Hidden within the dry financial details of Mobileye's Q1 2024 earnings call lies a potential bombshell: the emergence of "SuperVision Light," a strategy that could reshape the global autonomous vehicle (AV) landscape. While analysts buzzed about the inventory correction and Tesla's robotaxi ambitions, this subtle shift in Mobileye's approach to its core ADAS business may hold the key to unlocking even greater growth and potentially stifling China's aggressive in-house AV development efforts.

SuperVision Light, as described by CEO Amnon Shashua, bridges the gap between basic front-camera-only ADAS and the full-fledged SuperVision system. It leverages a five or six camera setup combined with five radars, delivering advanced functionality at a cost significantly lower than competing high-end systems. This positions SuperVision Light as a compelling next-generation base ADAS solution for mainstream car models, offering a level of performance previously unheard of in that segment.

Why SuperVision Light is Significant

Shashua highlighted the rapid growth of Chinese OEMs like BYD and Changan, acknowledging their aggressive pursuit of in-house AV development, often using expensive NVIDIA Orin chips. However, he pointed out key vulnerabilities in this approach: geographic and economic scalability. In-house systems struggle to expand from highways to complex urban environments due to the limitations of manually-created high-definition maps. Mobileye's REM (Road Experience Management) system, leveraging crowdsourced data, addresses this challenge, offering a cost-effective solution for urban autonomy.

SuperVision Light, with its advanced functionality and competitive pricing, could be the perfect weapon to undercut expensive in-house systems. By offering OEMs a compelling alternative that addresses both performance and cost concerns, Mobileye could slow down or even halt the momentum of China's in-house AV ambitions.

Historically, Mobileye has focused on providing incremental safety features with each chip generation, maintaining a consistent price point. SuperVision Light represents a departure from this strategy, creating a new tier within the base ADAS segment. This signifies a potential inflection point in ADAS adoption, where SuperVision Light could become the new standard for mainstream vehicles, driving ASP growth beyond the modest gains typically seen in the core ADAS business.

While SuperVision Light targets eyes-on functionality, its advanced sensor suite and software capabilities position it as a natural stepping stone to Mobileye's eyes-off Chauffeur system. OEMs adopting SuperVision Light today could be primed for a seamless transition to Chauffeur in the future, further solidifying Mobileye's dominance as the leading AV technology provider.

Hypothesizing the Impact

Assuming Mobileye captures even a 20% share of the global mainstream ADAS market with SuperVision Light by 2026, with an ASP of $200 (50% of competing high-end systems), this could translate to an additional $2 billion in annual revenue. This would significantly boost Mobileye's growth trajectory and potentially accelerate its profitability, given the expected higher gross margins of SuperVision Light compared to core ADAS.

Financial Data

Projected EyeQ Shipment Volume

The chart below represents the projected EyeQ shipments in millions of units for each quarter of 2024, illustrating the expected recovery from the inventory correction.

The Hidden Gem

Interestingly, Mobileye's global headquarters in Jerusalem, Israel, sits at the crossroads of three continents, reflecting the company's global reach and ambition. Just as Jerusalem has long been a hub of innovation and cultural exchange, Mobileye's SuperVision Light strategy could become a catalyst for a quiet revolution in the AV industry, bridging the gap between cost and performance and potentially reshaping the competitive landscape in the years to come.

"Fun Fact: Mobileye's REM technology has already mapped over 1 billion kilometers of roads worldwide, creating a rich and constantly updating dataset that fuels the company's autonomous driving solutions. This crowdsourced approach to mapping is a key differentiator for Mobileye, enabling rapid and cost-effective scalability in diverse geographic regions."