Mobileye NV (NYSE:MBLY) may have lost a key partner with Tesla, but it has gained a new one that will perhaps be less cavalier when it comes to self-driving technology. The company announced on Wednesday morning that it is now partnering with WABCO, which is a major safety supplier in commercial vehicles. It’s the latest deal in a string of partnerships that Mobileye has been signing as it expands its reach within the autonomous vehicle market.
Mobileye partners with WABCO
In a press release, Mobileye said it is partnering with WABCO to work on commercial vehicle solutions that combine advanced emergency breaking functions with its REM (Road Experience Management) technology. The solutions will integrate Mobileye’s REM vision and mapping systems with WABCO’s electronic braking, stability and emergency braking systems and add in active steering control. The resulting products will then be offered to manufacturers and operators of commercial vehicles.
The two companies expect to integrate the REM data from the system with real-tie data collected from WABCO’s digital vehicle system and performance information. All of this information will also be streamed on the cloud for “off-vehicle data analytics support.”
No timeframe on the project was given, and RBC Capital Markets analyst Joseph Spak expects the volumes on any resulting project to be small. He noted that it will use EyeQ4 and that in addition to the chip and software for the project, Mobileye will also provide some electronics for it and possibly a camera too. As a result, he said that this partnership is different than the company’s other partnerships. The results will be placed in its Aftermarket segment.
Mobileye to build real-time maps
Dougherty & Company analyst Charles Anderson said in a note dated September 19 that his team hosted meetings with Mobileye management last week. One of the highlights was using cameras on ADAS vehicles to create real-time HD maps, which he says is the company’s main differentiation in autonomous driving.
Management explained that soon Mobileye would be in a unique position in the area of autonomous driving because it was working on finalizing agreements for its REM technology with Volkswagen, General Motors, BMW and Nissan. It seems Wednesday’s announcement about the WABCO adds another tier here.
According to Anderson, after Mobileye’s ADAS cameras are placed on vehicles, they will start collecting dadta about the roads and enable the company and its partners to build a real-time map in HD that can be used by autonomous vehicles. The company expects that by 2019 or 2020, it will have between 3 million and 4 million vehicles collecting data for these maps. Anderson particularly likes Volkswagen as a partner and suggests that it could serve as a model for other REM contracts. The reason is because the German automaker has a large 10% share of global auto sales per year and is part owner of the HERE mapmaker.
New revenue stream for Mobileye
The Dougherty analyst also highlighted that REM could offer new revenue streams as incentives for automakers while also adding market share in autonomous driving for Mobileye. He explained that it makes sense for automakers to give the company access to the data collected by the chips it makes for their cars so that I can create a map that could then be licensed to a mapmaker.
Anderson said Mobileye can create a consortium allowing automakers to contribute to REM and in exchange, receive licensing fees proportional to the amount of data they contribute to it. Then mapmakers like TomTom and here could pay for the data to set their services apart via real-time information, he suggests.
Of course the other component of REM and real-time mapping deals with autonomous driving to help vehicles “see” their surroundings. Anderson doesn’t believe there are any competitors for Mobileye in sight yet because he sees them as missing one or two of the most important components. However, he adds that vehicles which are fully autonomous are now seen as scary.
Mobileye shares rose 2.55% to close at $43.10 on Wednesday.
