Electric Car Sales in Israel Expected to Double to 19,000 in Next Year

Electric Car Sales in Israel Expected to Double to 19,000 in Next Year

The country’s infrastructure is inadequate for it to be a global leader in sector

The global accounting and consulting firm BDO projects electric car sales in Israel to double this year to 19,000. Israel, the firm says, could be a global leader in electric cars but its growth is impeded by poor infrastructure. With a construction boom throughout Israel, some fear antiquated planning for current new builds in other sectors will bring further infrastructure woes in the future.

Chen Herzog, chief economist and partner at BDO, says that Israel could be a world leader in the electric vehicle sector but infrastructure, particularly the electric grid, is holding back progress. In fact, Israel is not to prepared to handle the 215,000 electric vehicles forecast to be in use within the next four years.

“Israel is at an advantage to lead the electric car revolution because it’s a small country, so the distance limitation of electric cars is less of an obstacle,” he told The Media Line. Herzog also noted the country’s “relatively high gasoline prices and relatively low electricity prices.”

Herzog says that in order to accommodate the “revolution” in electric vehicles, Israel’s government has to increase infrastructure and provide economic incentives.

Israel’s electric sector is still being built based on long-term plans that do not take into consideration the requirements of electric vehicles, he added.

Herzog says there needs to be more rapid electric vehicle charging stations and the elimination of obstacles to electric grid connections.

Some of Israel’s electric grid cannot supply the amount of power needed for the increase in electric vehicles, according to Herzog, and “there are bottlenecks that the government or the electricity sector needs to prioritize in order not to delay the connection of these chargers.”

When it comes to financial incentives to encourage the purchase of electric vehicles, Herzog says the government needs to extend the incentives that are currently in place and are set to expire within the next three years.

“The fear is that without certainty, without long-term prospects, the short-term incentives are not enough for market players who need long-term planning and long-term commitments,” Herzog said.

Israel is at an advantage to lead the electric car revolution because it’s a small country, so the distance limitation of electric cars is less of an obstacle

While Israel’s electric vehicle market accounts for 5.5% of all vehicles sold, it lags behind many countries in Europe where fossil fuel-free cars account for roughly 15% of new cars. Herzog says that, globally, nations that hit the 5% threshold with electric vehicles tend to see a dramatic increase in sales, noting that in the last two years global sales of electric vehicles went from 5% to 25%, and sales of electric vehicles in Sweden alone rose from 5% to 32% in 36 months.

Israel’s Ministry of Energy did not respond to a request for comment.

Herzog says that local governments play a role in improving infrastructure for electric vehicles.

“They should encourage charging stations in neighborhoods and parking lots within the city, and the municipality has to be responsible for the air pollution within their cities,” he said. “Public buses and school buses need to be electrified and the municipality needs to be responsible for the municipal fleet.”

When asked about the area’s plans for electric vehicles, the Jerusalem Municipality told The Media Line in a written statement that it, along with Eden, the municipality’s economic development company, had selected Sonol EVI to build 100 charging stations throughout the city.

Sonol could place more stations in the future, based on demand, which is expected to grow in the coming years. Making more stations available will encourage city residents to use electric vehicles and reduce air pollution in the city, the statement said.

“Unlike models in other cities, the unique contracting route formulated by the municipality with the company will allow the municipality to own the charging stations and thus allow long-term planning flexibility. The municipality will be able to offer competitive charging prices for city residents at any given time,” according to the statement.

As Israel enjoys a construction boom, concerns over old plans extend to other aspects of infrastructure, such as the demolition of smaller apartment buildings to build newer, bigger ones. Approval for current new construction is a process that takes years.

Dr. Emily Silverman of the geography department at the Hebrew University of Jerusalem, which hosts Israel’s largest graduate program in urban planning, says that there is a major infrastructure problem in some urban centers when turning three-story and four-story apartment buildings to apartment buildings with many more floors. In many cases, the buildings are torn down and replaced one at a time, without taking the rest of the neighborhood into account. This means that issues like inadequate sewage systems, and the need for new schools and parks are not always considered. Those urban areas that do take such infrastructure concerns into account also face a multi-tiered bureaucracy when trying to get the necessary updated improvements in time.

“Funding for schools and parks and sewers each need to come from different ministries so, if you’re trying to build a neighborhood by the time people move, there is no single source controlling the budget,” she told The Media Line. “People might be moving in when the roads are still being built, for example.”

Urban planning policy within Jerusalem specifically brings its own sets of unique challenges.

“It is built very heavily on issues of geopolitics and on an attempt to maintain a demographic balance that is often at odds with urban planning,” Silverman said. “It leads to new housing being constructed in spread-out locations in order to have housing for Jewish neighborhoods and no new housing for Arabs.”

Another major infrastructure problem in Israel involves vehicles in general.

Silverman says that “public transport design that allows for cars to get in and out during peak times” is among the biggest infrastructure concerns in Israel.

Parking also poses an additional headache for the Israeli public. By law, each new building must include plans for a certain number of parking spaces, but sometimes the auxiliary space is not sufficient. In some cases, the dearth of parking approved is done intentionally.

“In Tel Aviv, the number of additional parking spots for new builds are not sufficient, but this is done on purpose to encourage public transportation,” a lawyer specializing in construction, who asked not to be named, told The Media Line.

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