Baird Praises New Delphi-Mobileye Partnership

On Tuesday, Delphi Automotive PLC (NYSE: DLPH) and Mobileye NV (NYSE: MBLY) jointly announced that they had entered into a partnership to develop Level 4/5, full autonomous driving, for demonstration at CES 2017 and ready for production in 2019.

Baird’s David Leiker maintains an Outperform rating on both companies.

What The Partnership Means

“The combination of Delphi’s and Mobileye’s capabilities, in our opinion, forms one of the most formidable collections of technologies needed for self-driving cars,” Leiker stated.

Although some automotive OEMs are likely to pursue their own technologies, the analyst believes that a majority of the existing and new automotive manufacturers would choose a “turnkey” solution.

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“We have long viewed Delphi and Mobileye as the most technologically advanced and well-positioned auto suppliers bringing technologies for self-driving cars to market,” Leiker went on to say, while adding, “This partnership, in our opinion, solidifies their market leadership.”

Who Provides What

As part of the partnership, Delphi Automotive will contribute its sensor suite, automated driving software and multi-domain controller for the computing platform.

Mobileye will contribute its vision systems, real-time mapping of the surrounding environment and driver policy for the way the vehicle would react in real time to the surrounding environment.

“The intent is to “co-develop the market’s first turnkey Level 4/5 automated driving solution” that could accelerate the path to market and reduce the cost of deployment. This, again, appears to strengthen the “first mover advantage” previously exhibited by both companies,” Leiker explained.

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