By: Aleksandra Conway Silina
Mobileye, an Intel subsidiary acquired in 2017 for $15.3 billion, develops chips, maps, and software for self-driving cars. Mobileye has filed for an initial public offering (“IPO”). Mobileye works with BMW, Nissan, Volkswagen, and other major car companies, developing its own fleet of autonomous vehicles for shipping and livery services. Intel’s entry into this market is a decision which will surely impact startups in the same field, as the emerging market quickly begins to take shape.
Founded in 1999, Mobileye is an emerging leader in the autonomous vehicles (“AV”) industry with revenues of $1.4B/year and losses of $75M. Despite the exponentially increasing demand for autonomous vehicles, progress has been delayed significantly due to technology, regulatory and customer acceptance issues. However, should the IPO succeed, it could be one of the biggest US offerings of 2022. Previously, the company WeRide (Chinese company which has it’s primary focus on self-driving vehicles technology) failed to succeed with their IPO. WeRide could file for a first-time share sale as soon as this September and aim for a listing as early as this year, but it has never followed through with its plan. A Crunchbase analysis of 14 companies developing technologies tied to self-driving vehicles that went public in the past couple of years shows an average post-debut decline of more than 80%.
Current US regulations do not help AV startups or already established companies to thrive. There are no AV regulations on a federal level; AV regulations presently come exclusively from the States. The AV industry will face a lot of issues if all 50 states implement unique legislation concerning the testing, certification, safety, design, and performance of autonomous vehicles. In the wake of the market meltdown over the first two months of 2022, which hit the Electric Vehicle (“EV”) industry particularly hard, investors are still eager to buy stocks that will profit from EVs and AVs. Moreover, in a world with an extremely strong social emphasis on environmentally friendly vehicles, it is extremely important for legislation to foster an environment which enables EAV (“Electric Autonomous Vehicle”) startups to thrive, which begins with successful IPOs. While Mobileye’s IPO will have a significant effect on the AV market based on the precedent it will set for smaller companies in the field, there are other issues requiring resolution. For AV developers to remain competitive with those from other countries while upholding strong safety standards, the U.S. regulatory framework must be updated with clear, comprehensive federal standards. For example, the Electric CARS Act of 2021 eases exemption processes, allowing AV developers more freedom in testing the technology and taking part in scaled deployment. Moreover, consumers are still concerned about the safety of AVs, and even as Mobileye finalizes the IPO, there might be hesitation coming from venture capitalists and smaller investors.
While the AV market is very promising, there are major issues to be resolved. Intel entering the market through Mobileye will not automatically resolve all the problems which AV startups are facing. The best way to address these issues head on is to draft AV regulations which are uniform at the national level.
Student Bio: Aleksandra Conway Silina is a second-year student at Suffolk University Law School. She is a staff writer on the Journal of High Technology Law. Aleksandra received her first law degree with a concentration in corporate and business law from Higher School of Economics in Russia.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
