Lidar, where do we go from here?

Recently, Mobileye released a statement: "After reviewing the technological roadmap, it has decided to abandon the development of the next-generation FMCW LiDAR." Mobileye's decision has sparked heated discussions. For streamlining the LiDAR business, Mobileye attributed it to three reasons: 1. The new generation of products based on Mobileye's visual perception capabilities are stronger. 2. The clarity of the imaging radar developed internally by Mobileye has been further improved. 3. The cost reduction effect of third-party supplier ToF LiDAR is better than expected. In addition to technical reasons, the competitive situation in the LiDAR market, Mobileye's recent underperformance, and changes in its relationship with Intel Corporation are also worth pondering. Behind the surface, Mobileye's decision to give up in-house LiDAR development seems more like a reluctant choice amidst internal and external challenges. Looking back, in August 2021, Waymo stopped its commercial LiDAR business; in October 2022, Ibeo announced bankruptcy; in November, two major listed companies Velodyne and Ouster merged; in December Quanergy declared bankruptcy; in September 2023, Bosch abandoned the development of autonomous driving LiDAR... The continuous "bad news" in the LiDAR industry seems to paint a worrisome picture for its future. However, from another perspective, the automotive LiDAR industry is currently experiencing unprecedented development opportunities. According to the latest report released by Yole Group, with the rapid development of autonomous driving technology and the gradual penetration of functions such as NOA and AEB, the global automotive LiDAR market will be valued at $5.38 billion in 2023. It is projected to grow to $36.32 billion by 2029, with a high compound annual growth rate (CAGR) of 38% from 2023 to 2029. Behind these two trends, what kind of changes is the LiDAR industry experiencing? With price wars, marketing battles, and fierce competition, how can industry players break free and find their long-term strategies? In the intense battleground of the LiDAR race, who will secure a ticket to the new era? Domestic LiDAR players in China are rising rapidly. LiDAR (Light Detection and Ranging) is a sensor that uses laser beams to calculate the distance to the target surface. It emits a laser beam towards the target, receives the reflected signal, measures the time it takes for the laser beam to travel back and forth, and calculates the distance, speed, and position information of the target. LiDAR detection offers advantages such as high accuracy, strong anti-interference capabilities, wide measurement range, and fast measurement speed. With the increasing popularity of the intelligent driving industry, LiDAR technology and costs are continuously evolving, making them a key component of autonomous driving and advanced driver assistance systems. According to incomplete statistics, in 2023, over 20 new car models in China will be equipped with LiDAR; by 2024, foreign brands such as BMW, Mercedes-Benz, and Volvo will also join the trend of equipping cars with LiDAR. The rapid adoption of LiDAR in vehicles has driven a significant increase in shipments. According to the High Intelligence Automotive Research Institute, a total of 570,900 front-loaded LiDARs for passenger cars were delivered in the Chinese market in 2023, representing a year-on-year growth of 341.19%. In 2024, the total delivery is expected to reach 1.5-1.8 million units, indicating the industry's accelerated growth. With the market potential in mind, looking back at the current domestic market, LiDAR, as a key component of smart vehicles, is widely accepted by consumers. In 2022, major players in the LiDAR market included Innovusion, Valeo, Hesai Group Sponsored ADR, and RoboSense. Just a year later, foreign LiDAR manufacturers are gradually fading, while domestic manufacturers are rising rapidly. With intense market competition, some overseas LiDAR manufacturers are facing decline. In 2022, former global LiDAR giants Velodyne and Ouster confirmed their merger, while Ibeo and Quanergy consecutively announced bankruptcy. Meanwhile, driven by policy support and market demand, domestic LiDAR manufacturers are rapidly developing, with leading companies including Hesai Group Sponsored ADR, Livox, and others. Accompanied by the rapid development of China's intelligent driving industry, top domestic manufacturers are expanding their presence, highlighting their product performance and price advantages, leading to a continuous increase in the global market share of domestic automotive LiDAR. Yole Group's report on "2024 Automotive LiDAR" points out that the market space and market share of suppliers in the automotive LiDAR industry are changing. In 2023, Chinese manufacturers are leading the global automotive LiDAR market, with Chinese LiDAR suppliers such as Hesai Group Sponsored ADR (HSAI.US), RoboSense, Innovusion, Huawei, and Livox collectively holding 84% of the market share. Chinese LiDAR manufacturers began to enter the market around 2016. With the continuous updating of LiDAR technology architecture, from single-point scanning to multi-line scanning, and from complex mechanical to semi-solid and solid-state evolution, LiDAR technology is gradually transitioning to chip-based and array-based development. The penetration rate of LiDAR installations by domestic and foreign enterprises is completely different. While the decline of overseas LiDAR suppliers, the penetration rate of domestic LiDAR manufacturers continues to increase. According to the data from Gaishi Automotive Research Institute, Chinese LiDAR suppliers installed over 