As the World Adopts Electric Vehicles, Israel Finds Itself in the Slow Lane

Experts blame the government and say the country lags behind in both regulations and infrastructure

The Jaguar Land Rover Automotive electric vehicle displayed at the New York International Auto Show, March 29, 2018
Bloomberg

The world is rapidly moving to electric vehicles, but Israel is lagging behind. The International Energy Agency estimated in a report last year that the number of electric vehicles rose to a record high of two million in 2016 and said there was a “good chance” it could reach between nine and 20 million by 2020 and between 40 and 70 million by 2025.

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Globally, 95% of EV sales including battery-electric, plug-in hybrid electric and fuel cell electric passenger light-duty vehicles, are in just 10 countries, the report said. But Israel isn’t among them: Today Israel has just 700 EVs (not including hybrids). The number includes buses, leftovers from the abortive Better Place EV initiative a decade ago and from a small fleet of vehicles operated by the Car2Go short-term rental program in Haifa.

How did Startup Nation become such a laggard in adopting cutting edge technology?

At a recent roundtable on the matter at the Technion-Israel Institute of Technology’s Samuel Neaman Institute, the consensus was that the government is at fault for not putting into place regulations or an infrastructure that would enable electric cars to get on the road.

Plug and ply the road
Number of electric vehicles on the road, millions

“As [car] importers, we run up against huge and difficult obstacles to any solution, like the issues of infrastructure and the role of Israel Electric Corporation. The Transportation Ministry has taken control of the issue. Every issue that comes up requires setting up a committee to reach any kind of decision,” griped one importer at the roundtable.

Israel legislated a Clean Air Law in 2009 that was supposed to address the problems of emissions, but nine years later officials have only begun to write rules for how the electrical grid can be used to power EVs and are adopting standards. Tax breaks for buying EVs are also being prepared, but Finance Ministry officials are worried that excessively generous reductions will cause a mass movement to EVs and deprive the government of billions of shekels in revenues.

A pilot program in Haifa for EVs that includes erecting power points around the city is also supposed to get under way and the Energy Ministry has allocated 25 million shekels for them over the next two years.

Government representatives traded blame at the roundtable. A Transportation Ministry representative said the ministry was determined to create the infrastructure for powering EVs.

“But there’s a serious problem of cooperation between the IEC, the Electricity Authority and authorities that issue statutory approvals for the construction of electrical installations,” he said.

“Therefore, the most important message to get out of here is that the process itself should be made much easier,” he said, before adding, “without easing standards – engineering standards and those for design and safety.”

One way Israel could fast-track its way to more EVs and reap environmental benefits would be to concentrate on electric buses. Public transportation accounts for only 1.5% of the vehicles on the road, but each diesel-powered bus belches out the equivalent off 33 ordinary cars on the road in a typical day. Using electric buses would cut overall emissions by 31.4%.

Switching public transportation to electric power is relatively easy because fueling stations can be concentrated at bus terminals and vehicles can be powered up at night when they are not in use. In China, some 170,000 electric buses ply the road, accounting for nearly all the global fleet. In Europe the numbers are smaller but growing quickly – from just 1,300 in 2016 to a forecast 2,500 in 2020 and 6,100 in 2025.

Leased cars, which are a big part of the market in Israel, could be another way for the EV phenomenon to take off fast. EVs’ lower operating costs – by one estimate just a sixth of a gasoline-power car – are an incentive for leasing companies to push the option with their customers.

In spite of Israel’s slow start, the country could catch up if regulations are put into place and automakers encourage importers to bring EVs to Israel.

Research conducted by the Technion for the Energy Ministry predicted that between 7,000 and 30,000 EVs could be on Israeli roads two years from now. That number, it said, could grow to between 83,000 and 127,000 in 2025 and to as many 500,000 in 2030.

That’s a wide range because it hinges on how quickly the government gets its regulatory act together and how quickly the world’s automakers retool their plants to make EVs and push dealers and importers to sell them.

On the latter account, Prof. Ofira Ayalon and Idan Liebes of the Neaman Institute wrote recently that Israel may now be reaching the inflection point.

“Already this year, 2018, we expect a major turnaround in the penetration of EVs in Israel. “In addition to the budgets that have been allocated for it, there’s been a sea change in the attitude of [car] importers and they are expected to bring in more popular electric models like Hyundai and Golf.”