Mobileye’s Revenue Forecast Falls Short Amid Stiff Competition in China
The autonomous driving technology leader, Mobileye, has announced a disappointing revenue forecast for fiscal 2025, citing intense competition from local players in China. The company expects revenue to range between $1.69 billion and $1.81 billion, significantly lower than the average analyst estimate of $1.94 billion.
Competition from Domestic Firms Heats Up
Mobileye’s shipments to China have been impacted by the rise of domestic firms developing similar self-driving software at lower costs. This trend is expected to continue, with the company’s major automotive customers struggling to maintain market share in the region. In fact, Mobileye revealed in December that its customers were losing ground to domestic manufacturers offering more affordable battery vehicles.
Government Incentives Boost EV Adoption
In an effort to encourage the adoption of environmentally friendly vehicles, the Chinese government has reintroduced some EV subsidies. While this move is expected to benefit the industry as a whole, it remains to be seen how it will impact Mobileye’s shipments in the region.
Q4 Revenue Beats Estimates, but Falls Short of Last Year’s Performance
Mobileye reported fourth-quarter revenue of $490 million, surpassing estimates of $477.8 million. However, this figure represents a 23% decline from the same period last year, due to reduced demand for its EyeQ chips as major customers work through excess supply.
Assisted Driving Tech Testing Shows Promise
Despite the current challenges, Mobileye remains optimistic about the future of its assisted driving technology. The company believes that testing with potential customers will yield positive results in 2025. Moreover, Mobileye does not foresee a trend where legacy automakers develop their own in-house driver assistance systems, given the current slowdown in EV demand.
Adjusted Earnings and Gross Profit Fall
On an adjusted basis, Mobileye earned 13 cents per share in the fourth quarter, beating estimates of 11 cents. However, the company reported a 30% decline in gross profit during the same period.
As Mobileye navigates the complexities of the autonomous driving market, it remains to be seen how the company will adapt to the changing landscape and regain its footing in the competitive Chinese market.
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