July 26 Shares of Mobileye NV, an Israeli maker of driving-assistance chips and software, plummeted on Tuesday after the company said its contract with Tesla Motors Inc would not be renewed after its expiry.
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Mobileye also reported better-than-expected second-quarter profit and revenue on Tuesday, helped by strong sales and higher prices for the EyeQ chip line. Mobileye’s EyeQ3 processor is a key component of Tesla’s controversial Autopilot system, shown.
About 9 million Mobileye shares had traded, more than double the 30-day average. Tesla stock is also trading in the red, down 1.72% as of 10:58 AM EDT. “Financially, Tesla is not material to the financial results of Mobileye”.
“We think that that’s not in the interest of Mobileye to continue with Tesla in that area”, Shashua said on the conference call. This includes a significant upgrade of several functions that affect both the ability to respond to crash avoidance and to optimize auto-steering in the near term, without any hardware updates.
Mobileye executives said its EyeQ3 technology used for image analysis in Tesla’s cars with its Autopiliot technology would not extend beyond what’s now used in Tesla vehicles.
BlueStar Indexes, which manages a US -listed Israeli tech fund, said on Tuesday that Tesla accounted for less than 1 percent of Mobileye’s current revenue and about 2 percent of projected 2019 sales.
BMW Group, Intel and Mobileye are convinced that automated driving technologies will make travel safer and easier.
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Tesla did not comment on the Mobileye report, and it is not known for sure which company instigated the divorce. He is skeptical over the tech startup’s capability to achieve fully-autonomous driving technology with just a camera, which has view of vision of less than 50 degrees. TechCrunch cited Mobileye’s chief technical officer, who said that EyeQ3 shipments will continue for the “near future” and maybe longer, but, “We simply decided where we wanted to put our resources for the future of autonomous driving … and we decided what we decided”.
