Weekly Brief: Intel takes risky bet on the connected car

With its purchase of Mobileye, Intel proves it will pay anything to ensure a central role in the connected car frenzy. Andrew Tolve reports.

Intel staked its claim to the largest ever acquisition in the connected car area with its $15.3Bn (£12.3Bn) acquisition of Mobileye last week. It's a whopper of a deal with a whiff of desperation to it. Intel is famous for missing the boat on the smartphone revolution and is dead set on history not repeating itself with the connected car – even if that means overpaying for an automotive chipmaker, as many analysts believe that Intel has done with its Mobileye offer. Intel is paying 42 times more than Mobileye's 2016 sales.

The deal would move Intel's automotive division to Israel, where Mobileye is headquartered, and will shift its core competency to advanced driver assistance systems, where Mobileye leads the market. It also sets up an immediate clash for top automotive chipmaker with the likes of NVIDIA and Qualcomm. Intel justified the big price tag by pointing to the fact that autonomous vehicles are anticipated to represent a $70Bn market by 2030 and that, with Mobileye under its umbrella, Intel could reap $30Bn in chip sales in the coming decade.

In other news, Donald Trump cast a pall over the electric vehicle (EV) market when he announced that the Environmental Protection Agency (EPA) will begin a review of Obama’s fuel-emissions standards, whose stringency pushed automakers to invest in EVs. Many automakers made those investments against their inclinations, maintaining that consumers don’t want EVs especially with fuel prices so low and the popularity of SUVs and pickup trucks at record highs. Indeed, automakers requested that Trump order a full review and last week he obliged. To be clear, Trump announcing that the EPA will review tailpipe emissions standards does not guarantee that those standards will change. To be continued.

Teslaraised $1.2Bn to help fund the manufacturing of its new Model 3. The Model 3 is set at a price point of $35,000 and is the mass market vehicle the Tesla believes will bring luxury EVs into the mainstream and will, finally, make Tesla a profitable company. Tesla already has 400,000 pre-order customers lined up to receive the sedan when it trundles off the factory floor. Delivery date is expected in late 2017 or early 2018. The company raised the money by selling a mix of common stock and convertible debt.

General Motors (GM) became the first carmaker to make vehicle-to-vehicle (V2V) communications standard in a consumer car. It’s the 2017 Cadillac CTS and it now comes with dedicated short-range communications that allow it to talk to sibling Cadillac CTS cars. For example, if one car slams on its brakes, a little warning that says, ‘Caution Hard Braking Ahead!’, will pop up on the dashboard of any CTS trailing behind. GM decided to make the technology standard rather than elective so that there are enough cars on the road with the tech to make it useful. It will cost customers about $300 per vehicle.

It was a busy week in navigation. First, Alibaba led an $18M Series B investment round in WayRay, a Swiss start-up that specialises in holographic navigation systems. WayRay says it plans to use the funds to push its first augmented reality heads-up display, WayRay Navion, out to market. SAIC Motors has committed to integrating Navion into one of its models in 2018. SAIC is the same company that built Alibaba’s so-called ‘Internet Car’ that debuted last year in China.

Uberjumped into the navigation game with its own mapping app for its drivers. To date, Uber drivers have had to cobble together navigation services via a patchwork of apps like Google Maps and Waze. Now they will have their own dedicated Uber Maps app that is designed specifically for picking up passengers and dropping them off in the most streamlined way.

Finally, Waze and Spotify announced a partnership to make it easier for drivers to listen to music and follow navigation at the same time. If you’ve got Waze open, you now can control your Spotify playlists and selections within the Waze interface. If you’re in Spotify, a bar will pop up at the top delivering your upcoming navigation directions. Also, the partnership will eliminate that infuriating Bluetooth tick where your music dies out every time your navigation has a route update or a verbal instruction.

The Weekly Brief is a round-up of the week’s top telematics news, combining TU-Automotive analysis with information from industry sources.

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