Automotive Industry

STEERING IN NEW DIRECTIONS

As the global automotive industry morphs into the digital era, Israeli tech companies are leapfrogging to the top of the pack

The success stories are well-known: Google gobbling up the Israeli navigation app Waze for $1 billion in June 2013, Intels massive $15.3 billion takeover of Mobileye in May this year, the Gett (formerly Gettaxi) cab-and-courier-hailing service now active in over 100 cities, the public transport app Moovit with millions of users worldwide, and many others. Meanwhile, dozens of innovative Israeli start-ups are developing products for the automotive industry that nobody thought of before.

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A decade ago, there was no local auto industry to speak of. So how is Israel becoming a world leader in transportation technologies so quickly?

 

The digital era has redirected global trends from old-school manufacturing – engines, carburetors, etc. – to vehicles based on software, says Orlie Dahan, Executive Director of EcoMotion, a networking group for transportation technology companies in Israel.

The future is autonomous, electric and shared. Theres a need for big data, neuron networks, semiconductors, artificial intelligence, cyber optics, radars, lasers, sensors. In all these fields, Israelis come with a big competitive advantage. Also, Israel has a diverse community of out-of-the-box thinkers, Dahan believes.

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Testing new car technologies at the annual EcoMotion conferenceAsaf Kliger

Many of the new products are spinoffs from academia, she notes. New technologies are emerging from Israeli academic research. Mobileye came from the field of optics. 

Theres a lot of creativity and flexibility in the way Israeli entrepreneurs think and share ideas about new modes of transportation, agrees Ariella Grinberg-Felder, Innovation Manager at General Motors Advanced Technical Center in Israel, which opened nearly ten years ago.

GM was aware of Israeli talent across several domains and recognized that the industry is becoming high-tech. At the time, these talents were available in Israel and could be part of the transformation. It was lonely here for a while, but now we see many new developments coming out of Israel. With Mobileye working with most of the global car makers, my bet is that there will be an Israeli product in every car soon.

Other major players such as Ford, Mercedes Benz, Volkswagen, BMW, Honda, Volvo and Uber have since opened R&D centers or invested heavily in Israeli technology.

Dahan notes how the successful companies have managed to carve themselves a niche. Waze was the first one to acknowledge the power of a community in a product. Gettaxi and Moovit brought disruption to the market with their algorithms – now theyre everywhere. Mobileyes greatest strength is that they gave a safe system to the market. One of the most interesting things about Mobileye is how they strategize their products for sale in todays market, not tomorrows. Theres no shame in wanting to sell.

There was, of course, one massive flop: Better Place, the worlds first national network of electric car battery-swap stations, which crash-landed in May 2013, soon after takeoff. Better Place actually created a lot of good human capital, says Dahan. A lot of former employees left to other start-ups. There are ex-Better Place people everywhere.

International attention

In May this year, EcoMotion held its fifth annual conference at the Peres Center for Peace in Jaffa, showcasing over 200 Israeli transportation technology companies approaches to the new challenges. EcoMotion, a joint venture of the Israel Innovation Institute, the Prime Minister's Office (Fuel Choices Initiative), Ministry of Economy and the Israeli automotive and high-tech industry, was established in 2012 with the goal to implement innovation, to take this start-up nation into day-to-day life, as Dahan puts it.This creature was created close to the government, while also close to the market. Our 5,000-member community brings together investors, developers, academia, local authorities – it helps the players interact, collaborate and integrate technologies.

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The recent EcoMotion conference showcased over 200 Isreali transportation technology companiesAsaf Kliger

International investors are now following Israeli start-ups very closely, says Dahan. The whole world has its attention and focus on whats going on in Israel in technology development. And remember that many of the technologies that will shape our future started in garages.

The over 1,500 participants, including 300 from abroad, were exposed to Israeli innovations in autonomous driving, interconnected vehicles, cybersecurity, ride-sharing, drones, electric motorcycles and racing cars, bike-sharing and more. The old world was overly monopolistic – everything was done in-house, Dahan explains. The new world is one of synergies, of open data. This is what were seeing – more collaborations, with investors wanting to get to know the players from a very early stage.

Trends worth watching

The very concept of car-ownership will eventually become an anachronism, Dahan predicts. Were shifting from car ownership to mobility as a service. In the future, we wont need to own a car. Instead of the driving experience, well be talking about the journey experience.

This is where Israelis out-of-the-box thinking comes in. The industry is taking a leap forward, says GMs Grinberg-Felder. It takes creativity and innovation to shape the new ways people will consume transportation. We [Israelis] are not going to do everything from start to finish, but we can have a real impact as we enter a new transportation era.

She points to the role of GMs Israeli center in developing the Onstar system, GMs subscription-based connectivity platform that provides services such as in-vehicle security, hands-free calling, turn-by-turn navigation, automatic crash response and roadside assistance. It was a breakthrough when launched – navigation and connectivity are now part of every new car, and we have to keep one step ahead. We feed on increasing collaboration with the local start-up community, explains Grinberg-Felder.

Israeli start-ups are also making inroads in terms of electrics. Israel has a lot to offer, with some great grid management and battery companies, says Dahan. For example, DRiiVZ, which operates electric vehicle charging networks in North America and Europe, is becoming global now.

Another Israeli company making waves is Via, a flat-rate, real-time ridesharing network reached by mobile phone. The idea was inspired by the Israeli sherut shared taxi service, says Oren Shoval, co-founder and CTO. Our operating system produces dynamic public transportation. You book a seat, and a shuttle will pick you up within minutes. The fleet is dynamic, the scheduling is dynamic – its far more efficient.

The operating platform was launched in New York in late 2013, successfully applied to Chicago and Washington DC, and is now spreading to local transportation operators in other North American and European cities. The New York-based company, which has already provided tens of millions of rides and now employs over 100, kept its engineering team in Tel Aviv. People here are very energetic and motivated. They know how to work together. Theyre extremely bright and move fast. Theyre always open to new technologies and listen to customer feedback, says Shoval, who formed the company with fellow Israeli CEO Daniel Ramot. Israel is doing great because we have a lot of talented and motivated people. Mobility technology is moving – theres lots of potential here.

Sharing the information

As cars become increasingly computerized and interconnected, they generate more data: what their users are doing, fuel levels, tire pressures, speed, trip duration and so on. And with the advent of autonomous vehicles, the amount of this data is increasing multifold.

Herzliya-based startup Otonomo has come up with an ecosystem for sharing this information with third parties such as insurance companies, fleet managers and car manufacturers via its cloud-based marketplace – effectively acting as broker between end users, manufacturers, app developers and service providers.

The industry is going through a transition, says Yael Rivkind, Partnership and Marketing Manager at Otonomo. Massive amounts of data are being generated. This data can be leveraged to introduce more and maximize products, with embedded solutions making it easy to access different services.

Great things are expected from the connected car data platform. In less than two years, the 45-strong startup Otonomo has raised $37 million. Strong investors joined us from Day One, while new strategic investors have come on board this year, says Rivkind. As well as Daimler-Mercedes and BMW, were working with seven other companies that we cannot mention.

As an Israeli company, says Rivkind, Otonomo is well positioned. We have a great advantage – a broader view of the transportation needs of the future, of smart cities. We understand the requirements and have a good view of where the industry is headed. Its all about timing. Three years ago, we wouldnt have succeeded the way we are today.