Waiting for the Seeing Machines fanboys’ comments. Who’s the king of DMS?
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Let’s get a confirmation for Toyota from here
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Even in Seeingi, they like Smart’s Toyota launch 
Naughty
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From this, one could perhaps conclude that the 2.3bn SEK potential comes primarily from the EU area and globally with “modest assumptions”. More potential would be available later.
In the automotive industry, to my understanding, the track record has been such that other regions follow X years behind the EU / EU NCAP.
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When Martin talks about porting to SDV cars being easy, it makes me wonder if this would possibly also mean low capex/opex, and that porting it to other cars would be fast??!!
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This is indeed a huge deal, if this is the case, and why wouldn’t we believe it. The already communicated estimated and potential revenue would mean, with an average price of 10 euros and a seven-year sales cycle, well over three million Toyotas delivered annually. Martin commented earlier that the average DMS price is 5.5 euros. As a Tier 1 supplier, the license fee must naturally be higher than before. A few years ago, Martin communicated in a more informal setting that he assumed Toyota Design Wins would be distributed among several suppliers. This seems to be exceeding expectations. At the same time, the main competitor lowered its expected market share from 40 to 35. The independent market observer’s statement on the importance of traditional Tier 1 suppliers also aged poorly.
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You can go read reactions from the Seeing-boys’ home base if you want. I don’t really have the energy for it, but let’s take one that caught my eye 
It seems to have been quite quiet regarding the badmouthing of Smart since yesterday.
https://www.lse.co.uk/ShareChat.html?ShareTicker=SEE&share=Seeing-Machines
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This is mostly a matter of aesthetics, but at today’s EUR-SEK exchange rate (10.90), that 200M SEK deal would be 18.3M€, which, divided by seven years, would be about 2.6m€/year. (In reality, there’s a ramp-up and ramp-down, as well as a “peak point”).
With typical “basic-DMS” pricing, e.g., 5.5€/car, this would amount to 472k cars per year. This would be for two car models combined. (With a 6€ ASP, 435k cars per year).
A quick look at the sales of Toyota’s most popular models shows that they sell at a rate of around 200k units/year in Europe.
In my opinion, the situation aligns well (volumes and ASP) with the fact that a couple of popular car models have come to Europe in terms of DMS wins. This bodes well for the future, as it is very likely that many more will follow due to the SW Tier-1 approach. I believe the probability is even higher than through a “traditional tier-1”.
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This still seems cheap compared to the license fee pipeline that will materialize in the near future. The reason is likely on the risk side. What are your thoughts on the company’s risks? At least the following:
- Is the cash sufficient, or will further dilution be necessary? (A key short-term driver for the stock)
- Automotive industry outlook and supply chain, incl. Trump’s tariffs & trade war, escalation of the Taiwan situation
- Will Tesla and Chinese car manufacturers crush Smart’s traditional OEM customers? Smart won some China DWs back in the day, but I’m not sure about the overall picture of Chinese manufacturers.
- How short will the DMS era be? I am skeptical about how quickly SAE level 5 cars will be on the road in significant numbers, but it is, in any case, a transitional technology. This is why interior sensing investments (this seems to be in good shape compared to competitors)
- My own speculation: The USA is unlikely to follow Europe’s DMS regulation footsteps in the near future. Musk has publicly stated that DMS technology makes no sense, and Trump is also generally not a big fan of regulation. Elsewhere in the world, the necessity of a wave of deregulation is currently being widely considered; should we follow the US so as not to fall behind in economic development?
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Mainly concerning cash.
Cash position as of 31.12.2024:
Cash and cash equivalents totaled SEK 22.4 million at the end of December. The cash ending balance, including credit facilities, amounted to SEK 229.7 million.
And this is what Martin says in that review:
For 2025 we have our gaze set on reaching positive EBITDA as soon as possible, with positive cash flow following suite.
I recall Martin stating that it takes a quarter or two after achieving positive EBITDA for cash flow to follow suit.
EBIT for the entire last year was -250 M SEK. However, the company has communicated that, for example, AIS has brought opportunities to the company and has tied up capital. And on the other hand, the ramp-up of many car models has now been prepared. In addition, Q4/24 development was promising, which I, at least, expect to continue in 2025 as well.
And this is what RedEye expects.
If everything goes as expected, I would say that the cash will be sufficient before cash flow turns positive.
Trump’s tariffs will likely have an impact, as GM, for example, is known to be a significant customer. Can the company optimize production? It’s unlikely to escape tariffs very effectively. But at the same time, it must be remembered that revenue growth is essential in this case, as fixed costs do not rise significantly, and the company’s Gross profit is very high, meaning the product-specific margin is very high.
I personally don’t believe Tesla poses a particularly significant risk. Tesla’s car sales, at least in my calculations, won’t grow from this point. Well, the Chinese are a risk, given their different playbook. But somehow, I believe that in this case, Europe and the USA will ensure that their own automotive industry continues to exist in the future.
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It’s probably Toyota, but in my opinion, “another” in this context would translate more to “one more” than “the second”. So not “to the second of the world’s largest manufacturers” but “to one more of the world’s large car manufacturers”. If before this deal Smart Eye supplied N number of the world’s largest car manufacturers, after this, it will supply N+1.
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Smart Eye sent out a notice of the annual general meeting with its agenda. Two new members to the board, whose expertise is more in the technology industry and artificial intelligence than in the automotive industry. Expertise is also found in financial technology.
