Every new car sold in Europe now has to watch the driver's face. Two companies in the world can actually do it, Seeing Machines and Smart Eye, and they spent twenty years and hundreds of millions of dollars getting there. Hugo Navarro's argument (see his full write up here) is that the market has not repriced what happens next: a roughly 55 million dollar fixed cost base, automotive production going from 488,000 vehicles in Q4 2025 to 2.1 million in Q4 2026, and 20 to 40 million of free cash flow in fiscal 2027 against a 330 million market cap. If Japan and the US follow with their own mandates, close to every incremental dollar of revenue drops straight to free cash flow.
I push back hard in a few places. There is a 55 million dollar convertible due in October that this company has let get within two months of expiry, and my view is that no healthy business does that. Receivables are up 120% against 45% revenue growth. The fleet business, Guardian 3, is running trials that keep not converting, and "we are in a trucking recession" is the kind of management excuse I have learned to distrust. We also get into whether a new entrant can just build this now that the market is 16 million vehicles, why no tier one ever bought them, and whether full autonomy eventually kills the whole thesis.
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