Driverless car Picture: BLOOMBERG
Driverless car Picture: BLOOMBERG

Jerusalem — Intel’s $15bn purchase of Israeli firm Mobileye could help fuel the country’s rise in the driverless car industry — not as a builder of vehicles, but as the brains behind them.

Monday’s deal, the largest to date in Israel’s tech sector, could help boost trade despite the fact that no commercial cars are assembled in the country.

The self-styled "start-up nation" has no real tradition of vehicle manufacturing: an ignoble previous stint in the 1960s and 1970s produced the fibreglass Susita car, parts of which were edible for camels, according to legend.

But the rise of new technology, including driverless cars, has opened space for the tech-savvy country to excel.

In 2013, Google paid more than $1bn for Waze, an Israeli crowd-sourced app that plots the quickest journeys in real time, followed by Monday’s $15bn Mobileye deal.

The company makes advanced driver assistance and accident avoidance systems for car manufacturers and has already collaborated with Intel and BMW on self-driving car technology.

It was founded in 1999, but Yossi Vardi — considered one of the fathers of Israel’s high-tech start-up scene — said the automobile industry’s growth in Israel really began in 2007 when General Motors established a research and development centre.

"It surprised everybody that a company like General Motors would go to Israel to source innovation and technology." In the past three years, Vardi said, Honda, Ford, Volkswagen, Volvo and others have followed suit.

Most Israeli companies in the field are not involved in production, but in ways to make driving more efficient. Among them are Otonomo, which provides in-depth data on car usage; Argus, one of the market leaders in protecting cars from cyber hacking; and VocalZoom, dubbed "Siri for cars".

Elan Zivotofsky, general partner at the OurCrowd equity platform that invests in a number of companies working on autonomous cars, compared it to smartphones, laptops and other sectors in which Israeli technology is heavily used, but that the final products are still made elsewhere.

"Israel is not going to be in the business of building cars," Zivotofsky said. "Israel is in the business of building some of the
most important core elements that will enable autonomous driving."

Vardi said the country’s military experience, with some of the world’s most advanced monitoring, laser-guiding and other technologies, placed it in a good position.

"When you drive a car, you cannot stop the car and wait 15 minutes for the computer to process. It has to be immediate.

"This kind of talent you find in the military — in airplanes etc."

The effect of Mobileye could be significant, said Yaniv Feldman, editor-in-chief of the Israeli Geektime tech blog.

There are dozens of companies in the sector and Feldman said Israel was already one of the leading players in autonomous driving behind the US and China.

In 2016, about $70m had been invested in automotive technology in Israel, he said, but that would increase "somewhere between 25% to 40%".

None of the other companies was as advanced as Mobileye, though, he said.

Aquarius Engines, an Israeli firm that claims to have developed a radically improved combustion engine, is seeking $10m in a second round of funding.

Chairman Gal Fridman said it had already noticed a change. "Since Mobileye happened, our phone is ringing all the time.

"Until now, when I came and told [car companies] I was an Israeli developing an engine, it was a bit odd as the country has no history of automobiles.

"Now, after Waze and Mobileye, we have more credibility, and doors will open easier," Fridman said.


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