Maria Hedengren
Andreas Anyuru
A three-stage option program will be introduced for Smart Eye’s (SEYE) management and key personnel. The conditions for the program for the fiscal year 2027 are revenue over SEK 800 million, EBIT over 12.5%, and market share outside China over 40%. Dilution can be a maximum of 1.7%. Redeye forecasts Smart Eye’s revenue for fiscal year 2027 to be almost SEK 1.2 billion and EBIT to be 36.5%, so hopefully they will receive their options with a good margin.
Redeye previewed Q1 results and, as is traditional, revised license revenues downwards, citing weak EV sales in the USA.
I am perhaps a bit more optimistic about this. Quite a few electric cars with Smart Eye only entered production in the past quarter. However, the largest part of Smart Eye’s US growth came from the internal combustion engine Cadillac Escalade and possibly other large GM SUVs that went on sale during the quarter. I estimate that GM sold 60,000 Smart Eye cars during the quarter, of which over 50,000 were in the USA.
https://investor.gm.com/static-files/ed98ecfc-6bd6-4b53-99a6-24c4c6e42f0d
For the Hyundai Group, I get Smart Eye sales of approximately 180,000 - 190,000. I estimated for Q4/24 that a total of slightly over 200,000 Smart Eye cars were sold, and now we could reach just under 300,000, which would mean over 40% growth. However, these are sometimes difficult to estimate, and the figures are inherently incorrect, as payment revenues are based on production volumes, and my figures are sales volumes. Outside of Hyundai and GM, things are starting slowly, but around 50,000 licenses could be possible for other manufacturers. The US market share is almost half, so events there will definitely need to be monitored. Hyundai announced that it will, for now, act in accordance with Trump’s wishes and will not pass tariffs on to prices.
https://www.autoweek.com/news/a64406693/hyundai-tariffs-car-msrp-dealers/
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This is likely related to Toyota’s win; more wins are quite certain to come
also RE comments on the incentive program
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The annual report was released, and traditionally the most important part is the CEO’s review. Let’s put it here as a screenshot. There is a lot of other useful information as well…
XX & XXX
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Three new Interior Sensing DWs from a major Korean car manufacturer. Production of the car models is expected to start next year.
Smart Eye has been selected to deliver its Automotive Interior Sensing AI software, combining Driver Monitoring System (DMS) and Cabin Monitoring System (CMS) functionalities, to three new car models. The estimated revenue of the order is SEK 75 million based on estimated product life cycle projections.**
Gothenburg, Sweden – April 16, 2025 – Smart Eye, a leading developer of Driver Monitoring (DMS) and Interior Sensing software for the automotive industry, today announced it will supply its Interior Sensing technology to three new vehicle models by a major Korean car manufacturer with a global manufacturing footprint.
This customer has previously implemented Smart Eye’s Interior Sensing AI across multiple models and has now chosen to extend the technology’s combined DMS and CMS to additional models.
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Can’t really give a thumbs up to this.
But fortunately, Smart’s current result is so small, and growth should be remarkably strong despite the situation in the US, as models go into production and legislation also kicks in in Europe. I wouldn’t be too worried, although this might dull its sharpest edge.
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“No indications of a weaker market”
The US tariffs have not yet deterred car manufacturers and caused them to cut back on production, according to Autoliv CEO Mikael Bratt, who has managed to pass on the higher costs to customers.
“We have no indications of a weaker market in the near future,” he says.
Throughout March, the company had to deal with additional tariffs of 25 percent on several products, before Donald Trump introduced his 90-day tariff break in early April. Mikael Bratt notes that the tariffs are a new factor that the automotive industry needs to deal with.
“We still don’t know the long-term nature and extent of this. Right now, there is some hesitation in some quarters about bringing cars into Mexico, but production levels still seem to be holding up,” he says.
No major tariff effects have been seen during the first weeks of April, with customer orders continuing to remain at a good level. Mikael Bratt believes that it is not a matter of customers ordering more components than usual in anticipation of future tariff increases.
“We have no indications of a weaker market in the near future,” he states.
Has Koli’s fan club been seen?
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Extra shifts at VW in Wolfsburg
As of: 17.04.2025 14:47
Volkswagen has been making headlines recently with rather gloomy news. However, additional shifts have now been agreed upon at the main plant in Wolfsburg.
Europe’s largest automaker, Volkswagen, is implementing extra shifts at its main plant in Wolfsburg due to strong demand. All four assembly lines are affected, a company spokeswoman announced on Thursday, confirming a report in the Wolfsburger Nachrichten . Management and the works council have agreed to additional work until the plant holidays in July.
Volkswagen builds the best-selling Tiguan, the Golf, the Touran, and the seven-seat Tayron in Wolfsburg. It also produces parts such as the tailgates for the ID.3. Extra shifts are also being added here.
Stronger demand in Western Europe
The company says it is currently benefiting from strong demand for its vehicles. When presenting the first-quarter sales figures, Sales Director Marco Schubert said that orders in Western Europe increased by 29 percent during the period.
The car manufacturer also expects tailwind in the coming months from numerous newly introduced models.
Hoping for new models
The company recently made headlines for its drastic cost-cutting program. 35,000 jobs are to be cut by 2030. The automaker also refused to rule out plant closures last year, but these are currently off the table.
Last year, the company sold significantly fewer cars than before . Its Asian business, which has long been its core business, is weakening. The company is now trying to tap into new markets – including a new, affordable electric car for under €20,000.
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Was it that the VW is being checked? And signs.
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