The Chinese car market, the world's largest and a crucial battleground for industry players, is currently experiencing significant turbulence. On one side, a slowing local economy is dampening consumer spending, with vehicle sales in China dropping by about 3% in June. On the other, the intensifying trade war between China and the United States, as well as Europe, is beginning to hamper exports. Among the companies hit hardest by these developments is Israel's Mobileye.
Once the Israeli company with the highest market value, Mobileye's stock has plummeted by 67% since the start of the year, sinking to a value of $11.5 billion—below the $15 billion Intel paid for it in 2017. This sharp decline is largely attributed to the upheaval in the Chinese car market. Mobileye, founded by Prof. Amnon Shashua and Ziv Aviram, is a trailblazer in autonomous vehicle technology, supplying systems that make near-autonomous driving possible today. Its main customers are car manufacturers and Tier 1 suppliers.
Since late 2023, the company has faced a steep decline in business performance, not due to the war in Israel, but primarily because of challenges in China. Mobileye has repeatedly lowered its forecasts, and now expects to close 2024 with revenues of just $1.6 billion—around $1 billion less than the initial forecast of $2.6-$2.9 billion. This significant shortfall marks an unusual and profound setback for such an established public company.
In recent years, Mobileye has become increasingly reliant on the Chinese market, a dependency that once fueled its rapid growth thanks to contracts with prestigious brands like Zeekr and Polestar. However, this growth has stalled dramatically. In the first half of 2023, China saw a 100% increase in the supply of vehicles equipped with Mobileye's advanced driver assistance systems (ADAS). Yet in the first half of this year, Mobileye's revenues from China fell sharply, from $269 million to $199 million, highlighting the severe impact of the market's current instability.
* Calcalist contributed to this article.