As the world moves toward an era of self-driving cars, Israel is positioning itself to be the Detroit of the future.
The country has emerged as a global leader in the fast-growing field of driverless cars, as illustrated by Intel Corp’s more than US$15 billion acquisition of Israeli firm Mobileye NV last week.
Israel is now home to hundreds of start-ups that provide everything from censors to cybersecurity to data collection for autonomous vehicles, putting it alongside Silicon Valley at the forefront of an industry that many expect to take off over the next decade.
The Israeli “smart” transportation sector has attracted about US$4 billion in investment over the past four years, about half of it driven by two industry leaders, Mobileye and Waze Inc, said Lior Zeno-Zamansky, executive director of EcoMotion, a nonprofit group that promotes the smart transportation sector in Israel.
During that time, the number of Israeli start-ups in the sector has grown from 87 in 2013 to more than 500.
Virtually every major automaker has established a foothold in Israel, and senior executives visit the nation regularly. General Motors Co has already opened a research center in Israel, while Renault SA and Daimler AG are opening facilities as well.
Other companies, including Ford Motor Co, Honda Motor Co, Toyota Motor Corp, Subaru, BMW AG, Mazda Motor Corp, Hyundai Motor Co, Volvo Car Corp and Audi AG are all active in the Israeli market.
In a sign of this interest, EcoMotion’s annual conference in May is expected to attract more than 150 investors, up from just 10 in 2013, Zeno-Zamansky said.
EcoMotion is a joint venture of the Israel Innovation Institute, the Israeli Prime Minister’s Office and Ministry of Economy said.
Israel has long billed itself as a “start-up nation” for its thriving high-tech sector and entrepreneurial spirit, powered historically by veterans of murky technology units in the military. Major tech companies including Microsoft Corp, Apple Inc and Google all have research and development facilities in Israel.
Executives with expertise in such fields as cybersecurity, sensors, drone technology, communications and big data are now taking their knowledge to the automotive field, Granoff said.
However, there are still a number of obstacles to overcome. Companies are not certain how the cars will drive in snow or other bad weather, and it will be difficult for cars to be programmed to handle local traffic customs. Also, no one knows yet when the cars will be safe enough to remove human backup drivers, or if humans are prepared to turn over the driving to machines.
Dozens of Israeli firms are now in the race to find solutions to these and other challenges. Among the most promising are otonomo, which allows automakers, apps and service providers to exchange data such as speed, temperature and battery levels; Innoviz Technologies, Oryx Vision and VayaVision, makers of sensor technology and Argus Cyber Security, which protects cars from hackers.
Tel Aviv investment firm Flint Capital partner Levy Raiz said Israel’s autonomous vehicle industry is still smaller than other industries such as cybersecurity and medical devices.
However, he also said he sees rapid growth in the next five years.
Flint does not have any holdings in the driverless car sector, but expects to make up to 12 investments over the next two years, he said.