Mobileye Ends Partnership With Tesla

Mobileye NV said it would no longer provide its computer chips and algorithms to Tesla after a current contract ends due to disagreements about how the technology was deployed. Mobileye provides core technology for Tesla’s Autopilot system, which allows cars to drive themselves in limited conditions.

It isn’t clear when Mobileye’s current contract with Tesla ends; a next generation Mobileye system—called the EyeQ4—comes out in 2018 and is expected to improve its ability to detect certain objects.

The friction between Mobileye and Tesla reflects emerging tension between developers of cutting-edge auto technology and car makers over who owns or directs development of their technology.

Tesla Chief Executive Elon Musk said in an email the split wouldn’t affect its development of more-advanced versions of Autopilot system, which is installed in its Model S sedans and Model X sport-utility vehicles. “This was expected and will not have any material effect on our plans,” he wrote.

“Mobileye’s ability to evolve its technology is unfortunately negatively affected by having to support hundreds of models from legacy auto companies, resulting in a very high engineering drag coefficient,” Mr. Musk said, using a term describing turbulence.

The Israeli company has agreements to supply camera-based driver-assistance systems to more than a dozen auto makers, but its relationship with Tesla helped bring it to the attention of auto analysts and Wall Street. General Motors Co., Nissan Motor Co., BMW AG and Hyundai Motor account for more than 60% of Mobileye’s sales.

The supplier recently announced a partnership with BMW and Intel Corp. to design a system for fully autonomous vehicles by 2021.

Mobileye has contracts to ship systems that allow for full autonomy to two auto makers by 2019, but hasn’t named the companies.

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