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Here’s Why the Global Automobile Industry Is Turning to … Israel?

The Enduro wheel is designed to effectively reduce the vehicle's unsprung mass. In SoftWheel's approach the only parts which are not sprung are the rim and tire. softwheel.technology

Working out of a nondescript office building in a suburb of Tel Aviv, a small Israeli start-up has reinvented the wheel. No, the Softwheel isn’t square or triangular, but replaces traditional spokes or hubs with three shock absorbers.

“It started as an accident,” says Daniel Barel, the CEO of Softwheel, admitting the original plan was to come up with a better wheelchair capable of going up and down stairs. Threatened with the likelihood of having its funding pulled and the company shut down, Softwheel’s engineers came up with the breakthrough that could also be used for bicycles, motorcycles and possibly even automobiles.

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It might have been an accident, but it wasn’t dumb luck, but rather the sort of innovation that has been coming out of Israel with ever-increasing frequency in recent years as the country shifts from a traditional, agricultural economy to one based more and more on high technology. It’s something the consumer electronics industry has come to depend on, and now the global auto industry is turning to Israel’s entrepreneurs and engineers, as well.

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General Motors, for one, has a major research center devoted to the development of autonomous vehicles. Honda has set up a high-tech incubator aimed at attracting new innovations it can use in future products.

Israeli companies have already scored some big hits. Waze, the smartphone app designed to help motorists use crowdsourced data to steer around traffic jams, was developed in Israel and then sold to Google for a billion dollars.

Tel Aviv-based Mobileye has become one of the leading players in the global push to develop both advanced vehicle safety systems like forward collision warning, as well as the high-definition, 3D maps that will be needed for tomorrow’s autonomous vehicles. It counts virtually every major global automaker as a customer and has formed even deeper strategic ties with GM, Nissan and Volkswagen.

Israel has more venture capital money per capita than any other country. And though that funding pales in comparison to Silicon Valley, many California VCs are investing in Israel, as well, said Uri Pachter, director of Israel New Tech, an arm of the Ministry of Economy and Industry.

Over the last 15 years, about 15,000 start-ups have popped up, a third still in business — a fairly high rate of success, and the pace is accelerating. The auto scene may be young, but it is growing fast.

A key advantage for the Jewish state is that it also has more engineers per capita than any other country, said Ariel Sella, a longtime entrepreneur himself, and the managing director of the Institute for Innovation in Transportation.

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“It used to be an Israeli mother wanted her son to become a doctor,” said Sella. “Now it’s an entrepreneur.”

Waze put an automotive spin on Israel’s big software business, and that’s where many of the new start-ups are focusing. Redbend already allows smartphone makers to offer remote updates of their operating systems. The company now is focusing on over-the-air, or OTA, updates of vehicle software. That is becoming ever more important as automakers add digital safety, infotainment and powertrain systems.

About 5 million vehicles were recalled in the U.S. alone last year due to software-related problems, something that cost automakers about $400 million to deal with, according to Roger Ordman, RedBend’s marketing director. OTA updates could slash that bill — and allow makers to both add new features and sell new services, much like those provided by cellphone makers.

Meanwhile, several Israeli firms, including TowerSec, have taken a leading role in the issue of transportation cybersecurity. That has become a major concern for the industry ever since “white hat” hackers demonstrated the vulnerabilities vehicles face by taking control of a Jeep and sending it into a ditch.

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Israeli engineers and entrepreneurs are increasingly exploring high-tech hardware. That includes inventions like the Softwheel, along with some potentially new breakthrough battery technology that could overcome some of the biggest obstacles to widespread acceptance of electric vehicles.

Start-up Storedot is developing a proprietary version of lithium-ion chemistry that would allow its batteries to recharge far faster than today — which can in some cases twelve hours or more.

“You need to recharge in less than eight minutes, which is around what it typically takes to refuel,” said Erez Lorber a senior vice president with StoreDot.

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Another battery start-up, Phinergy, uses a very different chemistry, one in which sheets of aluminum are bathed in an alkaline electrolyte and water. Not only does the approach produce more power than lithium batteries, but motorists would refill rather than recharge the “Alunergy” battery after driving as much as 1,500 miles — range limited only by the size of the electrolyte tank, much like a gas car’s range is limited by the size of its fuel tank.

Not surprisingly, many of the innovations Israeli start-ups hope to bring to market are spin-offs of Israel’s big defense industry. Surrounded by mostly hostile neighbors, the country invests heavily in high-tech defense projects, and that’s likely to provide plenty of new innovations going forward. But other Israeli start-ups are simply looking for new solutions to old problems.

Softwheel, for one, didn’t come up with the better mousetrap, but CEO Barel is confident that a better wheel also will have customers — and investors — beating a path to his company’s door.