How Mobileye persuaded Porsche to go hands-free

Possibly the most significant automotive supplier win announced this year was Mobileye signing on Porsche for its Supervision hardware-and-software combination, which will allow hands-off driving from 2025. You might wonder why. A posh assisted-driving system going to a premium manufacturer with annual sales of just over 300,000 is hardly earth-shattering news amid total global car sales of 66 million; and it’s only going into the Macan EV initially. But its significance goes beyond mere numbers. “Supervision we think is a redefinition of premium,” Mobileye founder and CEO Amnon Shashua told Autocar in a recent interview. Given what Mobileye has already achieved in the field of advanced driver assistance systems (ADAS) and Porsche’s high status within the behemoth Volkswagen Group, this is potentially big. The Intel-owned Israeli company is one of the trio of smart-chip companies, along with Qualcomm and Nvidia, that car makers are leaning on to deliver software-powered features that they believe will become the new differentiator. Mobileye has been on the back foot in recent months as Qualcomm’s move into the ADAS led to it snagging business from its rival. First BMW announced it was switching to Qualcomm for assisted systems for cars on its 2025 Neue Klasse EV platform. Then in January, Volkswagen Group software division Cariad also announced that it was moving to Qualcomm for its next-generation SSP platform. Mobileye was seemingly out. The reasons for VW ousting Mobileye on future models were noteworthy. Cariad boss Dirk Hilgenberg told journalists at the CES show in January that VW’s unhappiness with its Mobileye contract and its use of data harvested from the cars was a big motive for VW to create its own software division in the first place. “That's a contract the Volkswagen brand did prior to Cariad. That's why Cariad was founded, because we aren't having access,” he said. However, five months is a long time in the fast-paced world of automotive software. Hilgenberg is now out amid a Cariad reshuffle and Mobileye is once again in favour, having being allowed to announce the Porsche win (car makers often don’t disclose supplier names). From this point, Mobileye believes that it can score more VW wins with Supervision, which uses 11 cameras, the latest EyeQ5 chip and Mobileye’s intelligence to deliver level-two-plus autonomy (so hands-off but not eyes-off driving). “It's not just Porsche. This opens the door to much broader volumes in the entire [VW] Group,” Shashua said. “A success like this really means, I believe, a very, very long-term relationship, because the system is so complex and the performance is so high that once it's in the car, you don't go and replace it by some other supplier.” Shashua’s confidence and the fears of Cariad’s former boss come from the same place: Mobileye has built a formidable ADAS business with level of knowledge that might be unsurpassed in this game, so much so that car companies looking to vertically integrate that knowledge themselves might be too late. Mobileye was founded by Shashua in 1999, when he was a professor at the Hebrew University of Jerusalem, off the back of his research into a vision system to detect vehicles using only a camera and software algorithms on a processor. Mobileye’s first EyeQ1 product combined a camera and radar for Volvo in 2007 for adaptive cruise control, but by the EyeQ2 of 2010, the radar was dumped for just a camera in a pedestrian-detecting automatic emergency braking system for Volvo and a front collision warning system for General Motors and BMW. The genius in creating sophisticated ADAS from a camera and chip costing “tens of dollars” (Shashua’s words on his company’s first quarter earnings call) means Mobileye now has 70% of the global ADAS market, according to estimates from Evercore ISI, a bank, in a report published in November. Mobileye itself says it does business with 50 car makers across “hundreds” of models and shipped 34 million chip-and-camera systems last year. But Mobileye’s truly clever trick has been to harvest data from the more recent EyeQ camera-and-chip combos to create a crowd-sourced high-definition map called Road Experience Management (REM), that crowd being cars built by its customers, including the VW Group. What this means is that millions of cars are building up Mobileye’s knowledge of not just road networks but also how drivers are using them. Cariad’s former CEO belatedly realised that Mobileye was gaining knowledge that VW itself could be using for its own competitive advantage on semi-autonomous driving. (Shashua takes a different view and says VW has a perfect right to download all the same information. “There's nothing to prevent Volkswagen taking this data and building whatever they like to build,” he told Autocar.) VW is already using that so-called ‘swarm data’ generated by REM to improve the intelligence of its assisted driving systems, for example placing cars within lanes more naturally. A high-definition map created in the traditional way by lidar could position you correctly for a right turn across oncoming traffic. “But it will be a theoretical point," said Shahua. "On the other hand, REM knows where humans are yielding." It's not only cheaper than high-definition maps, it’s also much more frequently updated. Mobileye claims it could map the entirety of Israel in 24 hours just from data sent over the air from VWs and cars from nine other vehicle makers sending back REM data. With this knowledge, Mobileye created Supervision. Launched on Geely's Zeekr 001 (an EV that's coming to Europe this year), Supervision is also coming to the Polestar 3 and Polestar 4 (pictured below). There’s another Geely brand signed up, too. By 2026, six car makers and nine brands will be using Supervision, Shashua told Autocar. This is what gets bank analysts excited. Last year, Mobileye’s revenue was $1.9 billion (£1.5bn), up from $1.4bn (£1.1bn) the year before. But from the “tens of dollars” that Mobileye makes from the relatively simple chip-and-camera combo now, Supervision jacks that up to $1000-$2000 per vehicle, estimates Evercore. Sign up someone like Toyota and that’s $4bn (£3.2bn) revenue from one manufacturer alone, Evercore calculated. Shashua said the hardware cost is still pretty small, with the gains coming in software. Evercore reckons that will translate to 50% margins. Supervision is the next step to full autonomous driving. Shashua is targeting 2026/2027 for eyes-off operations for Mobileye's Chauffeur product, which adds radar and lidar to the 360deg camera of Supervision. He said in April that two car companies are testing Chauffeur. Mobileye meanwhile is hoping that it can reverse VW’s decision to change suppliers with new management at Cariad. “Volkswagen is one of our biggest customers," Shashua said. "The deal with Qualcomm... Let's hold our breath and see what happens in 2028, 2029." The fact remains car makers are still worried that smart suppliers like Mobileye will take a substantial cut of high-margin software revenue that they feel should be theirs, especially as software does become more of a differentiator. Evercore sounded that note of caution to its investor clients amid its Mobileye bullishness, saying: “Insourcing ADAS is possibly the biggest threat, on a very long-term, 10-to-20-year view." The case in point is Tesla. Tesla was one of Mobileye’s first customers after signing up for EyeQ3 to power its Autopilot ADAS product rolled out in 2015. But Tesla has since gone it alone with the same Mobileye philosophy of using cameras only to power its equivalent of Supervision, Full Self Driving (a name that omits to mention that the driver still has to pay attention). For now, however, Shashua is confident that car companies can’t replicate what he has. “You need to source what makes sense and develop what makes sense,” he said. “The stuff that Mobileye has doesn't make sense to insource.”