Monthly Review May 2026

Preface – Economic Climate

The Israeli economy maintained a stable trajectory in May 2026, characterized by consistent market indicators and a notable improvement in fiscal metrics. Specifically, the deficit-to-GDP ratio narrowed to 3.75%, marking its lowest level since 2023. Other macroeconomic figures align with this continued stabilization: the Shekel traded at an average of ₪2.895 per USD, the strongest it's been since the 1990s. Coupled with stabilized inflation and a reduction in short-term interest rates, the current economic climate offers a favorable environment for continued commercial expansion and investment.

The Israeli economy is advanced and is a member of the OECD. Its current GDP per capita is $64,831, and its growth rate in 2026 Q1 was 3.3%. Israel maintains a 3.75% deficit of the GDP from June 2025 to May 2026.

The debt-to-GDP ratio decreased to 68.5% in 2025, and the unemployment rate stood at 2.8% in May 2026. As of May 2026, the annual inflation growth rate remained at 1.9%. In May 2026, the short-term interest rate decreased to 3.75%, while the long-term interest rate stood at 3.5%.

Statistical Profile

Society

Population (May 2026): 10.253 Million

Economy

GDP per capita (May 2026): $ 64,831 

Inflation (May 2026) (April Growth Rate): 1.9% 

Current Account Balance (Q1 2026): -0.06% of GDP

Trade in Goods and Services (May 2026): $15.785 billion

Finance

US Dollar Exchange rate (May 2026, Avg.): NIS 2.895

Euro Exchange rate (May 2026, Avg.): NIS 3.381

Long-term interest rates (May 2026): 3.5% Per Annum

Short-term interest rates (May 2026): 3.75% Per Annum

Government

Debt to GDP ratio (2025): 68.5%

Deficit to GDP (June 2025 - May 2026): 3.75% 

Motorization

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

Innovation and Technology

Gross Domestic Spending on R&D (2024): 6.76% of GDP

Environment

CO2 Emissions (2024): 5.61 Tonnes Per Capita

Jobs

Employment Rate (May 2026): 61.6% of the Working-Age Population

Official Unemployment Rate (May 2026): 2.8% of the Labour Force

New Cars and CV Registrations

 New Passenger Car Registration: January-May 2026

Passenger car registration: an increase of 1% compared with January-May 2025.

In May 2026, the Israeli passenger car market registered 29,456 new cars – an increase of 13.4% compared with May 2025. Since the beginning of the year, 143,983 new cars were registered – an increase of 1% compared with last year. Since January, 51,176 new cars with electric propulsion (BEV + PHEV) have been registered. The market share of pure EVs currently stands at 11.3% with 16,216 deliveries.

New Passenger Cars Registration According to Brands: January-May 2026

New CV above 3.5-ton Registration: January-May 2026

Commercial Vehicles above 3.5 tons registration: 7.9% increase compared with January-May 2025.

In May 2026, the Israeli market for CVs above 3.5 tons and buses registered an increase of 18.2% in deliveries, with 1,496 new registrations, compared with 1,266 units in May 2025. Since the beginning of the year, 7,003 CVs above 3.5 tons and buses were registered, an increase of 7.9% compared with last year.

New CV above 3.5-ton Registration According to Brands: January-May 2026

New Bus Registration According to Brands: Jan-May 2026

Israel's Auto and Auto-Tech industry

Autobrains and Uber to Launch Agentic AI Robotaxi Program in Munich, built on NVIDIA DRIVE Hyperion 

Uber (NYSE: UBER) and Autobrains announced at GTC Taipei a strategic collaboration to launch a robotaxi program in Munich, combining Uber’s ride-hailing platform, Autobrains’ agentic autonomous driving intelligence, and NVIDIA DRIVE robotaxi-ready level 4 Hyperion platform to support scalable autonomous mobility for commercial ride-hailing. Pending regulatory approval, Munich will serve as the first deployment city for the robotaxi program, establishing an OEM-agnostic model to scale autonomous ride-hailing across vehicle platforms and urban markets. As one of Europe’s leading automotive hubs, with dense city streets, high-speed road networks, and a thoughtful German regulatory framework, Munich provides the right launch environment for commercially scalable autonomous mobility.

The collaboration combines three essential layers for scalable robotaxi deployment:      Autobrains’ Agentic AI autonomous driving technology, the NVIDIA DRIVE Hyperion platform, and Uber’s global mobility network and operational experience. Together, they establish an OEM-agnostic model to move autonomous ride-hailing from isolated deployments to repeatable, scalable fleet infrastructure. Autobrains’ Agentic AI represents a new path to autonomy. Rather than relying on a single, monolithic end-to-end model to handle the full driving task, Autobrains decomposes driving into specialized agents, each focused on a specific driving context or decision dimension. These agents continuously evaluate context, reason across multiple possible actions, and select responses in real time. This enables more robust behavior in complex, unpredictable environments, while maintaining the efficiency needed to deploy across fleets and OEM platforms.

The program is designed to integrate across vehicle platforms and operate within Uber’s ride-hailing ecosystem. For automakers, it creates a practical path to participate in autonomous ride-hailing by combining vehicle platforms with autonomous technology, marketplace access, and fleet operations.

Innoviz Technologies and LOXO Sign Letter of Intent to Power Next-Generation Autonomous Delivery Vehicles with InnovizTwo Long-Range LiDAR

Innoviz Technologies (NASDAQ: INVZ), a leading supplier of high-performance, automotive-grade LiDAR sensor platforms, announced that Switzerland-based LOXO, a pioneer in autonomous delivery, has signed a letter of intent (LOI) to integrate Innoviz's InnovizTwo Long-Range LiDAR into its L4 autonomous driving solution, Digital Driver. InnovizTwo serves as a core layer enabling Physical AI systems that must perceive, reason, and act in the real world under the laws of physics, supporting high-fidelity 3D understanding required for autonomous operation.

