A rift between Tesla Motors and its key supplier, Jerusalem-based Mobileye, has sent the local company’s shares tumbling and fanned debate on self-driving vehicle technology. Mobileye manufactures chips for the electric vehicle maker’s semi-automated Autopilot system.
Mobileye shares, which have been wildly popular with institutional and tech investors, were down 7.7% prior to the close of the day’s trading yesterday at $45.50, after the Israeli company said its contract with Tesla would not be renewed. Tesla’s stock fell 0.9% to $227.94 prior to the close.
Neither Mobileye nor Tesla would say which company initiated the move. The split comes as Tesla’s Autopilot faces scrutiny from regulators following a fatal accident in early May. The crash spurred new debate about self-driving vehicles and the level of technology necessary to reduce the number of such incidents.
Mobileye’s EyeQ chips provide image analysis for Tesla’s Autopilot system, which helps the automaker’s vehicles steer and stay in lane. Mobileye said in a statement that it would continue to support Tesla’s ongoing upgrades to Autopilot but without any hardware updates.
Mobileye, which is working with about two dozen global vehicle manufacturers, said it planned to offer a hardware/software system that can gather, fuse and analyze data from 20 different sensors, including cameras, lidar and radar by 2020. Mobileye’s new EyeQ5 “system on chip” will be an important component in a fully autonomous driving system being jointly developed with BMW and Intel and aimed at production in 2021.
BlueStar Indexes, which manages a U.S.-listed Israeli tech fund, said yesterday that Tesla accounted for less than 1% of Mobileye’s current revenue and about 2% of projected 2019 sales. Compared with clients such as Volkswagen and General Motors, “Tesla’s impact is quite small,” BlueStar said.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now