Autonomous vehicles are revolutionizing driving. Future drivers will be machines, and vehicles will become smart platforms based on sensors, computers and communication technologies. The automotive industry is transforming to a high-tech industry, and a range of markets and human activities are expected to change. This revolution creates a great opportunity for Israeli technology companies

In 1903 the Ford Corporation began marketing their famous Model T. This car signaled the beginning of the mass manufacturing of motor vehicles for private use and fundamentally changed the economy and human culture. Since then, many technological developments have enhanced the safety, speed and comfort aspects of the traveling experience and the vehicles themselves have become more reliable and easier to operate. Nevertheless, no significant disruption has occurred in the field of transportation since the beginning of the twentieth century.  Now, for the first time in approximately one hundred years, we are witnessing two significant changes.
The first change is the replacement of the internal combustion engine, the workhorse that has powered cars since the early twentieth century, with an electric engine. Advanced technology already enables us today to overcome the main limitation of electric vehicles – the limited duration of the journey until the battery is recharged. As an illustration, the Tesla Corporation's "Model 3" that was recently released on the market, displays a travel range of 350 kilometers between battery charging and other models even reach a range of approximately 500 kilometers. In light of this, a continuous increase in the production and purchase of electric vehicles is to be expected over coming years.

The second change, that of the autonomous vehicle revolution, is expected to propel the world towards the dawn of a new transportation age. This revolution includes different stages and many technological challenges but the final destination is clear: the transfer of driving from human to machine. Already today, the motor vehicles on the road combine sensors for driver tracking and control, and many electronic systems. In the near future, an autonomous vehicle will itself perform all the actions necessary for driving, and will coordinate them with other vehicles, infrastructure, pedestrians and other transportation factors. The vehicle is becoming a smart system brimming with sensors, cameras computerized devices and communications systems.
This revolution is expected to have far-reaching ramifications in a range of fields:
in the field of transportation and the global culture of mobility; in overlapping spheres such as insurance, maintenance, refueling and traffic policing; in transportation-based fields such as freight transport and delivery, and even in seemingly remote fields such as hotels, restaurants, retail and real estate.[1] The transition from a model of vehicle ownership to that of transport subscription and a personally tailored service including many information technologies and connectivity, will completely change the range of human actions, and create both economic and social opportunities and challenges that cannot yet be foreseen.

 

The Objective: An Autonomous Vehicle to take the Road Within Five Years

Motor vehicles possessing partial autonomous capabilities are already being sold today and travelling the roads. Vehicles with much more highly developed autonomous capabilities are currently conducting road trials but still require driver supervision and can contend with only limited challenges. The forecasts of most of the car manufacturers set the early 2020's as the target for entering the market with cars that will drive autonomously in 90-95 percent of the scenarios.

Naturally, in order to enable the mass marketing of autonomous vehicles, an appropriate regulatory environment must be developed. Today there are several countries that have created supportive regulation for the experimental stages, most noticeably California. However, there is still no legal framework for the commercial operation of autonomous vehicles. The legislators (including those in Israel) will need to plot guidelines relating to aspects of safety, manufacturing standards, licensing, insurance, traffic laws and others.

From the technological aspect too, the effort required to develop a motor vehicle that will drive autonomously in almost all scenarios is significantly larger than the total resources invested thus far. Concentrated effort is being invested today in the development of sensors and more varied and better identification capabilities, however significant technological gaps in the field of artificial intelligence loom in the background.

The Sensory Challenge: Fusion of Sensor Data
An autonomous vehicle requires "eyes", in other words sensors, that will enable it to identify and decipher its environment. They will simulate peripheral vision from all necessary directions and ranges and will allow a rapid identification of objects in the area – obstacles, other vehicles, road markings and traffic signs – in all weather and light conditions and every road situation.

Sensory systems, called ADAS, are already available today and include a single sensor – one video camera at the front of the vehicle. The data from the camera is analyzed by an algorithm-based processing unit that warns of different dangers and obstacles. In the near future, each sensor will be based on a different technology and will be specially adapted for different purposes and conditions. Camera, laser (LiDAR) and radar sensors will operate alongside sensors that will use 3D imaging for improved identification of risks, a more accurate modelling of objects in the area, and an estimation of the distance between them. In addition, different types of sensors will enable night vision. In order to prevent errors that may occur as the result of road conditions or a system failure, data required for the journey will be received via a number of technologies simultaneously.

The vast data that will be produced by the various sensors will necessitate advanced solutions for the fusion of information from different sources, and algorithms for visual and data processing. All these are required to operate at an extremely high reaction speed. In addition, challenges exist in reducing the high costs involved and in increasing the operational range of a complete sensory system, especially in laser-based devices (LiDAR).

