There is a good reason when you think about automobile manufacturing, you think of Detroit.
For a century car production has required such enormous industrial scale that it inevitably gravitated to just a few global centers – Southeast Michigan, Southern Germany and Eastern Japan. But as in so many areas of human endeavor, technology is changing a long-entrenched state of affairs, opening up opportunities for new regions to contribute significantly to the lucrative automotive supply chain.
For no country is that opportunity bigger than Israel.
The reason that Silicon Valley-based Tesla has become the most successful new automaker in decades is that it shares more DNA with your iPhone than with a 1995 Ford Taurus. The pace of change in automotive is accelerating. Cars with some degree of self-driving capability are already on the roads, and the coming years will see them proliferate and become much more advanced still.
As we described last month in the Detroit News, automakers will need to adapt to this rapidly changing landscape, and indeed many of them have established R&D facilities in Silicon Valley in recent years. What’s more, high-profile technology companies outside the automotive space are already positioning themselves for the “autonomous transportation economy.” Aside from Tesla, which straddles the auto-tech divide, Apple, Google and Uber all have programs known or suspected to be developing some variety of self-driving cars.
Among the major automakers, only General Motors has thus far established an R&D presence in Israel. However dozens of Israeli start-ups have successfully contributed to the automotive supply chain in recent years. The highest profile of these is Mobileye, which last year launched Israel’s largest-ever IPO on the basis of selling vision-based advanced driver assistance and other safety features to carmakers worldwide. Israel-based RedBend Technology, recently acquired by auto-supplier Harman, enables companies, including Tesla, to perform over-the-air updates to vehicles, just as we receive software updates to our smartphones.
Other young startups operating in Israel today are using proven military technologies to develop advanced sensors, applying semiconductor talent to vehicle communications, and unsurprisingly, several are trying to keep advanced and connected cars safe from cyber threats. Waze gave Israel a name in navigation and mapping, and now a host of newcomers are creating novel efficiency-drivers in mobility, both public and private. Telematics startups are finding ways to leverage the massive troves of data that cars can generate, to increase safety and efficiency. Even the failed effort with which we were associated, Better Place, yielded newfound talent and interest in vehicles amongst young Israeli tech professionals.
Large multinational technology companies are virtually all present in large numbers in Israel. As software, data and advanced hardware — all areas in which Israel has world-class capabilities — continue to capture an increasing proportion of the value of new vehicles, it is natural that future contributions to cars will come from Israel.
But there is the potential to do much more to catapult Israel to the center of the global autonomous transportation economy.
Israel’s new government must seize the moment, with policy to maximize the ability of the tech sector to lead a new wave of transportation innovation. Specifically, it should remove legal uncertainties around the testing and long-term deployment of driverless cars, including addressing liability issues. Next, it should follow the lead of jurisdictions like Michigan, which is building an enormous test facility for self-driving cars, and the UK, which launched four autonomous vehicle pilot projects, and set aside millions for testing and investment. To take one idea, an autonomous friendly corridor for testing and deploying technologies like autonomous trucks could be created between Eilat and Ashdod, potentially modeled off the U.S.’s Central North American Trade Corridor.
Focusing on transportation innovation, and specifically on emerging autonomous drive technology, will yield dividends for Israel that extend beyond the sector. Becoming a nearly deployment community for self-driving cars would allow Israel to save hundreds of lives a year on highways, would address its massive vehicle congestion problems, solve intractable urban parking problems, reduce oil dependence, massively improve air quality, and even reduce housing costs. When commuting time is dramatically reduced, so is incentive to pay exorbitantly to live nearer to downtown. This becomes magnified when time in transit can also be used productively or devoted to entertainment, free from the burdens of operating the car, navigating traffic and finding parking.
The vision of the Startup Nation leading the world into a safer, cleaner, more efficient and less costly transportation system – and modeling it for the world – is both pragmatic and Zionist. Let us not fail to seize this moment.
Written jointly by Michael J. Granoff and Olaf Sakkers of Maniv Energy Capital.