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What Autopilot 2.0 Means For Mobileye

What Autopilot 2.0 Means For Mobileye NYSE: MBLYNASDAQ: TSLA NASDAQ: NVDA

Elon Musk announced last week that Tesla Motors Inc TSLA 0.74% plans to release a new product on October 17. A report has suggested that Tesla is working on creating its own "Tesla Vision" software through Nvidia Corporation NVDA 2.09% CUDA parallel computing platform and API.

This has created speculation that Tesla's announcement will revolve around the company's controversial Autopilot feature that has been partially responsible for several crashes worldwide.

The announcement is expected to be a release of Autopilot 2.0, which according to Deutsche Bank will include "more advanced hardware and eventual upgradability to more advanced autonomous driving capability once Tesla develops the software."

Related Link: 3 Key Thoughts Heading Into Tesla's Unveiling: SolarCity, Safety And Shared Autonomy

Mobileye NV MBLY 3.23%, maker of the EyeQ3 chip used by Tesla's original autopilot feature, will reportedly not be involved in Autopilot 2.0. This should have minimal impact on the company, however, due to its $4 million in revenue per year figure that it received from Tesla.

Deutsche Bank did pose the question that Tesla's new development effort may suggest it's easier than once perceived, and in turn "implies a more challenging competitive environment" for Mobileye. The analysts believe Mobileye will disclose details of their agreement with Volkswagen within the next few weeks and could serve as a catalyst for other deals in the future.

Deutsche Bank has a Buy rating on Mobileye with a $72 price target.

Sep 2016SunTrust Robinson HumphreyInitiates Coverage onBuy
Jul 2016DoughertyUpgradesNeutralBuy
Jul 2016JP MorganInitiates Coverage onNeutral

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