Wells Fargo remains bullish on autonomous driving tech company, Mobileye Global Inc (NASDAQ:MBLY) with an Overweight rating and a 12-month price target of $50.00 on the stock after the company announced a strategic partnership with FAW Group.
Mobileye and FAW signed an agreement to use SuperVision in FAW's Hongqi brand. The two companies also reached an agreement to integrate Chauffeur, Mobileye's advanced hands-free and eyes-free technology, into FAW's E701 vehicle in the later half of 2025.
The official press release underscores that other FAW subsidiary brands will eventually adopt these cutting-edge systems. Notably, both SuperVision and Chauffeur will be powered by Mobileye's EyeQ6 System-on-Chips (SoCs). It's worth noting that Mobileye has not disclosed whether it will serve as a Tier 1 or Tier 2 supplier in this arrangement.
“We think the announcement of Chauffeur coming to the E701 in 2025 further substantiates Mobileye's ability to convert SuperVision wins to Chauffeur wins,” analysts wrote in a note.
“We think that autonomous vehicle features becoming more standardized as competition in the Chinese auto market intensifies will be a long-term positive for SuperVision + Chauffeur adoption.”
Based on data from S&P, FAW is projected to manufacture approximately 341,000 units of Hongqi vehicles in 2024, around 413,000 in 2025, and roughly 434,000 in 2026. In contrast, the total number of FAW units across all its brands during the same period is estimated to be 572,000 in 2024, 638,000 in 2025, and 635,000 in 2026. While SuperVision will initially be integrated into select Hongqi models, this achievement represents one of the largest wins for Mobileye's SuperVision technology up to this point.
Shares of MBLY are up 1.49% in early trading on Friday.