A New Recycling Fee in Russia: What It Means for Foreign Cars Over 160 HP
As of December 1, 2025, a revised procedure for calculating the recycling fee on imported passenger cars has come into effect. According to the new regulations, a base rate of 20,000 rubles is now subject to coefficients that depend not only on engine size but also on its power. This means that vehicles with more than 160 horsepower will now be subject to commercial rates – the fee could spike to hundreds of thousands or even millions of rubles, compared to previous fees of only a few thousand.
However, for vehicles with engines up to 160 horsepower, the preferential recycling fee has been maintained – authorities estimate this category accounts for about 80% of the vehicle fleet. Such cars will continue to be charged the previous low fee (3,400 rubles for new models and 5,200 rubles for those over three years old). Nevertheless, the combination of the new recycling fee and existing customs duties has led to a dramatic increase in the cost of importing foreign cars.
Who Will Face Price Increases on Foreign Cars?
The new regulations will particularly impact popular mid-range and premium cars in Russia with engines over 160 horsepower. For example:
- Toyota Camry 3.5: Additional recycling fee of approximately 2.9 million rubles (almost equal to the cost of the car itself).
- Kia K5: Additional fee of around 795,000 rubles.
- BMW M5: Additional fee of approximately 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 cost of purchasing a foreign car, including the new fee, will be several times higher than before.
Surge in Demand Ahead of the Increase
Anticipation of a sharp price increase has triggered a flurry of activity in the market even before the official changes took effect. In October 2025, approximately 12% of all passenger car sales were attributed to grey imports (almost 19,700 vehicles), as customers rushed to import cars under the old rules. Customs authorities in the Far East operated around the clock to process as many cars as possible before December 1.
At the same time, new passenger car sales reached a record 171,200 units in October – the highest in the past 3.5 years. Without previous discounts and promotions, the average purchase price rose by approximately 20% over three months. This confirms a strong short-term demand and the public's readiness to make purchases ahead of the significant changes in regulations.
Government Objectives: Protecting the Automotive Industry and Budget Revenues
In official statements, the new recycling fee is positioned as a tool to support the domestic automotive industry. According to First Deputy Prime Minister Denis Manturov, the new scheme aims to make local vehicle production in Russia more economically viable than importing. Minister of Industry and Trade Anton Alikhanov noted that cars under 160 horsepower represent about 80% of the fleet, implying that most private buyers are "not affected" by the new rules. President Putin has also discussed the need for a recycling fee to bolster local manufacturers.
However, due to the reduction in foreign car imports, the budget could face significant revenue losses. Experts estimate that annual shortfalls could amount to up to 300 billion rubles (in contrast, in 2024, recycling fees contributed approximately 1.1 trillion rubles to the federal budget, of which over 600 billion came from imports).
Consequences for Consumers and the Market
The increase in the recycling fee will instantly raise the "entry barrier" for the used import market and make many models unaffordable for private individuals. Ordinary consumers will face a significant rise in car costs: the recycling fee will constitute a substantial portion of the final price. This will lead to a drop in demand for high and mid-performance foreign cars and push car owners towards cheaper vehicles with engines up to 160 horsepower or domestic alternatives.
Overall, this signals a massive restructuring of the market: foreign brands will lose market share, while domestic manufacturers may receive an additional impetus. According to estimates from the Ministry of Industry and Trade, passenger car sales could decline by 13–16% in 2025 (down to 1.3–1.35 million vehicles), reflecting consumer reactions to rising prices and changes in tax burdens.
Future Dynamics: Recycling Fees until 2030
The increases in the recycling fee will not stop here. Starting January 1, 2026, rates will rise by another 25%, followed by annual indexation of 10–20% until 2030. Experts estimate that if this trend continues, by the end of the decade, the fee for the most powerful foreign cars could exceed 10 million rubles, rendering their import economically unviable.
- From January 1, 2026, recycling fee rates will increase by 25%.
- Annual indexation of 10–20% from 2027 to 2030.
- By 2030, the recycling fee for vehicles over 493 horsepower will exceed 10 million rubles.
Conclusions
The new rules for calculating the recycling fee have radically altered the conditions for importing foreign cars into Russia. The price of an imported vehicle now depends not only on its size but also on engine power, leading to a swift increase in prices for many models. In the short term, this will restrict access to expensive foreign cars and enhance demand for more affordable options, while in the long term, it will solidify the advantages of domestic manufacturers and reduce the presence of powerful foreign vehicles in the market.
For investors, these changes indicate a restructuring of the automotive market in Russia and the CIS. Foreign brands will lose market share, whereas investments in local assembly may become more attractive. At the same time, the overall volume of vehicle sales could decline: owning a powerful foreign car will become a one-time luxury due to the increased tax burden and import restrictions.
