Mobileye Is Taking On Waymo & Tesla

This week’s CES was full of slow but steady advancements to a world of fully autonomous vehicles. I’ve covered this extensively with autonomy playing a major role in my thesis around Lyft, Uber, Mobileye, and to a lesser extent Alphabet (Waymo).

Today, I want to explain why Mobileye is a company you should watch as a major player in autonomy. It doesn’t make vehicles itself, but it makes the hardware and software that enables autonomy and with those systems could grow from a company with $1.8 billion in revenue today to an order of magnitude more than that by the end of the decade.

Mobileye at CES

Most of what I’m going to cover is based on Mobileye CEO Amnon Shashua’s presentation at CES. If you have time, it’s worth watching. Shashua isn’t a showman, but we’re talking about autonomous systems that can determine the life and death of riders and unsuspecting people in the world. I’ll take a dry academic over a showman in those conditions. (Yes, this was a shot at Elon Musk)

Mobileye’s Product Lineup

I’ll start with the products Mobileye sells and they’re ordered from least complex (left) to most complex (right). Most of their current revenue comes from the single-camera ADAS product that only costs about $100 for automakers. Surround ADAS will roll out this year and SuperVision, while in production, is only in production with Zeeker and Polestar at low volumes.

The idea for the business is that it will move up the curve from a $100 product to $4,000 or more over the next 4-5 years, potentially as a standard on nearly every vehicle. That’s the context in which to view the company’s presentation.

Getting to Full Autonomy

The presentation was framed around getting vehicles to full autonomy at scale, which would “revolutionize transportation”.

What I appreciate is Mobileye giving the most sober assessment of the autonomy market as it exists today and the tradeoffs everyone has made in their designs. You can see in the slide below that autonomy requires both precision and what they refer to as recall, or the ability to scale both from low costs and wide availability. Waymo is extremely precise but isn’t yet scalable because of the need to map each city and the high cost of vehicles. Tesla is scalable, but not yet precise enough to be L3, L4, or L5 autonomous.

The question is, how quickly will both improve their deficiencies?

Where is Mobileye?

Today, Mobileye is on a Tesla-like path with SuperVision (SV52) but is only available in certain locations, like highways.

The next version of SuperVision (SV62) will go into production in the next year in 17 car models, including Porsche, Audi, Bentley, and Lamborghini.

A step further will be the Drive product that’s being tested in Texas and Europe. This is the product that could allow anyone to build a fully autonomous fleet of vehicles, a la Tesla’s vision. And Mobileye’s partnership with Lyft could give Lyft a leg up in getting these fleets into ride-sharing.

Getting to Full Autonomy (in 2027)

The best outcome for Mobileye would be getting Drive into millions of vehicles around the world, just like it has its ADAS system in millions of vehicles. The economic idea would be that automakers could build their own systems (NVIDIA is helping in this respect) and vertically integrate, but few would have the scale to make hundreds of millions in cost make sense to spend in-house. Or, they can make autonomous systems a variable cost of somewhere around $20,000 per vehicle, a fraction of the cost of a Waymo system.