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Instant Analysis: Tesla Motors, Inc. Is Sticking With Mobileye NV's Tech

What happened?

Mobileye stock took a hit this week when Bloomberg released a story about 26-year-old hacker George Hotz. The hacker is developing an autopilot system that will reportedly outperform Mobileye's -- the tech behind Tesla Motors ' autopilot system. But Tesla asserted on Thursday that the story isn't correct in its representation of itself or Mobileye.

The article by Ashlee Vance did not correctly represent Tesla or MobilEye. We think it is extremely unlikely that a single person or even a small company that lacks extensive engineering validation capability will be able to produce an autonomous driving system that can be deployed to production vehicles. It may work as a limited demo on a known stretch of road -- Tesla had such a system two years ago -- but then requires enormous resources to debug over millions of miles of widely differing roads....Going forward, we will continue to use the most advanced component technologies, such as MobilEye's vision chip, in our vehicles. Their part is the best in the world at what it does and that is why we use it.

Does it matter?

For Tesla, this is just market noise. All that matters for the electric-car maker is that it is remaining competitive in autopilot technology and the tech is preventing accidents. But for Mobileye it's definitely encouraging to hear Tesla isn't as ready to "discontinue" Mobileye's tech as the article seemed to suggest.

But Tesla's "correction" to the article wasn't entirely reaffirming. The car maker emphasized that Mobileye alone isn't the reason Tesla is able to offer such significant autopilot features, which include automatic steering at highway speeds.

"Tesla's autopilot system was designed and developed in-house," the company said in the post. Mobileye is just one aspect of Tesla's autopilot offering, the company explained.

It wouldn't hurt for investors to keep an eye on Hotz and his bold claims that his tech will outperform Mobileye's. Still, until Hotz can prove he can turn this technology into a business, the thesis for Mobileye likely remains unaffected.

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The article Instant Analysis: Tesla Motors, Inc. Is Sticking With Mobileye NV's Tech originally appeared on Fool.com.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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