The autonomous vehicle has fallen off the public agenda in Israel in the last two years, and it seems that investors have also started to lose interest in it. If in 2018 and 2019 the raisings in the Israeli auto-tech industry amounted to more than two billion dollars, in 2022 they dwindled to a trickle with less than $150 million in aggregate (not including the Mobileye issue).
● They gave up the possibility that the purchase tax would be frozen: the car importers raised the prices of the trams
● The new generation of the Ranger Rover Sport: the price starts at NIS 758,000, and what about the delivery time?
But quietly, behind the scenes, Israel is still a leading global player in the field. Local companies that have amassed a reasonable cash register, have real products and a real business model, are currently receiving respectable contracts from the giants of the automotive industry, and at the annual technology exhibition CES, which opened last week in Las Vegas, it was possible to learn that they are not freezing in their tracks.
The road to a driverless car is long
At the center of interest for the auto-tech industry at the exhibition was Mobileye, whose successful IPO in the midst of a crisis was one of the biggest bright spots of 2022 for the capital market as a whole. Let’s recall that the company, which was issued at approximately $16 billion, is currently trading at a value of approximately $25 billion, and if we rely on the words of the company’s chairman, Professor Amnon Shashua, it may carry out a significant value overflow in the future.
Mobileye currently owns about 80% of the global market for active driving assistance systems (automatic braking, intelligent cruise control, steering control, etc. – what is known as ADAS). The company expects revenues of $17 billion from this field by the end of the decade, and announced that in 2022 it won hundreds of new contracts to install such systems in future vehicle models.
But Mobileye’s captains know very well that in order to justify serious profit multiples and a “dream value” in the Nasdaq, you need to “sell” future plans to investors that will generate new sources of income. There were quite a few of these in the entertainment presentation, which focused mainly on strategy.
The chairman of Mobilay opened his remarks with what he calls the “pendulum of public opinion” in relation to the autonomous vehicle. That “pendulum” has moved in the last four years between enthusiasm and expectations for an autonomous vehicle “around the corner”, and the loss of public interest in the autonomous vision.
The roadmap presented by Mobileye at the CES exhibition
1. Systems that relieve the driver of most of the “driving duties”, but still require him to watch and intervene if necessary
2. A system of imaging sensors based on radar and laser, alongside software and upgraded processing hardware
3. Driving without the presence of a driver in the vehicle using remote control technology
According to the road map presented by Mobileye at the exhibition, the next step on the way to the autonomy of the private vehicle will include systems that allow “hands-free driving, but with eyes on the road”, as defined by entertainment. In other words, systems that can relieve the driver of most of the physical driving tasks, but still require him to monitor and intervene if necessary with the help of driver monitoring systems that are inside the vehicle.
He also added that these capabilities can already be provided by Mobileye’s SuperVision system, based on 11 peripheral cameras. The system is already included in electric vehicles of the GEELY group, and contracts have been signed for its supply until 2026 for nine future vehicle models of six other vehicle brands in the world. According to him, these are systems on which the profit per unit is significantly higher than the profit on simple ADAS systems.
The next phase, which will begin in about three years, will include upgraded versions of the same system with the addition of imaging sensors based on radar and laser, alongside software and upgraded processing hardware, advanced mapping, etc., which will allow driving “without hands on the wheel and without eyes on the road.” The radar and laser assemblies are currently being developed independently by the company.
Mobilay calls the next generation system “private driver” (SCHAUFFEUR), which has a high level of reliability and a lower error rate than those of drivers. Their marketing advantage will be the ability to offer drivers “free time” in the car without being bothered while driving. It will happen towards 2026.
The final stage will be the ability to drive without the presence of a driver in the vehicle, although the use of remote control technology will be required.
Expectations from autonomous taxis are decreasing
And what about the great promise of “autonomous taxis” (ROBOTAXI), which will be able to transport passengers commercially without a driver? Just three years ago, the company introduced robotic taxis as “the next big promise.” Mobileye’s parent company, Intel, also acquired MOOVIT for about $1 billion with the goal of “offering smart services of collaborative transportation.”
But from the presentation at the exhibition, we got the impression that the current approach of entertainment in relation to this field is much more chilled and sober, as befits a listed company that is measured by its profits. According to him, “the challenge today in autonomous taxis is not the technology, but building a profitable business, which will not cause a loss.”
Shashua said that Mobilay has no intentions of becoming a transportation service provider, but only to work in partnership with manufacturers of platforms and shuttles for autonomous taxis, as well as with end operators who are supposed to create the demand for these platforms. Mobilay predicts that contracts in the field of autonomous taxis will generate revenues of about 3.5 billion dollars between 2025 and 2028 – which is a relatively modest amount.
Are the Israeli autotech companies in the crosshairs?
As mentioned, Mobileye also independently develops laser and radar sensors for cars with high autonomous levels, and their prototypes were presented at the exhibition. But it will take some time before these products mature for mass production – around a year or two for the laser unit and three or four years for the radar chip – and in any case these may be expensive HIGH END components.
Which leads us to two more respected representatives of the Israeli auto-tech industry at NASDAQ, INNOVIZ and AEBE, both of which presented significant and global breakthroughs in their field at CES.
INNOVIZ introduced a rotary lidar unit that can scan the vehicle’s surroundings in 360 degrees for a range of up to 300 m. Its solution will be compact and cheaper by many orders of magnitude than the 360 degree solutions currently on the market, and it already has a respectable customer base in the global automotive industry, including certification as a direct supplier to the Volkswagen Group.
ARBE also presented at the exhibition an advanced radar that detects the vehicle’s surroundings in four dimensions and in 360 degrees – one of the first solutions of its kind. The company also has a customer base in Asia.
These two companies have something else in common besides being Israeli and being able to offer immediate solutions that are ahead of the global market – both are currently trading at a lentil price after sharp declines since their issuance. ARBE is traded at a value of about 221 million dollars and INNOVIZ at a value of about 560 million dollars.
Will Mobileye take a “shortcut” to the goals it presented through the merger and acquisition of Israeli companies at bargain prices? This would involve the company giving up quite a bit of ego, but we would not rule out such a possibility outright.