Mobileye, Tesla to part ways

The company behind Tesla's collision-avoidance technology says it will not extend its contract with the automaker.

The company Mobileye, which produces vision-based collision avoidance camera systems, announced Tuesday that it plans to part ways with automaker Tesla.

The company does not plan to extend its contract beyond the EyeQ3 processor, executives said on Mobileye's earnings conference call. "We think that that's not in the interest of Mobileye to continue with Tesla in that area," said CTO Amnon Shashua, Bloomberg reports.

Mobileye's technology helps power Tesla's Autopilot feature, which has come under scrutiny since a fatal crash that occurred in a Telsa Model S in which Autopilot was engaged.

The decision to end its contract with Tesla before the automaker launches a fully autonomous vehicle was motivated in part to protect Mobileye's reputation, Shashua suggested.

"There is much at stake here, to Mobileye's reputation and to the industry at large," Shashua reportedly said. "We think that that's not in the interest of Mobileye to continue with Tesla in that area."

In a statement, Tesla CEO Elon Musk said that the break from Mobileye was expected and "will not have any material effect on our plans."

"MobilEye's ability to evolve its technology is unfortunately negatively affected by having to support hundreds of models from legacy auto companies, resulting in a very high engineering drag coefficient," he said. "Tesla is laser-focused on achieving full self-driving capability on one integrated platform with an order of magnitude greater safety than the average manually driven car."

Musk recently laid out his master plan for his company, stressing that autonomous vehicles can make roads safer. "Once we get to the point where Autopilot is approximately 10 times safer than the US vehicle average, the beta label will be removed," he wrote.

While Mobileye will no longer work with Tesla, the company recently announced it is teaming up with Intel and BMW to roll out an autonomous car by 2021. Mobileye also already supplies collision-avoidance technology for other automakers like Nissan and GM. While the company has a foothold in US and European markets, it also said recently that it expects its sales in China to grow "exponentially."