Innoviz and LOXO are currently engaged in advanced stages of testing and evaluation of InnovizTwo Long-Range LiDAR for LOXO's dedicated autonomous vehicle platform. Subject to the successful completion of this process, LOXO intends to nominate Innoviz as its LiDAR supplier for this platform.

LOXO's Digital Driver technology stack powers autonomous delivery with purpose-built and retrofitted electric vehicles designed to meet the growing demands of urban and regional logistics across Europe, in applications such as transport, retail, and postal delivery. As LOXO prepares to begin development of its next generation of driverless vehicles, the company evaluated different LiDAR providers, concluding that Innoviz's InnovizTwo Long-Range LiDAR has the potential to be the best fit for its platform, including meeting the required performance, reliability, and supply continuity. These capabilities align with the rising requirements of Physical AI systems, where reliable, real-time 3D perception forms the foundation for safe autonomous decision-making at scale.

Foresight Moves to Serial Production with $10.5 Million Potential Revenue Pipeline in Japan for ADAS Systems

Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX), an innovator in 3D perception systems, announced the signing of a Final Development and Commercialization Agreement with a Japanese in-vehicle AI device manufacturer and Cornes Technologies Limited for the integration and deployment of Foresight’s proprietary ScaleCam stereoscopic 3D perception software into the Manufacturer’s flagship in-vehicle AI systems. The Agreement, which includes a design freeze and transfer to production phase, paving the way to serial production in early 2027, is expected to generate a potential revenue, based on a software licensing model, of up to approximately $10.5 million for Foresight between 2027 and 2030. This opportunity is driven by the Manufacturer’s forecasted demand of approximately 400,000 units under the agreed volume-based recurring licensing model. Under the Agreement, Foresight will supply its ScaleCam package - delivering high-resolution depth maps, dense point clouds, and industry-leading all-obstacle detection with near-zero false alerts - optimized for the Manufacturer’s designated hardware and customized stereo cameras.

The Manufacturer’s system is a retrofit in-vehicle AI solution offering ADAS, navigation, conversational AI, entertainment, and emergency response capabilities. It targets mainly fleets and consumers’ markets in Japan, evolving through deep learning based on real-world driving data. In parallel to addressing fleets and consumer markets, the parties are also targeting to integrate the joint solution with leading OEM’s, initially in Japan and then to global vehicle OEM’s and Tier 1s. This Go-to-Market Strategy is expected to yield additional significant sales and revenue at a high production volume run rate.

Mobileye Named Frost & Sullivan 2026 Company of the Year in Global Passenger Vehicle ADAS Industry

Mobileye (Nasdaq: MBLY) has been named the 2026 Frost & Sullivan Global Company of the Year in the Passenger Vehicle ADAS Industry for the Excellence in Best Practices category. The recognition highlights Mobileye’s position in AI-powered ADAS solutions that successfully address the evolving safety and scalability needs of global automakers.

Frost & Sullivan’s analysis found that Mobileye stands out in ADAS as the leading provider delivering across four critical requirements – scalable architecture, cost discipline, safety credibility, and real-world validation – across a shared technology backbone that spans base ADAS to full autonomy solutions. The report highlighted Mobileye’s ability to convert customer needs into practical execution through flexible collaborations that allow automakers to adopt its technology as a chip supplier, broad-stack collaborator, or anywhere in between based on their specific requirements.

Mobileye’s technology foundation centers on its modular EyeQ6 system-on-chip portfolio, where EyeQ6 High and EyeQ6 Lite enable high-performance perception and sensor fusion across multiple ADAS levels. Mobileye’s Road Experience Management (REM) technology, which crowdsources data from over 8 million vehicles worldwide, continuously refines high-definition maps, creating one of the industry’s most comprehensive real-world validation and scalability platforms. Mobileye’s advancements in AI and chip design are driving innovation across its portfolio, including its proprietary Surround ADAS and driver monitoring system, providing automakers with cost-effective ADAS capabilities, a practical path to advanced automation, and support for architecture consolidation goals.

Israel Infrastructure Fund (IIF) finalizes a major deal with Electra, acquiring a 51% stake in its transport and automotive divisions

The Israel Infrastructure Fund (IIF) has officially completed the first stage of its acquisition of a 51% controlling stake in two prominent subsidiaries of Electra Group: Electra Afikim and Electra Motors. This strategic transaction is based on a combined company valuation of ILS 750 million.

The deal is structured to be executed in progressive stages. It marks a significant expansion of the initial partnership outline reported back in September 2025, which originally forecasted IIF acquiring a one-third stake. With the finalization of this first phase on May 31, 2026, IIF cements its position as the majority shareholder, driving forward its long-term investment strategy in national infrastructure and mobility.

This joint venture brings together two core areas of Electra’s transportation ecosystem: Electra Afikim, A leading operator in Israel's public transportation sector, managing extensive bus routes and mass transit services, and Electra Motors, the automotive arm specializing in the import, distribution, and marketing of vehicles, with a strong focus on electric mobility.

For Electra Group, the capital influx and partnership with a premier infrastructure fund like IIF will accelerate the modernization of its fleet and expand its market footprint. For IIF, the acquisition secures a robust foothold in Israel's rapidly evolving public transit and clean energy automotive markets. The collaboration is expected to enhance public transportation infrastructure, optimize fleet operations, and streamline vehicle import channels nationwide.