Monthly Review August 2023
September 26, 2023
Preface – Economic Climate
The Israeli economy is an advanced economy that participates in the OECD organization. Israel’s GDP per capita is $55,2306. The growth rate in Q.2 of 2023 was 3%.
In Israel, per the guidelines set by the World Health Organization (WHO), COVID-19 is no longer a public health emergency but its impact on the economy. Despite these challenges, Israel has managed to maintain a minimal deficit, amounting to only 1.3% of the GDP, from September 2022 to August 2023. This demonstrates the resilience and effective economic management in navigating the difficulties posed by the pandemic.
The debt-to-GDP ratio decreased to 60.9% in 2022, and the unemployment rate in August 2023 was 3.1%.
The new government brings potential stability with a State Budget approved for 2023-24. However, judicial reform and including religious parties could introduce market instability and fiscal expansion, potentially impacting the primary deficit. Despite the challenges faced, the Prime Minister depicted the present scenario in Israel as a true testament to its "Vibrant Democracy".
Along with economic stabilization and rapid growth, there has been an increase in the inflation rate. As of August 2023, the annual inflation growth rate is 4.1%. In August 2023, the short-term interest rate was raised to 4.7% due to the inflation increase, while the long-term interest rate stands at 3.9%.
Population (August 2023): 9.795 Million
GDP per capita (August 2023): $ 55,306 (NIS 206,900)
Inflation (August 2023) (Annual Growth Rate): 4.1%
Current Account Balance (March 2023): 4.4% of GDP
Trade in Goods and Services (August 2023): $13.311 billion ( NIS49.8 billion)
US Dollar Exchange rate (August 2023, Avg.): NIS 3.741
Euro Exchange rate (August 2023, Avg.): NIS 4.091
Long-term interest rates (August 2023): 3.9% Per Annum
Short-term interest rates (August 2023): 4.7% Per Annum
Debt to GDP ratio (2022): 60.9%
Deficit to GDP (September 2022 - August 2023): 1.3%
Level of Motorization (2022): 411 Vehicles/1,000 Residence
Innovation and Technology
Gross Domestic Spending on R&D (2021): 5.57% of GDP
CO2 Emissions (2022): 8.38 Tonnes Per Capita (BDO Model Estimation)
CO2 Emissions (2021): 6.74 Tonnes Per Capita
Employment Rate (August 2023): 63.6% of the Working Age Population
Official Unemployment Rate (August 2023): 3.1% of the Labour Force
New Cars and CV Registrations
New Passenger Car Registration: Jan-August 2023
Passenger car registration: Increase of 20.6% compared with August 2022.
In August 2023, the Israeli passenger car market registered 24,727 new cars – an increase of 20.6% compared with August 2022. Since the beginning of the year, 222,487 new vehicles were registered, an increase of 10.6% compared with Jan-Aug 2023. Since January, 37,672 BEVs were registered and 12,770 PHEVs, a total of 50,442 cars with chargeable electric drive representing 22.7% of all registrations.
New Passenger Cars Registration According to Brands: Jan-August 2023
New CV above 3.5-ton Registration: Jan-August 2023
Commercial Vehicles above 3.5-ton registration: -15.4% compared with August 2022.
In August 2022, the Israeli market for CVs above 3.5 tons registered a decrease of 15.4% with 1,389 new registrations, compared with 1,642 units in August 2022. Since January, 11,036 units have been registered, a decrease of 6.1% compared with Jan-Aug 2022.
New CV above 3.5-ton Registration According to Brands: Jan-August 2023
New Bus Registration According to Brands: Jan-August 2023
Israel's Auto and Auto-Tech industry
REE Confirms FMVSS Certification Feasibility of X-by-Wire Systems
REE Automotive Ltd. (Nasdaq: REE), the provider of full by-wire electric trucks and platforms, announced a significant milestone in the REE’s plan to certify and bring to market a steer-by-wire, brake-by-wire, and drive-by-wire commercial truck. REE contracted HORIBA-MIRA, a world leader in testing, to perform internal tests, modeling specific Federal Motor Vehicle Safety Standards (FMVSS) certification requirements upon which REE has determined the feasibility of P7 to meet the needs of certification. REE plans to fully certify its P7-C and P7-S products by the end of 2023, including FMVSS, CARB, and EPA certification, aligning with scheduled vehicle deliveries to dealers and eligibility for government incentives. Based on initial tests with MIRA’s test engineers and drivers, they successfully executed REE’s feasibility test plan at MIRA’s advanced testing grounds in Coventry, UK.
Report: Israel-Japan Free Trade Agreement Nearing
Globes Daily newspaper reports that a free-trade agreement between Israel and Japan is underway. According to Globes, after ten years of mutual explorations, there has been significant progress in advancing the FTA between the two countries. A first draft may be presented already in 2024 and implemented in 2025. According to sources in the automotive sector, the motivation for this progress stems from, among other things, the agreement signed last year between Israel and South Korea and the soon-to-be-signed agreement with China. As of August 2023, 19.8% of the cars imported to Israel came from South Korea, 16.8% from China, and only 12.8% from Japan, compared to 30% and even more a decade ago. The Ministry of Economy and Industry responded to the publication and said: "Israel and Japan are holding these days a feasibility study as a preliminary step before starting negotiations for a free trade area agreement".
Innoviz Technologies to Develop B-Samples of New LiDAR Platform for Next Generation of BMW Automated Vehicles
Innoviz Technologies (NASDAQ: INVZ) and the BMW Group are expanding their collaboration by starting a B-sample development phase on a new generation of LiDAR. Under the new development agreement, following BMW requirements, Innoviz will develop these B-Samples based on its second-generation InnovizTwo LiDAR sensor.
After a couple of years working together on an existing program that will include the first deployment of LiDAR-enabled highly automated technology on the BMW 7 Series later this year, the BMW Group and Innoviz are beginning to focus on the next generation of the technology by starting this first B-sample phase. The result of this first phase will enable the BMW Group to decide on a serial development agreement with Innoviz that will focus on bringing a new array of advanced automated capabilities to a broader range of the BMW lineup.
In addition to the LiDAR solution for the 7 Series, the BMW Group and Innoviz have started this first phase to develop an expected first-ever LiDAR-based Minimal Risk Maneuver (MRM) system in the future. The MRM acts as a secondary safety driving decision platform that will leverage the advanced performance, reliability, and resiliency of the InnovizTwo LiDAR to manage real-time driving decisions.
IDF to Equip with Trucknet Smart Catalyst
Trucknet reported to the Israeli stock exchange that the IDF intends to equip military trucks with Trucknet’s Smart Fuel Catalyst. The IDF informed Trucknet that following a trial in which the catalyst was installed in military trucks and showed 50% less greenhouse gas emissions and varying degrees of fuel savings; the IDF decided to install the catalyst in military trucks at an estimated cost of 400,000 Euros. In the future, the scope of the purchase may grow, but at this point, it is still subject to approval by the Ministry of Defense.
Volkswagen Commercial Vehicles Begins AV Testing with Mobileye Drive™️
Volkswagen Commercial Vehicles has begun testing a self-driving version of the ID-Buzz electric vehicle with Mobileye Drive technology on two continents. In Munich, Germany, and Austin, Texas, Volkswagen will validate the Mobileye Drive-equipped ID. Buzz vehicles with safety drivers on public roads, towards a goal of series production. Mobileye Drive incorporates advanced EyeQ™️ Systems-on-Chip (SoCs) and Mobileye’s sensing, mapping, and driving policy technologies to create a unique, full-stack autonomous driving system that can adapt to new locations.