Monthly Review December 2025

Preface – Economic Climate

The Israeli economy concludes 2025 with a powerful recovery, marking a decisive turnaround driven by accelerated activity in the third and fourth quarters. This period represents a sharp transition from the contraction of the first half to a trajectory of rapid rehabilitation and financial stabilization. Economic indicators reflect a robust recovery in market stability: the Shekel appreciated significantly, from an average of ₪3.62 in January to ₪3.21 per USD in December, while monthly trade in goods and services expanded from 11.8 billion to 14.5 billion. Moreover, Economic indicators reflect a substantial rise in the standard of living: GDP per capita surged from approximately $53,300 in January to over $60,200 by year-end, underscoring the market's swift return to productivity. These encouraging trends signal underlying Israel’s economic strength. However, the high deficit and rising debt-to-GDP ratio remain critical concerns that require cautious fiscal management.

The Israeli economy is advanced and participates in the OECD organization. Its current GDP per capita is $60,257, and its growth rate in Q3 of 2025 was 12.4%.

Israel maintains a 4.7% deficit of the GDP from January 2025 to December 2025.

The debt-to-GDP ratio decreased to 68.5% in 2025, and the unemployment rate was 3.1% in December 2025. As of December 2025, the annual inflation growth rate inclined to 2.6%. In December 2025, the short-term interest rate remained at 4.25%, while the long-term interest rate stood at 4.09% (December 2025).

Statistical Profile

Society

Population (December 2025): 10.178 Million

Economy

GDP per capita (December 2025): $ 60,257

Inflation (December 2025) (Annual Growth Rate): 2.6% 

Current Account Balance (2024): 3.2% of GDP

Trade in Goods and Services (December 2025): $14.45 billion

Finance

US Dollar Exchange rate (December 2025, Avg.): NIS 3.2

Euro Exchange rate (December 2025, Avg.): NIS 3.76

Long-term interest rates (December 2025): 4.09% Per Annum

Short-term interest rates (December 2025): 4.25% Per Annum

Government

Debt to GDP ratio (2025): 68.5%

Deficit to GDP (January 2024 - December 2025): 4.7% 

Motorization

Level of Motorization (2024): 421 Vehicles/1,000 Residence

Innovation and Technology

Gross Domestic Spending on R&D (2023): 6.3% of GDP

Environment

CO2 Emissions (2024): 5.6 Tonnes Per Capita

Jobs

Employment Rate (December 2025): 62.9% of the Working-Age Population

Official Unemployment Rate (December 2025): 3.1% of the Labour Force

New Cars and CV Registrations

 New Passenger Car Registration: January-December 2025

Passenger car registration: an increase of 8% compared with 2024.

In December 2025, the Israeli passenger car market registered 10,004 new cars - a decrease of 21.7% compared with December 2024. Since the beginning of the year, 293,591 new cars were registered, an increase of 8% in deliveries compared with last year. Since January 91,877 new cars with electric propulsion (BEV+PHEV) were registered. The market share of pure EVs in 2025 closed at 19.8% compared with 24.7% last year.  

New Passenger Cars Registration According to Brands: January-December 2025

New CV above 3.5-ton Registration: January-December 2025

Commercial Vehicles above 3.5 tons registration: -28.8% decrease compared with December 2024.

In December 2025, the Israeli market for CVs above 3.5 tons registered a decrease of 28.8% in deliveries, with 600 new registrations, compared with 843 units in December 2024. Since January, 13,133 CVs and Buses have been registered, almost the same amount that was registered in 2024 (13,090).

New CV above 3.5-ton Registration According to Brands: January-December 2025

New Bus Registration According to Brands: Jan-December 2025

Israel's Auto and Auto-Tech industry

Herzliya's Transportation Revolution: Six startups in the Transportation Sector Will Make Herzliya a Groundbreaking City

Advanced sensors will improve road safety, including in difficult visibility conditions, electric vehicles will benefit from wireless charging, an analytical system will reduce traffic jams in real time, a smart dispatcher will coordinate shared trips that will reduce the number of vehicles on the road during rush hour, AI will analyse the traffic situation in real time and shorten routes, and even the traffic lights will be reprogrammed to reduce traffic congestion.  This initiative of the Municipality's Mobility and Transportation Innovation Division is part of Mayor Yariv Fisher's flagship plan to reduce private vehicle use from 70% today to 30% within ten years. Deputy Mayor and Transportation Portfolio Holder Eyal Fabian led the process in which dozens of startups applied, and six were selected to be allowed to use municipal systems to actually implement advanced technological initiatives that will completely change the travel experience in the city. The startups that will take part in the program are:

ITC, which develops smart software that simplifies and prevents traffic jams using computer vision and machine learning to predict traffic patterns and adjust traffic lights in real time.

ConnVAS offers a smart AI-based edge system that centralizes safety solutions and real-time traffic analysis. Includes smart crosswalks, road user behavior analysis, and integration of X2V communication between infrastructure and vehicles.

AIALAMA A smart ride-sharing hub via WhatsApp, which allows residents to easily coordinate shared trips, reduce traffic congestion and air pollution, and improve transportation availability.

Captain Up An innovative analytical system based on behavioral economics and big data, which analyses road user and infrastructure behaviors in real time. The system encourages desirable travel patterns, creates personalized routes and promotes alternative use of private vehicles

Elssway Wireless charging system for EVs, without cables or physical facilities. Provides central monitoring and control, controlled and safe charging, and is adapted to all types of vehicles.

A.D Knight LTD A company that develops advanced technology to identify road users in poor visibility conditions using innovative sensors that locate personal devices such as mobile phones and analyse their location, their movement routes, and their level of awareness of traffic, with the aim of improving safety and flow on the roads.

