Rise in low-emissions, lower-power purchases follows car tax introduction
According to Transport Administration statistics, the car tax introduced this year has caused people to buy less powerful cars with lower emission levels than earlier.
Compared with the situation last year, CO2 emissions for newly registered vehicles in Estonia are 10 percent lower this year so far.
Petrol or diesel cars that have received an Estonian license plate have greenhouse gas emissions lower by a tenth.
At the same time, only half the number of vehicles were registered in the first seven months of 2025, compared with the same period in 2024.
More specifically this refers to both new and used cars and small vans which have been imported to Estonia, sold, entered into the traffic register, and are road legal and with an Estonian license plate.
Joel Jesse, director of the Transport Administration's traffic service, said the reason behind the fall was clearly the introduction of the car tax and the surge in purchases last year, ahead of the tax coming into effect.
The registration of cars running purely on fossil fuels, i.e. gasoline or diesel, is as much as 60 percent lower this year than last year, while the figure for hybrid vehicles is a 30 percent fall.
Electric vehicle sales, however, are up 5 percent over the same time frame, and every tenth car entered into the traffic register for the first time this year has been an e-vehicle, Transport Administration statistics show, around double the rate last year.
The overall figures for all vehicles, whenever they were registered, show a clear ascent for hybrids, too.
Over the longer term, hybrids have gone from seven percent of the total in 2020, to 17 percent three years ago, to nearly a half now.
"Whereas earlier the share of hybrid cars of all registered passenger cars and small vans was about a third, then this year, when the motor vehicle tax came into force, we see a trend for their share being 45 percent, or even a bit more," Jesse said.
Jesse urged caution on putting this all down to the advent of the car tax, which only began to be talked about in April 2023, however.
The number of pure gasoline or diesel-fueled cars in Estonia has been falling for three years in a row now, he noted, and global trends also play their part.
The range of hybrids offered by car manufacturers has been widening in line with that, so that from some car manufacturers one can no longer buy anything other than new hybrid models, he noted.
According to Jesse, the impact of the car tax is clearer when it comes to emissions data. CO2 emissions are 10 percent down for both new and used cars entered into the register this year.
"While earlier the specific emission of a petrol- or diesel-engine vehicle was on average 145 grams per kilometer, then starting this year it has been on average 125 grams per kilometer. This shows that people are buying vehicles which are lower powered and which also have a smaller registration fee and annual tax," he noted.
By models, in the first seven months of this year the most frequently registered have been Toyota Corollas (a total of 555), Škoda Octavias (472), Toyota Rav 4 (354) and Škoda Kodiaqs (290).
By make, the largest share of passenger cars and small vans from January to July were Toyotas (2,143), Volkswagens (1,335) and BMWs (1,326), though all of these figures are lower than the numbers for the same manufacturers before the car tax came in.
Of the 20 most-bought makes, only Tesla, which makes e-vehicles, has risen, by as much as 41 percent, to 306.
The 2 percentage-point VAT rate hike which entered into effect at the start of July is also thought to have contributed to the slump in car sales in Estonia this year.
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Editor: Andrew Whyte
