Shares of self-driving technology company Mobileye (MBLY 8.65%) were on the rise on Tuesday, up as much as 13.6%, before settling into a 8% gain as of 2:54 p.m. ET.
Mobileye announced an upgraded collaboration with key customer Volkswagen (VWAGY 0.45%), which will implement Mobileye's new Surround ADAS (advanced driver-assistance system) into Volkswagen's MBQ modular vehicle platform for future self-driving use cases.
Volkswagen is the second-largest automaker in the world, so the new announcement could perhaps signal the beginning of a recovery for Mobileye after a tough year.
Volkswagen has long been a Mobileye customer, but on Tuesday, Volkswagen and Mobileye put out a joint press release describing a new partnership to upgrade Volkswagen's self-driving capabilities in its mass-market vehicles.
The partnership also includes self-driving company Valeo, which will be providing sensors and the electronic control unit (ECU). These will integrate with Mobileye's EyeQ6 processor, mapping technologies, and the new Surround ADAS software platform. Volkswagen will be integrating the new technologies to enable Level 2+ self-driving on highways, along with other tech-forward driving features such as traffic jam assist, hazard detection, parking assist, driver monitoring, and 360-degree emergency assist.
Importantly, the new integrated system will be a part of the MBQ system, which is the architecture Volkswagen uses for multiple high-volume models. So, Mobileye stands to perhaps benefit from lots of volume as a result of the Surround system adoption.
In conjunction with the Volkswagen announcement, Mobileye also published a blog post about Surround ADAS. Surround will integrate advanced features for easier and more intuitive autonomy within lower-priced high-volume vehicles, while Mobileye's SuperVision remains its premium offering for high-end vehicles looking to make the transition to "eyes-off" autonomy.
Mobileye just closed out a tough year in which revenue fell 20%, as higher interest rates and economic uncertainty weighed on much of the auto sector. Management does forecast a return to growth in 2025, with the midpoint of 2025 revenue guidance at $1.75 billion. That would mark about 6% growth over 2024, though still well below to $2.08 billion Mobileye made in 2023.
That was the projection back in January, at least. Investors will have to see if management ups its outlook in light of the new enhanced VW partnership later in April, when Mobileye reports Q1 earnings.
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