Tesla Autonomous Driving in Israel Faces Tax Delays and Regulatory Hurdles

Tesla's autonomous driving technology continues to advance globally, with Israel also taking steps toward its implementation. The company's Full Self-Driving (FSD) system, which currently requires the driver to remain attentive and ready to intervene, has received approval for operation or testing in several countries. The Israel Ministry of Transport has already authorized Tesla to conduct tests of the autonomous driving mode on the country's roads. However, Tesla owners in Israel still cannot simply pay, activate the system, and hit the road. Who is behind the delay?

The Taxation Bottleneck

Tamir Dortal, host of the podcast "Al HaMashmaut" (On Meaning), points to tax regulations as one of the major hurdles blocking Tesla's autonomous driving rollout. According to Dortal, the issue is no longer just with the Ministry of Transport, but rather with how the Israel Tax Authority classifies payments for activating the feature. "Tesla has already driven approximately one billion kilometers worldwide," Dortal said, adding, "The Ministry of Transport has approved it, so who is holding it up? The Tax Authority." The core question is whether a monthly subscription fee paid to Tesla for unlocking FSD capabilities should be subject solely to VAT, or if it should also face purchase taxes typically applied to certain car accessories. Previous reports have similarly highlighted taxation as a key issue requiring resolution.

Minister of Finance Response

The issue has reached Minister of Finance Bezalel Smotrich directly. During a previous interview on Dortal's podcast, the taxation dilemma was presented to him. Smotrich responded briefly, saying, "Sounds absurd, will be handled." However, according to Dortal, no concrete solution has emerged since that promise to resolve the matter and allow progress.

"Somehow Smotrich, his advisors, and official spokespersons are ignoring it," Dortal claimed. "They are not willing to resolve this event, so I must inform you. We will keep pressing until this issue is handled."

It is important to note that while Dortal criticizes government handling, the final implementation of FSD in Israel depends on a complex combination of taxation, regulatory, liability, and safety compliance.

Regulatory Promises and Future Outlook

This is not the first time the system's launch in Israel has been teased as imminent. Minister of Transport Miri Regev previously declared that FSD is "coming soon," stating that the country is in the "home stretch" of approvals. Elon Musk has also addressed the prospect of bringing the system to Israel, emphasizing that its arrival ultimately depends on local regulators. Meanwhile, despite ongoing tests and official promises, Tesla owners in Israel continue to wait for the feature to become publicly available.