A New Recycling Fee has Come into Effect in Russia, Significantly Increasing the Cost of Foreign Cars Over 160 HP: Analysis of Changes, Impact on Buyers, and Price Forecasts Until 2030
As of December 1, 2025, a revised calculation method for recycling fees on imported passenger cars has taken effect. Under the new rules, in addition to the base rate of 20,000 rubles, coefficients are applied that depend not only on engine displacement but also on power output. This means that cars with engines over 160 HP are now subject to commercial rates—resulting in fees that could reach hundreds of thousands or even millions of rubles, rather than the previous few thousand rubles.
However, for cars with engines up to 160 HP, the preferential recycling fee has been maintained—government estimates suggest this category includes about 80% of the vehicle fleet. Such cars continue to be subject to the old low rates (3,400 rubles for new models and 5,200 rubles for vehicles older than three years). Nonetheless, the combination of the new recycling fee and existing customs duties leads to a sharp increase in the cost of importing foreign vehicles.
Who Will See Price Increases for Foreign Cars and by How Much
The new rules will particularly impact popular mid-range and premium class vehicles in Russia with engines over 160 HP. For example:
- Toyota Camry 3.5: additional recycling fee of approximately 2.9 million rubles (almost equivalent to the cost of the vehicle itself).
- Kia K5: additional ~795,000 rubles.
- BMW M5: additional ~4.0 million rubles.
- Lixiang L9: recycling fee increased from 3,400 rubles to nearly 2.0 million rubles.
These examples illustrate the scale of the price increases: the total purchase price of a foreign car, including the new fee, will be several times higher than before.
Surge in Demand Before the Hike
Anticipation of sharp price increases has triggered a surge in the market even before the official changes took effect. In October 2025, nearly 12% of all passenger car sales were attributed to "grey" imports (almost 19,700 vehicles), as buyers rushed to bring in cars under the old rules. Customs offices in the Far East transitioned to round-the-clock operations to process as many vehicles as possible before December 1.
Simultaneously, sales of new passenger cars reached a record 171,200 units in October, the highest in the past 3.5 years. Meanwhile, without previous discounts and promotions, the average purchase price increased by approximately 20% over the three months. This confirms the high short-term demand and readiness of consumers to make purchases before the drastic changes came into effect.
Government Objectives: Protecting the Domestic Auto Industry and Budget Revenues
Official statements present the new recycling fee as a tool for supporting the domestic automotive industry. According to First Deputy Prime Minister Denis Manturov, the new scheme is designed to make local car production in Russia economically more advantageous than imports. Minister of Industry and Trade Anton Alikhanov noted that cars with engines up to 160 HP make up about 80% of the fleet, implying that most private buyers are "not affected" by the new rules. President Putin has also emphasized the need for a recycling fee to support local manufacturers.
Nevertheless, due to reduced imports of foreign cars, the budget may miss out on substantial sums. Experts estimate that annual revenue losses could reach up to 300 billion rubles (for comparison, in 2024, the recycling fee contributed approximately 1.1 trillion rubles to the federal budget, with over 600 billion rubles from imports).
Consequences for Consumers and the Market
The increase in the recycling fee will instantaneously elevate the "entry barrier" for the used foreign car market and render many models inaccessible to private individuals. Average consumers will face a significant increase in vehicle costs: the recycling fee will constitute a noticeable portion of the final price. This will lead to a decrease in demand for foreign cars with medium and high power outputs and push vehicle owners toward more affordable cars with engines up to 160 HP or domestic alternatives.
Overall, this indicates a massive market restructuring: foreign brands will lose market share, while domestic manufacturing may receive an additional boost. According to estimates from the Ministry of Industry and Trade, in 2025, passenger car sales could decline by 13-16% (down to 1.3-1.35 million units), reflecting consumer reactions to rising prices and changing tax burdens.
Future Dynamics: Recycling Fees until 2030
This increase in recycling fees will not be the last. From January 1, 2026, rates will rise by an additional 25%, followed by annual adjustments of 10-20% until 2030. Experts estimate that if this trend continues, by the end of the decade, the recycling fee for the most powerful foreign cars may exceed 10 million rubles, making their import economically unfeasible.
- From January 1, 2026, recycling fee rates will increase by 25%.
- Annual indexing of 10-20% in 2027-2030.
- By 2030, the recycling fee for vehicles over 493 HP may exceed 10 million rubles.
Conclusions
The new regulations for calculating the recycling fee have radically changed the conditions for importing foreign cars into Russia. The price of an imported vehicle is now dependent not only on displacement but also on engine power, resulting in a swift rise in prices for numerous models. In the short term, this will limit access to expensive foreign cars and strengthen demand for more affordable alternatives, while in the long term, it will entrench the advantages of domestic manufacturers and reduce the presence of powerful foreign cars in the market.
For investors, these changes signify a reconfiguration of the automotive market in Russia and the CIS. Foreign brands will lose market share, while investments in local assemblers may become more attractive. At the same time, the overall volume of car sales may decrease: ownership of a powerful foreign vehicle will become a luxury due to increased tax burdens and import restrictions.