The Navigational Challenge: High-Precision Location Identification
The navigation system in an autonomous vehicle is based on identification of the vehicle's location – both absolute location and relative to surrounding objects – within an accuracy of centimeters. It is required to operate continuously, even in a complex urban environment, including in tunnels, shopping malls and parking lots. Therefore, an additional group of sensors and devices planned for integration in autonomous vehicles is intended to enable its independent navigation. These sensors include GNSS sensors (Global Navigation Satellite System) that receive satellites' navigation signals; Optic sensors that identify more accurate location and changes along the route, Vehicle cameras and radar systems that can compare their data to absolute coordinates; And speed and acceleration sensors.
No GNSS system exists today that enables satisfactory location accuracy in a motor vehicle dynamic, and this field therefore possesses potential for pioneering innovation. Several Israeli companies are currently operating, together with the Innovation Authority, to achieve accuracy of approximately 10-20 centimeters, with the ultimate aspiration of reducing this to only a few centimeters.

The many channels in a connected car create a communication challenge
Until recently, most of development efforts in the field of autonomous vehicles focused on the autonomous control system while wireless connectivity was not considered vital. However, experiments conducted proved the need for developing an infrastructure that will enable the vehicle to communicate with its surroundings – an approach known as V2X (Vehicle to Everything). This approach encompasses communication between the vehicles themselves, between the vehicle and the pedestrians, and between the vehicle and infrastructures. The communication between the vehicle and its surrounding infrastructure (V2I) seeks to provide a solution for complex driving situations, such as impaired vision that affects the sensing abilities of the car's cameras, or lack of communication with the navigation satellites. Inter-vehicle communication (V2V) enables the transfer of information regarding speed, direction and the route of other vehicles. Communication between vehicles and pedestrians (V2P) can, for example, warn pedestrians of approaching vehicles and assist them safely cross the road.
The central technological challenge today in the V2X field is the extremely low-latency transmission of large scopes of data between millions of vehicles and surrounding objects. The realm of wireless communication for autonomous motor vehicles is developing in several parallel directions. Firstly, efforts are being made to develop V2X applications that meet the DSRC standard[2] and the 802.11p Wi-Fi standard that operate on the same frequency range, and specifically communications applications for interaction with traffic signs. These efforts have encountered difficulties, both because of the lack of uniformity in allocating these frequencies in different places around the world, and also due to the lack of enough traffic signs adapted for V2I communication.

Parallel efforts are based on cellular communication. The Qualcomm Corporation for example, recently declared that it is harnessing 4G technology in order to develop better V2X technology. The breadth of the cellular network's band will enable to communicate with a larger number of vehicles and to receive swift and precise alerts about happenings such as sudden braking. 5G communication networks that will be set up in the future will support faster and larger than ever scopes of communications.

The Cyber Security Challenge
The continued increase in the autonomous vehicle's information and connectivity equipment also leads to a rise in their vulnerability to cyber-attacks. The risks include information theft, implantation of ransom software, vehicle hijacking, vehicle surveillance, injection of false information to disrupt operation, the deliberate creation of large-scale accidents and others. Past demonstrations have proven the possibility of penetrations to a vehicle via its communications system by implanting malicious software in the vehicle's control and diagnostics devices and by misleading the sensors.

The potential damage from a cyber-attack is especially large when it involves damage to a system at the foundation of many vehicles' operation such as navigations systems: the GNSS system and the GPS signal are extremely sensitive to jamming and spoofing. Significant effort is therefore currently being invested in anti-jamming technologies, both in the antenna, the system as a whole and in the algorithms. In general, contending with cyber risks in the field of autonomous vehicles is based on adapting accepted technologies in the cyber world, such as the separation of networks critical to safety from non-critical networks, identification, treatment and prevention of penetration into the system, data encryption, cross-checking of information to establish verification, and the assembly of communication with the outside world under a single channel.

 

The Innovation Authority – In Practice: Support for General Motors R&D Center in Israel

In 2008, the international motor vehicle manufacturer, General Motors, established an R&D center in Israel. The center was opened with the support of the Innovation Authority's program encouraging the establishment of multinational project centers in Israel. Today, the center is home to almost 200 researchers and engineers engaged in the technological challenges at the heart of the race to develop an autonomous vehicle. These challenges include: advanced sensing technology, connectivity, vehicle cyber protection, user interface (for the driver and passenger), acoustics, voice identification, algorithms and artificial intelligence for autonomous vehicles, models for collaborative driving and others.

