Vehicles that drive themselves are no longer just fantasies. Driverless Cars, also called Autonomous Vehicles (AV), became mainstream in 2010 when Google unveiled a car that drove itself on California freeways. Today, every major auto manufacturer and several large tech companies are working on developing autonomous vehicles. It is no longer a question of if, but when fully autonomous cars will be available for the masses.
The benefits of automatous vehicles are immense. The first obvious one is improved safety. Full AV will dramatically reduce the deaths from car accidents that occur through human error. In Israel alone 357 people died on the road last year and the number keeps on growing every year (and is much higher than the notorious terror related casualties). But besides safety, AV offers many additional benefits. It lessens road congestion, improves fuel efficiency, reduces carbon emissions, reduces dependency on car ownership (it makes more sense to share an AV), and improves quality of life through better mobility (young or elderly people can “drive”). Morgan Stanley estimates that AV will unlock $1.3 Trillion of economic/safety/environmental value per year to the US economy alone, with global savings estimated at over $5.6 Trillion!
The industry divides car automation into five levels of sophistication, ranging from fully driver-controlled (level 0 or L0) to complete computerized operation (level 4 or L4). Many high-end cars already have L2 capabilities, and Tesla even has L3 ones. L4, wherein the car becomes 100% autonomous (no human intervention and ultimately no steering wheel), is currently being tested by Google and others. There is no doubt that the technology piece for level 4 is solvable and many analysts estimate that by 2020 autonomous cars will be ready for mass production. Yet, one of the major hurdles for adoption at that point will be regulatory approval.
Several countries around the world realize the huge safety, economic, environmental, and technological benefits in being the first to adopt AV. Singapore, for example, decided to be one of the first, if not first, markets to have fully autonomous vehicles on their streets for citizens, and the government has already committed to funding AV shared car service pilots (where cars are shared instead of owned) beginning this year. The government has set an authorized zone for selected amount of AV within Singapore City to demonstrate functionality to the public.
Israel has every incentive to race towards being the first to allow fully autonomous vehicles. First, the country’s small size is a huge advantage for AV which require mapping of the roads by advanced radar systems before being able to drive autonomously. In addition, the small size of the country makes it easier to adopt battery-powered vehicles which are designed by the majority of the new AV vendors (Shay Agassi’s Better Place vision coming to life a decade later). This is one of these rare opportunities where being a small isolated “island” is actually an advantage. Second, Israel is known for being a technology hub and already has more than 150 startups and research groups operating in the transportation space. The country is home to one of the most notable companies in the AV space, Mobileye, valued at $8 Billion market cap. Just imagine how many more companies Israel can produce? Becoming a world hub for AV will attract investments, innovation centers, and research from companies all over the world that will help boost the local economy. Finally, AV can help solve the country’s lack of good public transport system. The Tel Aviv municipality has recently started working on building a light train system. This gigantic project is expected to cost Billions of dollars and launch the first line in 2021 in the more optimistic scenario. AV allows to operate driverless taxis or buses at a much lower cost and in a more efficient way than many existing transportation systems.
It seems like the Israeli Transportation Ministry understands the importance of autonomous vehicles, and has already authorized Mobileye and Audi to test several of these on the Israeli roads. However, encouraging AV is a strategic decision for an oil-constrained, small country which should be pushed by the government and be set as a national priority. We just don’t want to miss this train.