bileye investors didn't see this one coming. The company behind autonomous driving technology used as part of Tesla's Autopilot system announcing Tuesday, the two won't be working together beyond their current relationship, sending shares of Mobileye plunging as much as 14%. Mobileye provides the hardware tips and software that allows vehicles to recognize people, other autos, lay markings, and traffic signs in order to avoid accidents.
The split comes at a time when Tesla's Autopilot is under scrutiny following a fatal accident involving a Tesla Model S in early May. Autopilot did not activate the brakes because it failed to recognize a white tractor trailer that turned in front of the vehicle. And just last week, Tesla CEO Elon Musk unveiled what he called a, quote, a master plan to build fully autonomous vehicles in the future.
But he's going down a different road than other developers by relying on cameras, radar, and ultrasonic sensors. Competitors, many of which are Mobileye customers, want to incorporate a different laser-based technology known as LIDAR, which is believed to be a more effective way to monitor road and traffic conditions around a vehicle.
And Mobileye's newer products will be able to gather and analyze LIDAR data. The split between Mobileye and Tesla could mean a new technology battle similar to the long forgotten ones. Think VHS between Betamax or Blu-Ray versus HD DVD. The big difference this time around is there are actual lives at stake.