Tesla, rivals joust over how to put self-driving cars on the road

Thu Oct 20, 2016 5:34pm EDT
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By Paul Lienert and Alexandria Sage

DETROIT/SAN FRANCISCO (Reuters) - Tesla Motors Inc's (TSLA.O: Quote) decision to equip all of its vehicles with self-driving hardware has intensified competition among rival camps of technology and auto companies over what equipment will be on board cars of the future.

Tesla's self-driving system will rely on cameras and radar sensors -- but not lidar, the laser imaging technology most other companies pursuing self-driving cars are using to generate precise pictures of the environment around their vehicles.

Tesla also is not using technology from Mobileye (MBLY.N: Quote), the Israeli-based supplier of computer vision chips and software that provided components for earlier Tesla models equipped with Autopilot, a semi-automated system designed to assist with driving but not replace the driver.

Tesla Chief Executive Elon Musk and Mobileye this summer engaged in a public dispute over the safety of Autopilot following a fatal crash in May in which the driver of a Tesla Model S was killed after hitting a truck while driving on Autopilot.

"Selling a vehicle with the latest and greatest hardware, but an unproven self-driving software package is a risky strategy," said Barclays analyst Brian Johnson.

On Thursday, investors appeared to be betting on Mobileye. Shares of the company rose 2.6 percent to $38.27, while Tesla shares fell 2.2 percent to $199.10.

Mobileye supplies two dozen other automakers and suppliers, and has formed alliances to pursue self-driving vehicle systems with German automaker BMW AG, U.S. supplier Delphi and chip maker Intel.

"As we move to a higher level of autonomy in vehicles, you're going to want to have more redundancy," which radar and lidar can provide, Dan Galves, senior vice president at vision safety system maker Mobileye, said in an interview. "The more sensors, the better."   Continued...

A Tesla logo is seen on media day at the Paris auto show, in Paris, France, September 30, 2016. REUTERS/Benoit Tessier/File Photo