Mobileye finds successful route to autonomous driving tech

TEL AVIV, Israel — The autonomous vehicle landscape is littered with failures as companies find they can't raise the capital to get the technology across the finish line.

Those likely to succeed, namely Waymo (the Alphabet subsidiary) and Cruise (the General Motors subsidiary), have deep-pocketed corporate parents and additional blue-chip investors.

Analysts expect Mobileye Global Inc. to join them as an industry survivor by supplying automakers rather than operating robotaxis.

As a division of Intel Corp., the Santa Clara, Calif., chip giant, Mobileye grew without the spotlight that shined on other autonomous technology developers, said Michael Ramsey, automotive and smart mobility analyst at Gartner Inc.

But since its October spinoff as a public company, "it has become clear that they have the technical expertise and the commercial relationships to become the supersupplier for autonomous equipment," Ramsey said.

Others agree. Consulting firm Guidehouse Insights ranks Mobileye atop its 2023 list of automated driving technology developers above Cruise, Waymo and Chinese developer Baidu.

But Mobileye has a different approach. The Jerusalem company is solely a technology developer, creating chipsets, software and systems for advanced driver assistance and autonomous driving. It has no aspirations to build or operate robotaxis. It will leave that to others, preferably companies buying Mobileye technology.

Instead of relying on what CEO Amnon Shashua describes as a series of "moonshots" to get self-driving cars on the road, Mobileye has focused on the building blocks that enable advanced driver-assistance systems.

Revenue from those products — versions of Mobileye's EyeQ chipset are in about 140 million vehicles from 50 automakers — is funding the development of increasingly sophisticated autonomous driving systems. These newer systems will build on each other, generating revenue and avoiding much of the successive "stratospheric" validation expenses required to add capabilities to automated and self-driving systems, Shashua told Automotive News.

Mobileye estimates it will collect about $2.1 billion in sales this year. It forecasts an operating loss of about $100 million as it invests in new generations of chipsets for assisted and autonomous driving technology.

"Mobileye has a good business strategy, a big footprint and cost advantages," Ramsey said. "Their equipment is cheap and highly capable."

The company's relationship with Volkswagen Group demonstrates how this strategy is progressing.

VW already uses Mobileye's EyeQ chipsets for basic self-driving features. Volkswagen also was the first to adopt Mobileye's crowd-sourced, cloud-enhanced data as a self-driving augmentation, Shashua said.

The system helps cars know their exact location based on Mobileye's Road Experience Management high-precision mapping system.

Mobileye's chipsets can pair with a vehicle's front-facing camera to collect route information in tiny bits of data and send them to the cloud.

"The idea is to extract data from stationary objects in the world. These are landmarks like traffic signs, traffic lights, lanes, poles, reflectors, anything that is stationary," Shashua said.

It relies on recognition information rather than data-heavy images and costs about $1 per vehicle per year to upload, he said. Mobileye has data from 90 percent of the roads in North America and Europe, thanks to millions of vehicles equipped with the system.

Vehicles traveling the same route mapped through this system will know how to track a path with centimeter-level accuracy when lane markings are poorly delineated, partially visible or absent.

Volkswagen's relationship with Mobileye is only growing deeper, partly because of the shuttering last year of Argo AI, the autonomous vehicle technology company it backed with Ford Motor Co.

The German automaker believes automated driving is becoming ever-more central to the customer experience, whether in a private vehicle or for broader mobility services, said spokesperson Fabian Lebersorger.

Automation, however, has two branches.

"In the area of private vehicles, the brands of the Volkswagen Group offer their customers advanced driver-assistance systems. Mobileye is a proven technology partner for the group in this area," Lebersorger said.

He said VW also works with Mobileye to develop autonomous transport as a service.

The Volkswagen Commercial Vehicles division will test a self-driving version of its ID Buzz electric microvan in Hamburg, Germany, and Austin, Texas. The vehicle uses the Mobileye Drive system, which is made up of its EyeQ chipset and sensing, mapping, and driving policy— the logic governing vehicle operations — technologies.

VW said the tests could lead to production of the self-driving vans. Previously, it has announced plans to launch a robotaxi service in 2025.

MAN Truck & Bus, part of Volkswagen's heavy-duty vehicle subsidiary, is also testing Mobileye technology for autonomous transit in Munich.

Moreover, Volkswagen Group plans to make Mobileye's SuperVision automated driving system available in a future Porsche model. SuperVision uses 11 cameras and a radar-based sensing system to allow hands-free operation under some conditions, starting with highway driving.

Shashua said he could not yet talk about which Porsche model will get the system, but it will go on a platform that other Volkswagen brands share. "It opens the door," he said.

Other brands, including Zeekr and Polestar, both part of Chinese automaker Geely Automobile Holdings, are SuperVision customers.

SuperVision is an important step in the journey to be a winner in autonomous driving, said Luke Junk, the vehicle technology and mobility analyst at Baird Equity Research.

Chauffeur is another. It is an eyes-off/hands-off driving system for consumer vehicles. Chauffeur requires a human to occupy the driver's seat, but the system takes over full driving responsibility in a gradually expanding set of conditions as its operational design domain expands. Highway driving would be its first use, but as the system gains capability, it will extend to other roads.

While Mobileye uses a different taxonomy that designates whether a driver must have eyes on — or can have eyes off — the road, depending on the capability, Chauffeur would fit in either the Level 2 or Level 3 automated-driving definitions as written by SAE International.
The system starts with three EyeQ 6 chipsets and uses surrounding imaging radars and front-facing lidar.

Mobileye has a development deal with Zeekr, and the automaker is starting to roll out the technology and expand its capability in China. Geely also plans to use the system in the Polestar 4 and said it has potential for other vehicles. Additionally, Mobileye said it expects to see $1.5 billion in Chauffeur revenue through 2030 from a different unnamed automaker.

While software and the related chipset business make a solid foundational business — Mobileye and analysts estimate it has about a 70 percent market share in the base driver-assist market — more-capable technology offers bigger economic benefits.

EyeQ chips go for around $50 a unit, Junk said. That business will continue, he said.

But the full SuperVision system has the most operational capability and a $1,500 value, 30 times more than the EyeQ, Junk said. Chauffeur will sell for even more, possibly more than $6,000.

Mobileye is "layering on a product cycle where the unit economics is exponential as we move to higher levels of autonomy," Junk said.

Moreover, he said, it has the capital, cash flow and technology to execute that strategy.

That leaves Mobileye poised for success at least in the midterm, but like so many others in the autonomy space, predictions for any company are risky, Ramsey said.

"Long term, there are still a lot of unknowns for autonomy and how people will use it," he said.