The R&D center also serves as a knowledge for the developing startup industry in the field of autonomous vehicles and smart transportation in Israel. The center scouts for startup companies and works with them in different avenues: mentoring, help in familiarization with the market, research and commercial collaborations, and investments from General Motors' corporate venture capital fund. In addition, over the years, the R&D center has developed a base of suppliers from the Israeli manufacturing industry that have become, under the guidance of experts, licensed suppliers to General Motors and other companies in the field. Today, the corporation acquires an average of approximately USD 100 million per year from Israeli companies.       

 

Future Mobility Services: The Sky is the Limit

The nature of pioneering innovation makes predictions of future impact difficult. One illustration of this is that most of the internet's dramatic multi-faceted influence on our lives could not have been foreseen in the mid 1990's when the network was opened up for mass use. Similarly, the autonomous vehicle revolution is expected to influence such a wide range of areas that any attempt to forecast the full extent of its consequences may be revealed as absurd. Nonetheless, several developments can be predicted with a relatively high degree of certainty, even if their intensity and timing are unclear. Some will directly influence consumers, in other words existing and potential users of motor vehicles, while others will influence them indirectly via a change in the infrastructures and mechanisms that lie at the foundation of the transportation and mobility world today.

Primarily, autonomous cars are expected to be safer. Studies indicate that approximately 90 percent of accidents are caused by human error. Naturally, autonomous cars will also sometimes "make mistakes" and cause accidents, however computerized learning processes will bring about a reduction in these errors, rendering them negligible. Secondly, travel time is expected to be dramatically shortened. The autonomous vehicles' swift reaction capabilities and the communication between them will enable the shortening of safety intervals and quicker travel. In addition, as soon as all vehicles are connected to the same communication data network, it will be possible to optimize the travel routes in a manner that will significantly reduce traffic congestion. All these may lead to a streamlining and increase of up to 5 times the mileage traveled on the same road infrastructure.[3]

Naturally, the travel experience will be significantly enhanced once the vehicle becomes autonomous, thereby allowing the passengers to transfer their attention to work or leisure. The passenger's spare time will be utilized via entertainment systems and passenger information and communications systems. The future 'Infotainment' systems will be based on connectivity and will provide integrated services such as media players, augmented reality, and adaptation of the entertainment experience from aspects of acoustics, lighting and others. Car manufacturers and large technology companies are already working on these systems today.

Travel costs will also decrease dramatically, mainly as the result of the transition from the vehicle as a consumer product to 'mobility as a service' that will be provided via pools of autonomous vehicles that will compete which other in indices of efficiency and quality. Estimates are that the travel cost per kilometer will be reduced by 80 percent as the result of this transition. This saving reflects the inefficiency embodied in today's limited utilization of private vehicles, that for most of the day are parked in a static state without serving their owner. This contrasts with autonomous vehicles that will operate at almost full utilization while serving multiple users. A further parameter in which a significant change is expected is that of accessibility. People with disabilities, the elderly, children and other sectors of the population who have difficulty with independent mobility will be able to benefit from readily available, safe and affordable mobility. It is also reasonable to assume that this development will have additional ramifications on our daily lives. For example, the need for parents to drive their children to and from their educational institutions will become unnecessary, the children being able to safely and independently use the autonomous car themselves.

Influence will not be limited to driving however. Many mechanisms supporting motor vehicles today will be dramatically influenced by the transition to autonomous vehicles. Cities, for example, are presently planned to provide parking for a tremendous number of motor vehicles. In some cities, the accumulated parking areas even constitutes a quarter of the total city area. We can only speculate about the ramification of utilizing these areas for other purposes after we cease owning private cars and when the cars that provide service will be able to park densely and efficiently in designated areas far from the city centers.  

In addition, the operative mechanisms of transportation law enforcement bodies and the insurance companies will also change. The insurance companies will change the insurance model such that payment will be based on usage and on manufacture characteristics such as vehicle quality grade, the algorithms upon which it is based, its safety systems and the average number of faults. Investigation of an accident between autonomous vehicles will be based on data gathered and transmitted from the vehicle to the control centers and insurance companies, and computerized automatic claims procedures will be developed between the insurance companies. Lessons learned from accidents will need to be implemented by the autonomous vehicle manufacturers for the future prevention of accidents. The regulation in this field is only in the initial stages of development, and binding principles will evolve over time in order to ensure service and safety quality.

The dramatic developments mentioned above also include aspects of concern. More than 100,000 people in Israel work as drivers, whether in public transport or in truck pools and in the delivery business.[4] What will happen to these people when vehicles become autonomous? Of relevance is the question as to whether the market will catch up with the pace of disappearance of these professions and create new ones.
These are all conceivable developments, however, the horizon of technological and socio-economic changes that the autonomous vehicle revolution creates is substantially wider than we can currently estimate.

