Chasing the consumer autonomous vehicle dream with Elon and Amnon

Yole Développement (Yole) has recently published several reports about the autonomy trend, “Sensors for Robotic Mobility 2020”, “Sensing and Computing for ADAS Vehicle 2020” and “AI for Automotive 2020” that will be soon available. Within the ecosystem Tesla and Intel-Mobileye made the news in early 2020. They share the same automotive market, with Advanced Driver Assistance System (ADAS) hardware and software, they also share the same dream of reaching all the way to the Automated Driving (AD) market. The AD market currently involves a handful of players running robotic vehicles. Selling the vehicles to the public has never been the primary intent of these players, they always claimed Mobility as a Service (MaaS) as their primary goal. So how does an “ADAS to AD strategy” fit in for Tesla and Intel-Mobileye?

Here at Yole, we always made a clear distinction between the ADAS solutions currently on the road, which mainly provide Automated Emergency Braking and/or Lane Keeping Assist, Traffic Jam Assist and the robotic companies such as Waymo, Cruise and Zoox, which provide real autonomous vehicles (AV), mainly for prototype robotaxi services. For a few years we were asked many times about the protruding sensors of robotaxis being an issue if they were to be sold to consumers. But that’s totally the opposite of the situation right now. The ADAS players, Mobileye, Tesla and Toyota/Denso, are looking at the robotaxi market while still promising consumer versions of their autonomous vehicles. For now these “consumer AVs” as envisioned by Amnon Shashua, the CTO of Intel Mobileye, and also by Elon Musk, the CEO of Tesla, are only promises. It’s a five year-old promise if we refer to Mr Musk, and a six month-old one from Mr Shashua. Those two leaders are nevertheless preparing their companies for the forthcoming AD disruption. They are obviously preparing for a shift in their business models. So let’s review the recent moves of these two players in detail.

Intel-Mobileye
On the 4th of May Intel-Mobileye (Mobileye) announced the acquisition of Moovit, a MaaS solution company for approximately $900M. In January Mr Shashua presented the results for his company, having delivered 17.4M units of its ADAS computing chip, a 40% increase from previous year. In its press release Mobileye disclosed 2019 revenue of $870M, nearing the price of the acquisition. The System-on-Chip (SoC) from Mobileye is indeed powering ADAS solutions from Volkswagen, BMW, Ford and Nissan, with 54M vehicles on the road.

Tesla
Tesla made the news due to its impressive growth, having delivered 367k vehicles in 2019. This is a tiny 0.4% of global automotive market but a 50% increase from the year before for Tesla. Revenue increased 15% in a sinking market where global automotive shipment volumes contracted by 5%. In April last year it unveiled new computing hardware using two Full Self Driving (FSD) chips capable of 70 Teraoperations per second (Tops), claiming it would bring its car to autonomy. Tesla became a semiconductor player by supplying itself with a dedicated SoC for ADAS and AD. At time of release Mr Musk mentioned that if they were to be autonomous Teslas would be “bargains” at current prices. Tesla has currently approximately 1M vehicles on the road.

If we were to make a business model parallel with the world of personal computers, the sales of EyeQ chips from Mobileye is very much similar to Intel supplying chips to the PC makers of the world. In contrast, Tesla is going the Apple way, going vertical and owning its chip design, while using a fabless approach for sourcing. This is a business case discussed at length in all tech business strategy books. The benefit of the Tesla way is to be faster to market, the drawback is to do it alone and ultimately to lack the benefit of an ecosystem. So far it is difficult to really tell who will win in this ADAS paradigm, but the key to this will probably be the transition to the next AD paradigm. In one of our latest reports, “Sensor for robotic mobility 2020”, Yole Développement evaluated the possible total addressable market (TAM) of robotic MaaS in 2032 as between $100B and$ 200B. This is in line with the $160B envisioned by Mr Shashua. Indeed, these numbers are also enticing Tesla’s investors if they were to justify the company’s stratospheric valuation. Both companies are therefore accelerating the move toward MaaS while at the same time competitors such as Mercedes have scaled back their ambition in the realm of robotaxis. Making the transition from ADAS to AD will make them direct competitors to the robotic players such as Waymo. This player is using an exceptionally high-tech sensor suite, doubled with custom Intel SoCs usually intended for high performance computing complemented by Google Tensor Processing Units (TPUs) adapted to automotive applications. Fighting disruption is a difficult challenge. Kodak, IBM and Nokia are vivid examples that tech success is often momentary. With managers such as Elon and Amnon reaching superstar status, can they steer their companies any better? Only time will tell.

Pierre Cambou MSc, MBA, is a Principal analyst in the Photonic and Display Division at Yole Développement (Yole).
Pierre’s mission is dedicated to imaging related activities by providing market & technology analyses along with strategy consulting services to semiconductor companies.
He has been deeply involved in the design of early mobile camera modules and the introduction of 3D semiconductor approaches to CMOS Image Sensors (CIS). Pierre has a broad understanding of the various markets and technologies associated with CIS, having obtained 6 patents in this field and founded one startup company in 2012.
At Yole, Pierre is responsible for the CIS Quarterly Market Monitor while he has authored more than 15 Yole Market & Technology reports. Known as an expert in the imaging industry, he is regularly interviewed and quoted by leading international media.
Previously, Pierre held several positions at Thomson TCS, which became Atmel Grenoble (France) in 2001 and e2v Semiconductors (France) in 2006. In 2012, he founded Vence Innovation, later renamed Irlynx (France), to bring to market an infrared sensor technology for smart environments.
Pierre has an Engineering degree from Université de Technologie de Compiègne (France) and a Master of Science from Virginia Tech. (VA, USA). Pierre also graduated with an MBA from Grenoble Ecole de Management (France).

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