Mobileye have announced that they will stop the collaboration with Tesla (TSLA) from October 2016 and focus instead on their collaboration with BMW and Intel (INTC) to develop a fully autonomous car by 2016.
This is a set-back for Tesla. Mobileye's technology is a key element for Tesla's autopilot system. We can only speculate if the recent fatal accident of a Tesla Model S, when a crossing vehicle wasn't detected by the autopilot, contributed to Mobileye's decision. Mobileye says that their new chip called "Eye4Q", expected for 2018, will be able to detect vehicles crossing lanes. Mobileye are also collaborating with Volkswagen and General Motors.
This news is another, albeit small, confirmation of BMW's strategy to develop new mobility concepts. With Daimler and Audi they acquired the mapping service Here. With Toyota BMW are collaborating in the area of hydrogen-powered fuel cells. With Mobileye and Intel BMW are collaborating on developing an autonomous car by 2016, most likely a new model under their i-series of cars. In combination this paints a promising picture for BMW: They continue to be willing to take risks to innovate.
We remain optimistic about BMW's future. They are a well-managed company in our view and we like their brand management across BMW, Mini and Rolls-Royce. We believe that they are in a good position to fend off companies like Tesla. This includes Apple (AAPL) and Google (GOOG) who are working on electric and/or autonomous cars as well. BMW have increased their dividend in each year since 2009. In contrast to other companies in the automotive sector, they continued paying a dividend even during the global financial crisis (GFC). Based on estimated earnings for 2016, BMW has a fairly low price tag at 7.75 for the price/earning ratio.
This is a set-back for Tesla. Mobileye's technology is a key element for Tesla's autopilot system. We can only speculate if the recent fatal accident of a Tesla Model S, when a crossing vehicle wasn't detected by the autopilot, contributed to Mobileye's decision. Mobileye says that their new chip called "Eye4Q", expected for 2018, will be able to detect vehicles crossing lanes. Mobileye are also collaborating with Volkswagen and General Motors.
This news is another, albeit small, confirmation of BMW's strategy to develop new mobility concepts. With Daimler and Audi they acquired the mapping service Here. With Toyota BMW are collaborating in the area of hydrogen-powered fuel cells. With Mobileye and Intel BMW are collaborating on developing an autonomous car by 2016, most likely a new model under their i-series of cars. In combination this paints a promising picture for BMW: They continue to be willing to take risks to innovate.
We remain optimistic about BMW's future. They are a well-managed company in our view and we like their brand management across BMW, Mini and Rolls-Royce. We believe that they are in a good position to fend off companies like Tesla. This includes Apple (AAPL) and Google (GOOG) who are working on electric and/or autonomous cars as well. BMW have increased their dividend in each year since 2009. In contrast to other companies in the automotive sector, they continued paying a dividend even during the global financial crisis (GFC). Based on estimated earnings for 2016, BMW has a fairly low price tag at 7.75 for the price/earning ratio.
Disclosures
- We have owned BMW shares for over 10 years and intend to buy more once the downward trend ends that started in early 2015
- We have owned Toyota shares for over 10 years and have no plans to buy or sell in the next 48 hours
- We own Apple shares but have no plans to buy or sell in the next 48 hours
- We have no shares in any of the other companies mentioned in this post and we have no plan to buy in the next 48 hours
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