Israelis are on course to buy a record number of vehicles in 2021, despite some of the worst levels of traffic in the world, according to a new report.
The growth in the automotive industry in Israel had plateaued in recent years, Channel 12 reported, citing statistics from the Dun & Bradstreet business group.
The population’s concentration in the center of the country, the stagnant public transportation system and the slow pace of road construction have caused traffic in Israel to be 3.5 times worse than the OECD average, even though the rate of car ownership is relatively low compared to other developed countries.
Amid the pandemic economic recovery, demand increased for all sectors of the industry, including imports, car leasing companies and the used car market.
In the first 11 months of the year, 283,000 new cars were imported, and the expected deliveries of 300,000 vehicles in total in 2021 will be a record.
The electric vehicle market is also developing in Israel. In 2021, around 10,000 fully electric vehicles have been delivered to Israeli consumers, around 60 percent of which are Teslas.
The market share of new electric vehicles is only around 3%, but it is growing rapidly. In 2020, there were 1,500 electric vehicle imports, or 0.7% of the market.
In Germany, the electric vehicle market share is around 11%, and in Norway, the world leader, it is 60%.
In Israel, the market is stifled by high costs and lack of infrastructure, including charging stations.
Leasing vehicles and short-term rentals have also come under high demand, likely by consumers who are waiting to buy their own vehicles, as supply chain problems and chip shortages slow production, Channel 12 reported.
There are around 3.75 million vehicles on the roads, and 86% are privately owned.
For every kilometer of paved road, there are 2,730 vehicles, the highest rate in the OECD. The next highest is is Spain, with 1,354 vehicles per kilometer of paved road.
Traffic has spiked during the pandemic. According to data from the Waze navigation app, Israeli “road travel” has increased by an average of 23% compared to pre-pandemic levels.
In some cities, it’s far worse. Use of the roads has increased by 45% in Beersheba, 38% in Jerusalem, and 29% in Haifa, per the Waze data. Transportation Minister Merav Michaeli has declared a national “traffic crisis.”
Reasons include people driving by themselves, or with few other passengers, and many people making non-work related commutes during the day, including for leisure or social purposes.
Israel’s motorization rate has increased in recent years, as public transportation systems are lagging and public services largely stop during Shabbat.