Arbe Robotics Radar Selected for Chinese L4 Vehicle Programme

A Chinese state-owned automaker has selected Hirain Technologies and Arbe Robotics’ ultra-high-definition radar for its Level 4 (L4) autonomous vehicle programme. Start of production is scheduled for December 2026, and thousands of vehicles are expected to reach the market during 2027.

Hirain’s LRR610 radar, powered by Arbe’s proprietary chipset, will be installed as the front-facing radar on the vehicles following several years of joint development between Hirain and Arbe. Arbe said its chipset features 48 receiving and 48 transmitting radio frequency channels, the largest channel array count in the industry, along with a dedicated processor chip for AI-based post-processing. Arbe will demonstrate its automotive-grade radar technology at CES 2026.

Innoviz Technologies Unveils InnovizThree, a Quantum Leap in Innoviz's LiDAR Solutions

Innoviz Technologies Ltd. (Nasdaq: INVZ), a leading Tier-1 direct supplier of high-performance, automotive-grade LiDAR sensor platforms and complementary software stacks, launched the Company's latest development: the InnovizThree LiDAR, with slimmer dimensions and lower power consumption, all while delivering exceptionally high-performance at a dramatically reduced price compared to InnovizTwo. The newly slimmed-down design allows InnovizThree to be seamlessly integrated behind the windshield or on the rooftop, offering automakers the utmost design flexibility for their needs.

Key features of InnovizThree include: A slimmer body, only 600 grams in weight, with significantly smaller lateral dimensions allowing for seamless deployment into the roof interior, behind the windshield, and in the front grille, providing OEMs with maximum installation flexibility. These dimensions are also ideal for AI-enhanced platforms such as humanoids, micro robotics, and drones. A lower cost, dramatically reduced by over 35% from the InnovizTwo, while enhancing performance capabilities, enabling superior long-distance accuracy and perception with detection ranges extending beyond 250 meters. Flexible operational modes, including a low-power mode at 13W for energy efficiency, enabling seamless behind-the-windshield installation without cabin noise disturbance. Innoviz is participating in the Consumer Electronics Show (CES) 2026, where visitors will be able to see for the first time a live demonstration of the InnovizThree.

Foresight Selected by Audi AG to Showcase its Terrain Intelligence Technology 

Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX), an innovator in 3D perception systems, announced that it was invited by Audi AG, one of the world’s most reputable car manufacturers, to participate in the Audi startup event “Minds and Makers”, organized by its partnering team. This technology innovation event brings together selected startups to present breakthrough solutions and explore future collaboration opportunities with Audi’s innovation teams.

Foresight was selected to demonstrate its terrain intelligence solution. The solution provides real-time 3D analysis of various terrains, delivering accurate depth perception and road and surface segmentation. Using dense 3D point clouds and support for both visible-light and thermal cameras, it maintains reliable performance even in fog or darkness. During the event, Foresight conducted in-car demonstrations and met with key Audi team members to explore collaboration, including a potential proof-of-concept (POC) project to validate the solution’s integration into Audi’s development processes and future vehicle platforms.

Valens Semiconductor and Imavix Engineering Combine to Offer the First MIPI A-PHY-Based Platform for Machine Vision; CIS Corporation Announces the Industry’s First A-PHY-Compliant Camera, Integrating the Valens VA7000 Chipset

Valens Semiconductor (NYSE: VLN) and imavix engineering s.r.o (Imavix) announced the first production-ready MIPI A-PHY-based platform for implementing the high-performance A-PHY connectivity standard in machine vision. The platform will allow camera vendors to design products that are smaller, more robust, and lower cost than traditional machine vision cameras. In addition, based on this platform, Japanese imaging solutions leader CIS Corporation has announced the first A-PHY camera module for machine vision. At just 22mmx22mmx22mm, the new camera is less than half the size of widely used machine vision cameras on the market, while offering major improvements in EMC robustness.

The platform is based on Valens’ A-PHY chipsets and Imavix’s IP, supported by machine vision software HALCON from MVTec and designed on an FPGA from Efinix. The solution inputs A-PHY and outputs 10Gbps GigE Vision (v3.0 based on RDMA), allowing for connectivity to IPCs widely used in machine vision. The IP core is now available, complete with a validated reference design for rapid product integration and development.

Imagry and eVersum announce partnership to offer autonomous driving buses in Japan and Europe

Imagry, a pioneer in HD-mapless autonomous driving technology, announced a strategic partnership with eVersum, a specialist in high-tech engineering and manufacturing of electric buses. Together, the companies will integrate Imagry’s field-proven AI-based autonomous driving technology into M3-category right- and left-hand drive (RHD/LHD) electric buses to address the growing demand for safe, reliable, and sustainable public transportation solutions.

There is a growing demand for full-sized buses that run on clean energy and improve service to passengers. However, there is currently an estimated 16% shortage of professional drivers, which is growing by at least 1% annually. The answer: autonomous buses, which provide excellent ROI as they can be used to extend hours of operation, increase route frequency, and expand areas of service, all while helping to alleviate traffic congestion, despite the driver shortage.

The fully integrated self-driving electric buses are available as either RHD/LHD 6.9-, 8.4-, and 9.9-meter models. Pre-certified for WVTA and GSR2, all meet the needs of public transportation operators (PTOs) in cities and towns, and operational zones (such as medical centers, airports, university campuses, etc.) around the world. With Imagry’s award-winning, AI-based perception, motion planning, and vehicle control technology, the buses offer HD-mapless, location-independent driverless operation that is rapidly deployable and easily scalable. The first eVersum bus integrated with Imagry technology is set for deployment in Japan in early 2026.