Israel carves place as automotive technology powerhouse

Israel had plenty of technology expertise before discovering the auto industry. Its success is understanding how its expertise applies, Ellencwieg said.

“The level of innovation actually starts with the military ecosystem,” he said.

Throughout much of its history, hostile neighbors have surrounded Israel. Although it has made peace with some, it still faces threats from Gaza, Lebanon, Syria and Iran.

“It is a country that needs to innovate to keep a technological advantage, to keep itself safe,” Ellencweig said.

Imaging sensors, chips and software are at the core of many of the country’s weapons systems. Cybersecurity, an automotive technology growth area, is another discipline required for national defense.

But Israel’s success in spawning automotive and other technology companies also is linked to its cultural and educational systems, said Eran Ofir, CEO of Imagry, a Haifa autonomous driving system developer, and Barel of Ree Automotive.

Barel remembers his third-grade daughter coming home from school with a group assignment to create a consumer product. Her classmates settled on a dog training device and crafted a mockup from shoe boxes. Members of the group had to develop a budget and a marketing plan. The budget came into balance only after Barel’s daughter learned the team could get shoe boxes without purchasing shoes.

There is a tradition of learning from failure, something every entrepreneur is sure to encounter, Ofir said.

“We are being taught from a very young age to experiment, to try to challenge everything that we are being taught,” he said.

Later, Israelis serve in the military, some in technical units.

“They’re running small groups. They’re managing projects,” said Eitan Gertel, executive chairman of Opsys Technologies, a solid-state lidar company in Holon. “They develop technology for specific targets in the most efficient way. They get budgets. It is very entrepreneurial.”

People come out of that environment and look to transfer their knowledge to civilian applications, he said.

Israel also benefits from access to capital. “You have an environment in Tel Aviv where you can see 10 VCs in one day,” Gertel said. “The access to venture capital resources is pretty immediate, at least the seed stage round.”

Israeli entrepreneurs will continue to look at the automotive sectors, said Mike Granoff, managing partner of Maniv Mobility, a venture capital fund in Tel Aviv and New York.

“There is more and more need for software and innovation around automotive and mobility,” Granoff said. “Israeli entrepreneurs are looking for that kind of a challenge.”