Vehicle safety regulations which will come into force in Europe in 2024 will create an upcoming windfall for a Canberra-based company selling its technology to global car manufacturers.
Seeing Machines, a public company listed on the London stock exchange which launched in the ACT 16 years ago and still has its headquarters in Canberra, has now reached what chief executive officer Paul McGlone described as an "inflection point" in its corporate growth and income.
With more than 90 per cent of road accidents caused by "human mistakes" according to the European safety authority EuroNCAP, from July 2024 under European General Safety Regulations all new cars sold in Europe will be required to have a camera which "watches" for signs of driver distraction, with an attention warning.
Many vehicles already use the technology, with the complex observation algorithms developed by Seeing Machines licensed to five separate Original Equipment Manufacturers (OEMs).
While the company cannot name these carmakers because of commercial-in-confidence agreements, they are understood to include Mercedes-Benz (which has had the tech in its premium S-Class for some years), Ford and General Motors.
Seeing Machines' eye-tracking technology is currently installed in 24 vehicle models and more than 447,000 new cars, the latest production volumes up by 246 per cent over 2021.
Regulatory change in Europe is accelerating the take-up rate and Mr McGlone said "this is going to increase by orders of magnitude more" in the years ahead.
Seeing Machines has spent around $300 million on its research and development, much of it into eye-tracking.
In its latest quarterly trading update, the cumulative automotive order book for Seeing Machines now stands at $395 million "with the majority expected to be recognised over the period to 2028".
Mr McGlone said by winning a tender with the giant Tier One parts suppliers to the auto industry in Europe, "it takes about three years to develop our software and integrate it into the vehicle before the vehicle's launched".
"For that we get what's known as engineering services revenue that's non-recurring," he said.
"But then, when it's launched, we get a royalty payment for every car in that model that is manufactured for the life of that model. And typically a model cycle runs six or seven years.
"So it's a very hard business to get into, but once you've been able to put up with the first five years of the engineering work - and there's not a lot of money in that work - there's some high margins which will flow through in royalties.
"From now on, as these cars we've been working on hit the road, we are going to see a far higher proportion of our revenue derived from royalties rather than NRE (non-recurring engineering)."
With car manufacturers across the world each trying to differentiate on features and technology, Seeing Machines' engineering programs under way now are aiming to provide "bespoke" features, such as three-dimensional imaging.
Semi-autonomous driving systems are also on the rise worldwide and also will demand driver monitoring systems. Seeing Machines is working on its tech to integrate seamlessly with these systems.
