posted to its website several wanted ads for Israel for a service manager, technicians, and service advisors. The service manager ad clearly states that "Tesla is soon to open our very first service location in Tel Aviv."
Tesla is also examining the possibility of setting up a network of charging stations in the country, the people familiar with the matter said. Though the energy ministry is subsidizing the setup of 110 such stations across the country, Tesla is likely to prefer setting up its own branded network, they added.
Tesla is also working to promote a change in Israeli legislation that would increase the planned maximum tax benefits for green vehicles from NIS 75,000 (approximately $21,600) to NIS 120,000 (approximately $34,500), allowing it to sell its basic model at a more affordable price of around NIS 200,000 (approximately $57,600), the people said. However, since the tax regulations are due to come into force in less than a month, it is unlikely that these efforts will bear fruit.