Politically correct driving in Israel

Jerusalem Post, Daily; January 15, 2006

Israeli fashion designer Dorin Frankfurt used to be a proud owner of a four-wheel drive vehicle. She'd drive it all over the city and country, often traveling with her family, including two dogs.

But then she started wondering if she really needed a big car that emits copious amounts of carbon dioxide. "I felt it was politically incorrect to drive a car that guzzles gasoline and is not particularly friendly to the environment," she said in a telephone interview. "I absolutely refused to buy a new car until they brought out some sort of alternative."

One day last summer, Frankfurt read about hybrid cars and immediately made an appointment to test-drive the Toyota Prius, the only hybrid vehicle sold to private consumers in Israel at the time.

Hybrid cars - cars that run on both a petrol engine and an electric powered motor - are purchased in part because of the car buyer's idealism. That's why many environmentally-minded American celebrities were among the first to buy the green machines, and in doing so to act as unofficial commercials for the automotive invention.

Israel arguably lacks a celebrity culture to advertise the hybrid car market - and the salaries of few local entertainers justify such an indulgence.

Television host Avri Gilad, a vocal environmentalist, was among a few prominent personalities to test-drive the Prius as part of Toyota's PR efforts.

"I would love to get it as a present," said Gilad, who admitted that while the car was "very pleasant, economical, and eases my conscience," he is still wary of purchasing one. He also wasn't too crazy about the shape, which is like a curved hatchback.

"I'll need the cost of gas to increase more for me to consider buying electric," he said, noting that according to his calculations it would take about 15 years to recoup the extra cost of the vehicle based on current gasoline prices.

The Prius entered the Israeli vehicle market early last year - about a year behind most European countries, five years behind the US and eight years behind Japan. The finance ministry has dropped the customs rate for hybrid vehicles from 95 percent to 30% to keep the price under NIS 165,000, in an effort to make the cars more affordable to Israeli consumers.

This tax break meant that the total price of the Prius in Israel was reduced last December from NIS 179,132 to its current price of NIS 164,250 - less than the cost of a Toyota Camry or Rava. Toyota now expects its sales to increase, with a forecast of 500-600 purchases in 2006. The Honda Civic IMA will be a little cheaper, falling at around NIS 155,000 vs. NIS 145,000 for the standard Civic.

In addition, the company car tax that employees have to pay on the value of their company cars has also been reduced for hybrid cars.

"We want to encourage the sale of green vehicles," explained Boaz Sofer, Deputy Director General of the Israel Tax Authority. "Hybrid cars are the apparently practical way to reduce the negative influence of cars on the environment. It's not optimal, but this is what we have. I hope this will encourage manufactures and importers to bring in green vehicles."

This is one in a series of initiatives instituted by the finance ministry to reduce pollution and improve road safety, noted Sofer. Another reform, effective since December 2005, will gradually reduce customs on vehicles with increased safety features such as more than four air bags and a vehicle stability control system.
Other countries have also developed incentives for hybrid car owners.

American buyers, for example, can receive full-dollar tax credits and, in some states, owners of hybrid vehicles are allowed to drive solo in carpool lanes. Hybrid drivers are exempt from the 'congestion charge' on vehicles entering central London.
Yet few Israelis are aware that hybrid cars exist.

"We want to [market] the car to company managers who will set an example as people who save energy and care for the environment," said Dror Goralnik, National Sales Manager of Toyota, Israel. "It's really new technology, so you have to be open-minded to accept its advantages." He estimates that it will take another three years until hybrid cars become mainstream.

"It isn't a car that's sold like bread," said Honda's spokeswoman, Amit Sendik. "It's really for people who are interested in energy-saving and reducing pollution." The slowness of hybrid vehicles in penetrating the Israeli market has as much to do with supply as it does with cost or consumer wariness.

Toyota, for example, has manufactured to date about 500,000 cars throughout the world, with quotas for each manufacturing country. In Israel and other countries there are often waiting lists because there aren't enough cars to go around - even to the relatively few eager buyers. Prius- owner Frankfurt faced a waiting list, but persisted.

"I think we should think of Israel and do our utmost to preserve it," she said. "We are responsible to the place that is our future and our past," she added noting that she does all her clothing manufacturing in Tel Aviv.

She doesn't miss her 4X4, and says that there's enough room for her kids and dogs on road trips, but it took her a while to get used to a small, automatic car that she considers much easier to drive.

The dashboard is equipped with a touch-tone screen that displays information on energy flow and fuel consumption, and also controls the car's temperature and radio. The electric motor is much quieter than the petrol engine, which can account for a smoother drive.

In Israel, a country not blessed with vast oil reserves like many of her Arab neighbors, it would seem that the sale of hybrid cars would have political connotations aside from environmental issues - they can reduce the world's dependence on Arab oil.

When asked if weakening Arab countries would be an effective marketing tool for the Prius in Israel, Goralnik couldn't comment. After all, the hybrid car is politically correct.

(BOX) Emission efficient
The hybrid vehicle is powered by both an electric motor and a traditional gasoline engine. Depending on the car's speed and battery level, a computer calculates precisely which source of energy to activate to accelerate the car to the desired speed while saving the most energy.

The combustion engine serves a dual purpose: First to power the car when the electric power is insufficient and second to charge the battery that runs the electric motor. The electric motor is activated mostly during city driving, and the combustion engine usually takes over completely when the car reaches about 70 kph. The combustion engine shuts off when the car is idle, such as in traffic jams. In addition, kinetic energy from the brakes is transformed into usable energy so little energy is wasted.

The Japanese are the leaders of hybrid technology, which was developed by Honda and Toyota. Toyota claims to have already sold around 160 models in Israel. Honda will have a batch of the Honda Civic IMA (integrated motor assist) vehicles for sale in March this year.

Other car manufacturers like GM, Ford and Nissan have licensed the hybrid technology and have outfitted select models with the hybrid system. Toyota plans to have hybrid systems installed in all its models by 2010, and to produce one million hybrid vehicles a year.