In important news that probably went largely unnoticed by the investment community, not Tesla (TSLA), Nvidia (NVDA) or anyone else, but in fact Intel (INTC) Mobileye hit a big milestone in late 2021 entering volume production of its camera-only SuperVision autonomous driving system. Combined with Mobileye’s robotaxi business which will start operating in two international cities in 2022 (based on a camera-based system combined with a lidar and radar system), this means that autonomous driving has finally moved from the laboratory to the factory and is poised to bring billions, if not billions of dollars in value to the economy as technology gains momentum in the years and decades to come.
Additionally, perhaps the most important news from CES this week was the announcement of the world’s first mainstream L4 AV, slated for launch in early 2024, once again beating others such as Tesla in the fist.
As such, Mobileye could become one of the new Big Tech companies as the backbone of the 21st century autonomous transportation system. Therefore, I’m launching Mobileye (which will go on an IPO in mid-2022) at a market cap target of $ 1T, which could be a 20x increase compared to its IPO. suggested $ 50 billion.
I have already explained in detail how Intel dropped bombs on (1) the silicon AI market, (2) 5G networks, and (3) the semiconductor industry.
When people talk about autonomous driving, there is a myth that is often brought up: the need for arithmetic (measured in TOPS). For this reason, many investors have named Nvidia as the beneficiary of autonomous driving. For example, NIO (NIO) uses 4x SoC Nvidia Orin in its upcoming ET7 NIO autonomous driving system, for a grand total of 1 POPS (1000 TOPS), combined with over 30 sensors, including lidar.
I’m providing this comparison to give the reader an idea of Mobileye’s impressive approach: Mobileye’s SuperVision, which went into production in late 2021 in the Geely Zeekr 001, only uses two EyeQ5 SoCs for a total of 30 TOPS. Still, despite having over 30 times less compute resources, Mobileye achieves roughly the exact same (if not more advanced) capabilities as any other car currently in production. Mobileye’s system also uses around 3 times fewer sensors because, like Tesla, SuperVision only uses cameras (using seven cameras and four parking cameras).
To be precise, the SuperVision allows completely hands-free driving (like a robotaxi or “full self-driving”). (The reason the system is nonetheless classified as L2 + is because it is not validated for the safety requirements for L4.)
In other words, what you do with the available compute resources (the software) really matters and Mobileye has proven over the years that it can do more with less. It just means that Mobileye’s software is much smarter because it can use the available computation more efficiently. The Mobileye CTO recently provided a deep dive into the SuperVision system, which is worth watching to see the system in action in cities like Paris and New York. Note that no other company in the world has tested its autonomous driving system in as many places as Mobileye, another testimony and proof of Mobileye’s ability to evolve its system, which I detailed previously: Waymo May Be Disrupted By Its Inability To Scale (NASDAQ:GOOG).
General public AV
SuperVision is still only an L2 + system: although it is fully capable of driving autonomously, it has not been validated for the reliability requirements of the “Holy Grail” L4. So, of course, it will take a few more years for autonomous driving to become a reality for the consumer: Mobileye is targeting 2024.
In its L4 system, in order to achieve the required reliability, Mobileye will combine the camera-only SuperVision system with a second system based on lidar and radar (similar to its robotaxis approach). Mobileye even suggested that there might even be three subsystems if lidar and radar are further split into separate systems, which will become possible thanks to Mobileye’s internal lidar (based on advanced silicon photonics from Intel ) and the innovative high resolution in software-defined home radar. In particular, Mobileye considers high-resolution radar promises to lower the cost of affordable AVs, as radar is inherently 5-10 times cheaper than lidar.
So while it is debatable whether and to what extent the recent SuperVision system counts as “fully autonomous driving,” it nonetheless serves as the first piece of evidence that autonomous driving has finally gone from something that seems perpetually in five. years, to a tangible reality. commercial reality.
In any case, the great of Mobileye announcement at CES was his very first L4 design victory with Geely Zeekr, scheduled for early 2024. This system will be based on 8x EyeQ5 SoC (or around 120 TOPS).