 

Autonomous Vehicles are a Big Opportunity for the Israeli High-Tech Industry

The dramatic changes in the global motor vehicle industry and in the world of mobility offer many opportunities for new players from additional fields to join the transportation industry and shape the revolution. Large technology companies such as Intel, Google and Apple have been working for some time on developing a prototype of autonomous vehicles, alongside car manufacturers such as Toyota, General Motors and Tesla and, on occasion, in cooperation with them. In 2016, 1.1 billion USD were invested in 'Auto tech' startup companies and in 2017, investment is expected to total three times that sum.[5]
Moreover, large-scale technological revolutions frequently create entirely new markets that are characterized by extremely rapid growth. New and innovative companies at the forefront of the revolution are therefore presented with a golden opportunity to rapidly become very large and profitable. This phenomenon was demonstrated well by the internet giants during the previous decade. In addition, the changes in the structure of the markets that are expected to be influenced by the autonomous vehicle revolution, coupled with the economic and social changes it embodies, will create many opportunities for the growth of completely new business models, generating high economic value for their developers.

The technological challenges together with the economic and social changes detailed above, create a great opportunity for Israeli industry to take part in the technology race and to capture key positions in completely new markets. Already today, approximately 450 companies in Israel are engaged in smart transportation fields such as travel sharing, communication, sensors and control systems. The acquisition of Mobileye by Intel this past March for 15.3 billion USD, one of the largest transactions in the field of Auto Tech in 2017, has focused the attention of global corporations and investors on the tremendous potential of combining Israeli technological excellence with the autonomous vehicle revolution.

In order to accelerate the development of Israeli industry in the field of autonomous vehicles and smart transportation, there is profound importance in developing local infrastructure to serve Israeli companies in the development and commercialization of technologies and enable them to implement innovative business models. Also needed are the organization of a regulatory and physical trial infrastructure that will meet the relevant needs, and the opening of local transportation systems to innovation so that Israel may serve as a primary market for local initiatives in their global growth programs. This year, the government in Israel launched a national program for the advancement of smart transportation with the objective of encouraging the integration of advanced Auto Tech technologies into Israeli transportation systems, thereby accelerating the development of Israeli technology industry in this field. Among others, this will be achieved through the establishment of a designated trials center and adaptation of the regulatory environment. The Innovation Authority is playing an active role within the framework of this program (see below).

The Government is acting to develop Israeli industry in the field of autonomous vehicles and smart transportation

In January 2017, the government authorized a 5-year program to promote smart transportation in Israel. The program was allocated a designated budget of approximately 240 million NIS, and was led by an inter-departmental team headed by the General Director of the Prime Minister's Office and the Director General of the Ministry of Transport. The Innovation Authority, together with the Fuel Choices and Smart Mobility Initiative in the Prime Minister's Office and other bodies, will take an active part in implementing this program. 

The program will encourage the integration of advanced technologies in Israeli transportation systems and the development of Israeli industry in a range of avenues: creating vital infrastructures for development and trials, promoting collaborations between academia and industry, revising regulation to enable the assimilation of innovative transportation technologies and new models of mobility, promoting a supportive business environment in the entrepreneurial community and others. Specifically, as part of the program, a center for trials of smart transportation and autonomous vehicles will be established and field tests will be promoted along with pioneering 'auto tech' initiatives. The entrepreneur community 'Ecomotion' is another framework for State activity in developing the smart transportation technological industry. 'Ecomotion' was founded in 2012 following a joint initiative of the Fuel Choices Initiative, the Ministry of Economy and Industry, the Israel Innovation Institute, and Israeli industry, with the objective of supporting the smart transportation sector and positioning Israel as the center of global innovation in the field. The community conducts workshops and various events that bring together young and experienced entrepreneurs, market leaders, international and local industrial companies, technology professionals, policy makers, academic scholars and investors.

 

We wish to thank the smart transportation and autonomous vehicles Knowledge Center in the Innovation Authority for their contribution to this chapter.    

 

[1] CB Insights (July 31, 2017). 24 Industries Other Than Auto That Driverless Cars Could Turn Upside Down.

[2] Dedicated Short-Range Communication – a standard that was hitherto used for communication in collecting payments on toll roads. 

[3] KPMG (2012). Self-driving cars – the next revolution

[4] National Bureau of Statistics Data 2016, Employees according to selected occupation groups

[5] CB Insights (May 2017). The State of Auto Tech