Reasons behind the split are still unknown at this point

Less than two weeks after Tesla CEO Elon Musk announced plans to increase its partnership with Mobileye, the two companies dropped a shocker when they announced that they would end their collaboration on advancing features tied into the electric car maker’s Autopilot system. The announcement was made by the Israel-based technology firm earlier this week, ending a successful partnership that allowed both companies to benefit from each other.

Neither Tesla nor Mobileye commented on who cut the cord on the partnership, although it is understood that Mobileye will continue to provide tech support in items related to its EyeQ3 processor, which Tesla uses on its Autopilot system. But moving forward, Mobileye will no longer be involved in the development of Tesla’s Autopilot system.

It’s unclear why this marriage ended so abruptly, but there are a number of possibilities. For one, Mobileye landed a separate deal with BMW earlier this month to provide the German automaker with new solutions to aid in its own development of autonomous driving technology. That partnership is reportedly centered on the collision detection specialist’s new EyeQ5 processor, which BMW is keen on putting into its models. BMW also signed a partnership with Intel to get access to the tech firm’s central processor units.

There has been no indication on Tesla’s part on how it plans to proceed with the development of its Autopilot system now that Mobileye won’t be a part of it. Musk did reiterate in his latest Tesla manifesto that the company was on the verge of making some advancements to the Autopilot system with an eye towards improving its functionality through radar and camera advancements. How Tesla plans to do that without Mobileye in the fold is going to the interesting development we’ll all be waiting for.

Continue after the jump to read the full story.

Why it matters

Like most people, this came as a legitimate surprise to me, but the more I thought about it, the more it became apparent that the end of Tesla and Mobileye’s partnership may have something to do with the recent run of crashes that have been tied into Tesla’s Autopilot system. I don’t know this for a fact, but I can’t help but wonder if the two are somehow connected. It is Mobileye’s system, after all, that’s a part of the Autopilot configuration so there could be something about these crashes and accidents involving the Autopilot that compelled either Tesla or Mobileye – maybe even both – to cut the cord on their business relationship.

Fortunately, I don’t think either of these two companies will suffer greatly now that they can’t lean on each other anymore. Tesla isn’t going to go away. It’ll still be the same forward-thinking company that’s driven by the relentless ambition of its founder and CEO. As for Mobileye, its partnership with BMW puts it in a good spot as it retains its presence within the auto industry. News of the split with Tesla may have caused its shares to tumble, but I don’t foresee that being the start of a decline. I believe the company when it says that the split won’t have an effect on its material earnings.

Then again, there is an elephant in the room here, one that’s big enough to cause major problems for both Tesla and Mobileye. That elephant is the controversy that Tesla’s Autopilot system has found itself in after multiple crashes have been reported of drivers crashing their cars while the system was engaged. U.S. regulators have begun their investigations on the matter. The National Transportation Safety Board, for example, has already submitted its preliminary findings of the Model S crash that killed a driver in Florida, citing that the driver was speeding to the tune of 74 mph in a 65-mph zone while the Autopilot system was engaged. If this controversy surrounding the Autopilot system explodes, there’s no telling what kind of fallout that’s going to have on Tesla and Mobileye. But that’s a big ‘if’ at this point and you can be sure that both companies will do everything in their powers to defend and protect their names.

Source: Wall Street Journal

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