Mobileye further announced its next-generation SoC for widespread adoption of AVs from 2025. The EyeQ Ultra is touted as Mobileye’s AV-on-a-Chip, providing all compute resources in a single chip. It is one of the most heterogeneous chips ever created, containing CPUs, GPUs, NPUs, FPGAs, VPUs and more.
With only 176 TOPS, EyeQ Ultra is far more efficient than other AV solutions, delivering the performance and price required for consumer AV.
In addition to expanding its current position as an industry leader in ADAS to AV, Mobileye saw several years ago that autonomous driving would begin with the robotic axis first, and has also invested to lead this. new industry (as evidenced by the acquisition of Moovit in 2020 for example). Mobileye has been testing its robotaxis for many years in Israel, extended its testing to Munich / Germany at the end of 2020, and expanded its testing to many other cities in 2021, including Detroit, Paris, Asia, Tokyo and New York.
This will culminate with the robotaxi’s initial launch in Tel Aviv and Munich in mid-2022, which is on schedule with what Mobileye has been saying since 2018 (!). This cannot be stressed enough because in the same time frame, virtually all of Mobileye’s competitors, including Google (GOOG) (GOOGL) Waymo, Tesla and GM (GM) Cruise, have had their programs delayed. Mobileye is on track for what it said four years ago and aims for international deployment from the start (made possible by Mobileye’s unique global mapping approach as opposed to the traditional geolocation approach) .
Also mobileye announcement several extended ADAS partnerships at CES, including those to bring its REM mapping for ADAS lane centering to Volkswagen (OTCPK: VWAGY) and Ford (F).
Mobileye further announced that it won 41 designs for a total of 50 million units in 2021. For comparison, Mobileye delivered its 100 millionth EyeQ by the end of 2021.
200 PB of data
An argument often heard is that only Tesla owns the Dojo data and supercomputers. This is wrong, because Intel detailed Mobileye has 200 PB of data and 500,000 processor cores:
Mobileye has spent 25 years collecting and analyzing what we believe to be the industry’s premier database of real and simulated driving experience.
Given Mobileye’s near flawless execution of its overall vision and strategy, Mobileye is quickly establishing a tangible leadership position in robotaxis and consumer AVs. As such, I would say that Mobileye deserves a top rating as one of the new Big Tech companies to come.
As such, the sky is the limit. For example, Tesla investors have for years attributed multibillion-dollar valuations to the company based on the million robotaxis promised (but never delivered) in 2020. Obviously, it’s not Tesla but Mobileye which is now making this premise a reality.
Investors should note that robotaxis are inherently poised to be highly profitable as they remove virtually all operating costs, removing thousands (if not millions) of drivers from the (transportation) economy. This will make robotaxis both cheaper and more profitable than traditional ridesharing services like Uber (UBER), Lyft (LYFT) and DiDi (DIDI).
As such, there is indeed no reason why Mobileye cannot aspire to that $ 1,000 billion market cap target, which is indeed the target I am throwing the Mobileye cover at.
Given Mobileye’s technological advancements, which, as detailed, now translate into numerous trade deals, the main risk now is regulation. However, Mobileye already has noted it is set to operate its robotaxis in Germany and Israel without a safety driver by the end of 2022.
Takeaway for investors
Although the launch of Geely Zeekr 001 with Mobileye’s camera-only autonomous driving system has gone largely unnoticed, it represents an important first step towards the ultimate blue sky vision of an economy based on driverless transport, potentially freeing up several million jobs. The value this will create will be immense and, therefore, Mobileye, as a leader in driving this revolution, should be valued exactly as such.
The next step is already planned in the coming months with the start of Mobileye’s international robotaxi activity. The next step after that will be the completion of Intel’s internal lidar and radar, which will reduce the cost to levels suitable for mass production in mainstream vehicles. This is scheduled for early 2024 (also in partnership with Geely Zeekr) and will likely be the world’s first commercial L4 consumer AV.
As a result, autonomous driving is quickly becoming a commercial (and profitable) reality, for which the Mobileye IPO in mid-2022 offers investors potentially one of the best investments for decades to come.