Georgia's Automotive Market Shift Under the New Excise Tax Policy – Dual Opportunities of Hybrid Tax Exemption and Transit Corridor

On April 2, 2026, Georgia officially implemented a differentiated excise tax policy, replacing the previous six-year vehicle age import ban with a tiered excise tax system. Behind this policy shift lies a profound transformation in Georgia's automotive market. The new policy is redefining market rules across three dimensions.

Dimension One: Cost Reset by Vehicle Age and Displacement

Under the tax amendment approved by the Parliament of Georgia, the new policy imposes a tiered excise tax on passenger vehicles based on vehicle age: vehicles not exceeding six years of age are subject to an excise tax of 1.5 lari per cubic centimeter of engine displacement; vehicles exceeding six years are taxed at 4.5 lari per cubic centimeter, a direct threefold increase. Taking a 2.5-liter Toyota Camry over six years old as an example, the excise tax rises from approximately 2,000 lari to over 11,250 lari. For vehicles with larger displacement, the tax burden increase is even more significant.

Dimension Two: 60 Percent Excise Tax Discount for Hybrid Vehicles

The new policy also clarifies differentiated incentives: hybrid vehicles enjoy a 60 percent excise tax discount, pure electric vehicles are completely exempt from displacement-based excise tax, and right-hand drive vehicles are taxed at triple the standard rate. Hybrid models have become the fuel-alternative category with the strongest policy support and the most prominent cost-performance advantage. Taking a 2.4-liter Toyota Alphard not exceeding six years of age as an example, the tax under the previous rate was approximately 9,100 lari, while under the new rate it is approximately 3,100 lari, a total reduction of 65 percent.

Dimension Three: Duty-Free Transit Corridor via Poti Port

For auto traders serving the Caucasus and Central Asian markets, the key question under the new policy is whether vehicles enter Georgia's domestic market. Vehicles transshipped directly to third countries in transit, or remaining in the Poti Free Industrial Zone for re-export, are not subject to excise tax. The Poti Free Industrial Zone operates under a customs-free zone management system, where vehicles entering the zone are not required to pay import duties or VAT, preserving a duty-free channel for re-export trade.

Since the implementation of the new policy, structural changes in Georgia's market are becoming evident. From January to May 2026, Georgia imported 77,054 passenger vehicles, a year-on-year decrease of 14.8 percent, with total import value reaching $1.251 billion, down 20.2 percent year-on-year. The contraction of regional re-export trade is the core driver, with re-export volumes falling 29 percent year-on-year. At the same time, hybrid and pure electric models enjoy significant tax advantages under the new policy, with new energy vehicles becoming a differentiated market segment in Georgia.

For Georgia B2B dealers and importers, understanding and adapting to the new policy is the prerequisite for seizing market opportunities. Hybrid and pure electric models have the lowest tax burden under the new policy, with hybrids enjoying a 60 percent discount and pure EVs fully exempt from displacement-based excise tax. Suppliers capable of precisely matching hybrid and pure EV compliance requirements and capturing the policy dividends of Poti Port re-export trade will gain the advantage in this market adjustment.

LHZ Auto Georgia Operations Center focuses exclusively on B2B wholesale, leveraging the Group's TIR logistics network via the Trans-Caspian Caucasus corridor to reach Tbilisi and Batumi in 12 to 15 days, providing clients with full-chain trade services from needs analysis, model matching, compliance certification, to customs clearance and delivery.


FAQ

Question 1: What is the core content of Georgia's 2026 excise tax policy?

Vehicles not exceeding six years of age are taxed at 1.5 lari per cubic centimeter; vehicles exceeding six years at 4.5 lari, a threefold increase. Right-hand drive vehicles are taxed at triple the standard rate, hybrids enjoy a 60 percent discount, and pure EVs are fully exempt from displacement-based excise tax.

Question 2: How significant is the tax advantage for hybrids under the new policy?

Taking a 2.4-liter Toyota Alphard not exceeding six years of age as an example, the tax under the previous rate was approximately 9,100 lari, while under the new rate it is approximately 3,100 lari, a total reduction of 65 percent.

Question 3: How does the Poti Port duty-free transit corridor work?

The Poti Free Industrial Zone operates under a customs-free zone management system. Vehicles transshipped directly to third countries in transit, or remaining in the zone for re-export, are not subject to excise tax.

Question 4: How did Georgia's vehicle import market perform in 2026?

From January to May 2026, Georgia imported 77,054 passenger vehicles, a year-on-year decrease of 14.8 percent, with the core driver being the contraction of regional re-export trade, with re-export volumes falling 29 percent year-on-year.

Question 5: Which vehicle types have the greatest cost advantage under the new policy?

Hybrids enjoy a 60 percent excise tax discount, and pure EVs are fully exempt from displacement-based excise tax, creating significant cost advantages under the strict age limits and displacement-based tax system.

Question 6: What services does LHZ Auto Georgia Operations Center provide?

LHZ Auto Georgia Operations Center focuses exclusively on B2B wholesale, leveraging the Group's TIR logistics network via the Trans-Caspian Caucasus corridor to reach Tbilisi and Batumi in 12 to 15 days, providing one-stop solutions from needs analysis, model matching, compliance certification, to customs clearance and delivery.


LHZ Auto Georgia Operations Center ｜ Website: www.lhzauto.ge ｜ Guangzhou Nansha: 15220000555 ｜ Khorgos: 19259087888 ｜ Email: china@lhzauto.com