The price of used cars in Azerbaijan is expected to increase starting January 1, 2026, as new tax exemptions will apply only to fully electric vehicles.
According to the draft law “On the State Budget of the Republic of Azerbaijan for 2026”, imports and sales of electric cars will remain exempt from value-added tax (VAT) for one year. However, hybrid and plug-in hybrid vehicles will no longer benefit from the same privilege.
Until now, both electric and hybrid models were exempt from VAT and some customs duties, a policy that made them more affordable and significantly reduced demand for used cars.
Transportation expert Aslan Asadov told Bizim.Media that the earlier VAT exemption was an important step toward a “green economy”:
“Hybrid and electric cars cause minimal environmental damage compared to older vehicles. Most cars on our roads are more than ten years old and emit high levels of CO₂,” he said. “The three-year tax exemption encouraged renewal of the vehicle fleet, but that period is now ending. From 2026, only electric vehicles will remain tax-free.”
Asadov added that the decision will likely raise the prices of hybrid and plug-in hybrid imports, and also push up the cost of used cars on the domestic market.
“Starting in the New Year, we will see price increases in the used car market. It’s difficult to predict how long this trend will last,” he noted.
