Mobileye is a European Leader in Autonomous Vehicle Adoption at Scale

I write about the future of technology on First Futurist substack Newsletter here.

Intel is taking its self-driving company Mobileye public in 2022 and while Intel will never achieve dominance again, this will enable it to raise funds and for us to invest in the most important part of the future of Intel, an AV leader. See the website of Mobileye?here.

While the starting valuation will be overvalued (like everything else in equities today), eventually you’ll want to invest in?Mobileye.?According to my research, they are among the biggest winners of the autonomous transportation revolution.

It is the biggest startup to come out of Israel in recent years. Intel acquired Mobileye in $15.3B deal in March, 2017. It’s been an incredible investment, and it’s only going to get better.

Mobileye has achieved record revenue year-over-year with 2021 gains expected to be more than 40% higher than 2020, highlighting the powerful benefits to both companies of our ongoing partnership. It’s just getting started. While some market pundits think the pivot to EVs is the bigger deal, I actually think the pivot to autonomous transportation and logistics networks is the far bigger deal in terms of global TAM.

To put it TL;DR style, Mobileye makes safety systems for a number of automakers and aspires to launch its own robotaxi business, among related business models. In just a few short years since its acquisition in 2017, Mobileye has been able to triple annual chip shipments, revenue and headcount. It’s going to be a very profitable part of the future of AVs.

New CEO Pat Gelsinger admitted Tuesday that his company has had a “mixed history” when it comes to acquisitions but the quality of Israeli innovation is really showcased here.

• Mobileye is worth and will be worth a lot more than what Intel paid for it.
• Contrary to most IPOs this is actually something you want to invest in for the 10+ year timeline and buy early on the dip.
• There are some IPOs of the early 2020s that will become major companies a decade from now, picking those today can have significant benefits for your portfolios.

From TechCrunch we see that this recent news comes only a few months after?Mobileye agreed to partner with car rental giant Sixt to launch a robotaxi service in Germany next year.

In 2021 Mobileye has scaled autonomous vehicle testing programs to multiple cities in the U.S., Europe and Asia,?including New York City, and says it has secured 41 new advanced driver assistance system program wins across more than 30 automakers. It’s self-driving taxis system could be very interesting to follow along with GM Cruise and a handful of others.

This is also just a smart way for Intel to raise money to try to repair a lot of the damage that has been done to its brand image and ability to keep up in an ultra-competitive sector and a supply-chain-shortage environment for chips.

Mobileye plans to produce?35,000 purpose-built driverless delivery vehicles with Udelv?by 2028 and has secured?multiple deals for mobility-as-a-service programs in 2023.

The advent of the smart car is accelerating. Intel had been steadily ceding its share of the global semiconductor market to leaner companies like Qualcomm, which focused on surging demand for smartphones rather than traditional desktop PCs. Acquiring Mobileye was seen by Intel as a unique opportunity to get in on the future of self-driving vehicles—essentially, rolling computers on wheels.?

• I would not be surprised if the IPO values Mobileye in the area of $30 to $40 billion.

The hype that this will generate for Mobileye will enable it to acquire more talent. No longer would the Israeli company be viewed as just a simple supplier to the automotive industry, but rather a technology leader in its own right. Intel of course holds a majority share in it but tries to give it freedom to develop.

So why is this so exciting? By the middle of next year, Intel plans to carve out the Israeli firm and take it public. As part of the IPO, Intel’s mobility services brand Moovit AV will be reassigned to Mobileye,?effectively bundling all robotaxi-relevant operations?with the new entity to make it more attractive as an autonomous-driving tech play for investors.?

I wouldn’t advocate investing in Intel, but Mobileye specifically if it drops to a reasonable price target. And investing in a self-driving AV specific ETF. These likely do not yet realistically exist yet given the nascent future industry.

Mobileye likely have a decent amount of propriety tech that will be important to the future of AVs and automated logistics systems. The spinoff would represent a somewhat unique opportunity for investors to buy exposure to self-driving vehicle technology suppliers. Rivals Waymo and Cruise, for example, are units within Google and General Motors, respectively.

Mobileye has over?1,700 employees.

Look for the IPO around June of 2022. Analysts contend the Israeli company probably doesn’t need Intel to achieve its growth ambitions.?Mobileye has long been one of the top leaders in the burgeoning field of advanced assisted and autonomous driving, supplying technology to more than 88 million cars on the road to date. According to Mobileye’s website, customers include BMW, Audi,?VW, Nissan, and General Motors.

The valuation of Mobileye by mid 2022, could be even upwards of $50 billion or 25 times revenue.

Mobileye, of its own accord, broke ties with Tesla five years ago over safety concerns?following a fatal crash. Mobileye could become a key supplier for Apple’s entry into the smart car arena in 2025 or 2026.

Mobileye relies on its own proprietary technology rather than on incorporating know-how from Intel. Eight units of its deep-learning chipset, the EyeQ5H, will power all the sensing, mapping, and path-planning for its upcoming robotaxi service in Germany.?

Comparing China or Germany with the U.S., the rollout of the technology is impeded by a lack of federal legislation, with each state responsible for setting up its own laws governing the use of fully autonomous self-driving cars. Just like with EVs, the U.S. is very much behind in terms of how robo-taxis will scale in the 2020s and 2030s.

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