Israel’s mission to become a major automotive industry player took a step forward this year when the country adopted Government Resolution No. 2316. A main objective of the 250 million shekel (59.2 million euro) initiative is to “encourage Israeli industry, entrepreneurship and research in the field of smart mobility and to position Israel as a global leader in the field.”
Two months later, Intel Corp. said it would pay $14.7 billion (12.5 billion euros) for Mobileye, a Jerusalem-based maker of autonomous vehicle technology, a deal that will move Intel’s automotive research teams from the United States to Israel.
Israel is proving to be a hot spot for high-end automotive technology. Last year, Volkswagen AG made a $300 million strategic investment in the Israeli ride-hailing provider Gett, and Ford Motor Co. bought computer vision and machine-learning company SAIPS AC. BMW AG invested in the Israeli transit app Moovit in 2015.
More recently, Porsche announced in June it has invested an “eight-figure sum” in the Israeli venture capital funds Magma Venture and Grove Ventures, both of which focus on artificial intelligence for the automotive field. Porsche also has established an “innovation office” in Israel “to guarantee access to technology trends and talent,” the automaker said in a release.
Daimler AG and General Motors also have r&d centers in the country.
“We’re in the big leagues,” says Koby Simana, CEO of Israeli industry monitor IVC Research Center, told Automotive News Europe. He added that if a company hasn’t already established itself in the country it needs to be worried. “Your competitors are already here.”
Said Porsche CFO and IT chief Lutz Meschke in the release: “Israel is a key market for IT experts and engineers. It has more startups per capita than any other country in the world.”
Israel’s automotive technology sector has about 400 startups, Simana says. Most of those companies are focused on providing solutions for autonomous and connected cars, as well as securing the data coming from and going to connected vehicles.
The success of Mobileye has been crucial to the boom.
“They showed everyone that an Israeli company could compete on the global level,” Simana said, adding that in the past the country was mostly known for providing the r&d grunt work that resulted in breakthrough products for U.S. and European companies.
Now it is the Israeli entrepreneurs who are making the game-changing contributions. Simana believes that r&d will continue to be the driving force behind Israel’s rising profile in the automotive sector, which is what the country’s leaders want.
“When you provide the right tools and encourage r&d you get innovative solutions,” Anat Bonshtien, chairman and director of the Fuel Choices and Smart Mobility Initiative within the Prime Minister's office, told Automotive News Europe. “Advancing cooperation between the government, universities and industry leads to entrepreneurial programs,” she added.
This story is part of the Automotive News GUIDE TO ECONOMIC DEVELOPMENT IN THE AUTO INDUSTRY. See more by clicking here.