A change in Iranian trade law could help promote the sale of hybrid and electric vehicles. EVs and hybrids with engines 2.5-liters or smaller are no longer subject to import tariffs, reports the Tehran Times. Iran intends to completely eliminate car import tariffs within two years, according to Iranian Member of Parliament Ali Alilou, who has also urged the government to stop pumping money into the auto industry.

Iran has recently made moves to improve air quality with hybrid vehicles, such as Iran Khodro's Runna plug-in hybrid. Industrial Development and Renovation Organization of Iran has also sponsored a "National hybrid car project." Iran's automobile industry makes up ten percent of the country's gross domestic product, and is second only to its oil industry. Under former president Mahmoud Ahmadinejad, automotive import duties increased as much as 90 percent in 2013. Experts blame this for lower quality vehicles from Iran's domestic automakers, including Iran Khodro, Pars Khodro, and Saipa.

Doing away with the tariffs is expected to foster competition and bring a higher level of quality back to the Iranian automotive industry. Some fear, though, that these lower duties could do more to hurt Iran's automotive sector, which could be trampled by larger, more established international competitors. Iranian automakers are asking for a continuation of the high tariffs, as well as a bailout for the ailing sector, which owes as much as $4 billlion in debt.

Iran's automotive industry is rife with uncertainty, to be sure, but the eliminating tariffs on EVs and hybrids could help predict the trajectory of the country's car market should things play out the way they are currently planned. It could also have the additional benefit of positively impacting air quality in places like Tehran.


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    • 1 Second Ago
  • 5 Comments
      2 wheeled menace
      • 22 Hours Ago
      Cool to see this happening even in the thick of oil-istan :)
      goodoldgorr
      • 22 Hours Ago
      Im glad to see one of these middle-east countries doing something about air pollution. Im minding if they use their natural gas that come from crude oil mining or if they flare it. I know that in most place that mine crude oil they flare the natural gas , they do that in u.s.a . That is silly to flare natural gas, they should use it for cars and trucks. Also their electricity can be made with natural gas to charge the vehicles. So please build a natural gas infrastructure immediately and stop the flaring. This is goodoldgorr that say to do this. I have almost 10 years in experience in green car blogging and I noticed that there is few improvement in air pollution and the meteo is awful bad with big storm, drought, rouph winters, choky smog, nuclear waste everywhere, etc.
        Nick Kordich
        • 22 Hours Ago
        @goodoldgorr
        For others minding the same, Iran flared more gas than the United States in 2011. The data for 2012 and 2013 are still pending, but US gas flaring tripled between 2008 and 2011, so it's possible that by now, the US has been burning off more gas than Iran for over a year. http://go.worldbank.org/G2OAW2DKZ0 It doesn't cost anything to burn off natural gas, but there's a capital investment of systems to capture it. The system may result in a net win, but they key is that it doesn't cost anything not to do it and reducing the up-front cost reduces the time to net profit. In a competitive environment, the lower initial layout often wins, especially if there's no 'artificial' penalty on the back end. From the investment side, getting money out to reinvest elsewhere may be better, even if there's a net profit still to be had in a longer-term commitment. The 'winnings' from the first project allow the fast-moving company to exploit projects more quickly than a slow-moving one that has a better long-term plan. It's an excellent example of how the free market may not choose the most efficient or most profitable option in favor of providing the flexibility of a shorter term. The US is losing a natural resource without compensation. If drilling companies were charged royalties for gas they burned off just as they are for gas and oil they sell, it would have netted the US $50 million in revenue in 2013 alone, even at today's low natural gas prices. Not only that, but other areas of the economy would have been better off: the higher capital investment translates directly toward more US gas capture equipment manufacturing and installation labor, as well as more having natural gas available on the market. It's not a zero-sum game - the additional equipment, labor and gas mean additional money in private hands and tax revenue based on income or sales tax that could well exceed natural gas royalties. http://news.nationalgeographic.com/news/energy/2014/05/140522-gas-flaring-costs-taxpayers-in-us-report-says/ This can be turned around - as I said, natural gas flaring in the US tripled in *three years* time, so it's not as if this is simply "how it's always been done." If not for the environment, for $50 million-plus a year in tax revenue to offset our national debt, or for higher profits for American companies being a bit shortsighted on this matter, then do it for goodoldgorr.
      Dave
      • 22 Hours Ago
      Is anyone besides China selling cars to Iran these days?
        NestT
        • 22 Hours Ago
        @Dave
        About 12% of new car sales in Iran are imports. About 70k units. 60% of those are Hyundai/Kia. Toyota/Lexus,BMW,and Peugot sell in Iran. Plus the Chinese. And whole lotta grey market Mercedes.