Mobileye, an automotive technology company, reported a 16% increase in revenue compared to the same time period in the previous year. In spite of this, the company has lowered its forecast for 2023 as a result of escalating economic challenges in the market and a subsequent decline in sales of the SuperVision autonomous driving system.

The company now expects revenue of $2.065 billion to $2.114 billion, down 6.5% from the previous forecast published in January. The operating loss will reach $166-195 million, compared to a previous forecast for an operating loss of $110-160 million.

The company attributed the reduction in the forecast to an adverse impact on the electric car market in China, including sharp price reductions, reduced government subsidies, and general economic weakness. However, in recent weeks, there has been an improvement in the volume of orders from its main customer in the field, Geely, which prompted the mid-term updated forecast reflecting an 11.8% growth in Mobileye’s revenues this year compared to 2022.

Following the lowering of the annual forecast, the share price dropped more than 20% during the trading today’s session in Wall Street, almost wiping out its gains for 2023. 

In the first quarter of the year, the company recorded revenues of $458 million, a 16% growth compared to the corresponding quarter. It supplied 8.1 million systems at an average price of $53.9 per unit, an increase compared to the average price of $51 in the corresponding quarter. Mobileye generated $171 million from current operations during the quarter and had a hefty cash balance of $1.16 billion at the end of the quarter.

According to Mobileye’s co-founder, Prof. Amnon Shashua, the company performed well in Q1, including 16% growth in revenue. He expects that new launches of SuperVision in the near future will lead to diversification in customers and regions and create momentum. Shashua said that Mobileye is reducing its delivery forecast for SuperVision due to the decline in demand for electric vehicles in China, but he sees this as a temporary issue that will not affect the potential of the business to accelerate revenue and profit growth.