445,000 units in the first five months of this year. RoboSense ranks first with a 43% market share; Huawei Technology occupies 22.8% market share; Hesai Group Sponsored ADR has an 18.7% market share; Innovusion holds 15.1% market share, placing it fourth. Not only in the Chinese market, but foreign LiDAR companies are also losing their grip.Hold a favorable position in the laser radar market.In the past two years, international suppliers have been withdrawing from self-developed lidar. In 2023, German automotive giant Bosch completely abandoned the development of autonomous driving lidar; Continental Group invested in the American lidar company AEye in California in 2020, and the two collaborated to develop long-range lidar products. However, they terminated the cooperation at the end of 2023. ZF has also exited the lidar market, and Japanese Hangzhou Innover Technology Pioneer has also given up. In addition, the veteran giant Velodyne once dominated 95% of the lidar supply in North America, becoming the preferred choice for domestic and foreign smart driving suppliers. However, the rapid advancement of domestic lidar manufacturers has put the "Velodynes" in a disadvantageous zero-sum game. With each step forward and backward, overseas manufacturers are losing their rhythm and suffering losses. Currently, there are only a few international giants still advancing in the lidar industry, such as Valeo. With its Scala 3 LiDAR, Valeo is one of the best suppliers in the non-Chinese lidar field. However, Valeo's lidar sales are mainly outside of China. With the growth of the Chinese lidar market, Valeo's market share may continue to decline. Overseas, companies like Hesai Group Sponsored ADR, ROBOSENSE, and Hesai Group Sponsored ADR have captured market share, and foreign lidar suppliers may not be more competitive than domestic companies. This can be confirmed by the actions of overseas car manufacturers: for example, ROBOSENSE has entered Toyota's supply chain system and established mass production cooperation relationships with some vehicle models; Hesai Group Sponsored ADR has also received recognition from top international brands such as Audi, General Motors, and Ford and has reached mass production cooperation agreements with its Chinese joint venture hosts. New cooperative models will start mass production in 2025. Amidst the challenges faced by overseas giants in the lidar industry, it is domestic companies like Hesai Group Sponsored ADR and ROBOSENSE that are reaping the benefits. Hesai Group Sponsored ADR continues to lead the market with a 37% market share, although it has declined by 9 percentage points compared to 2022. In the autonomous taxi lidar market, Hesai Group Sponsored ADR still has a market share as high as 73%. Players in the autonomous taxi sector such as Cruise, Aurora, Baidu Inc, Didi, Pony.ai, and AutoX are customers of Hesai Group Sponsored ADR. Hesai Group Sponsored ADR's latest financial report shows a revenue of 460 million yuan in the second quarter of 2024, a year-on-year growth of 4.2%. In terms of delivery volume, Hesai Group Sponsored ADR's performance is equally remarkable, with a total global delivery volume of 86,500 units in the second quarter, a year-on-year growth of 66.1%. The delivery volume of ADAS products was even higher, reaching 80,800 units, a year-on-year growth of 76.8%. As a lidar company that has held the global market share for three consecutive years, Hesai Group Sponsored ADR has established mass production partnership agreements with 19 well-known domestic and international automakers, covering over 70 vehicle models. Hesai's flagship product, the AT128 long-distance lidar, has been applied to multiple passenger vehicle models, with a cumulative delivery volume exceeding 400,000 units and high market recognition. Additionally, the company has signed a targeted agreement with a domestic electric vehicle manufacturer for the adoption of the next generation L3 ultra-clear ultra-long-distance high-performance lidar, further solidifying its position in the high-end market. Hesai has reached exclusive long-distance lidar supply agreements with the top five Robotaxi companies in China, securing mass production agreements for a batch of new models to be released from 2025 onwards, locking in orders for strong growth in 2025 and 2026. In the overseas market, Hesai has collaborated with four global top-tier automakers, including reaching mass production agreements with three global top-tier international automakers' joint ventures in China. Cooperation with one international top-brand automaker for the global mass production of vehicle models has reached an important verification stage. Hesai has stated that lidar has already penetrated the mass consumer market below 150,000 yuan. With the gradual maturity of advanced driver assistance functions in China, lidar continues to expand into broader market segments. With the beneficial flywheel effects of cost and scale, Hesai has made significant progress in both domestic and overseas markets this quarter. Hesai Group Sponsored ADR expects explosive growth in ADAS market orders between 2025 and 2026, with domestic and international delivery volumes expected to exceed several million units. On the other hand, ROBOSENSE's financial report shows a revenue of 727 million yuan in the first half of 2024, a 121% increase from the same period last year. In the first half of 2024, the total sales volume of lidar was approximately 243,500 units, close to the total sales volume of 2023, with a year-on-year growth of approximately 415.7%. As of the second quarter, the cumulative total sales volume of lidar has exceeded 580,000 units. In terms of the number of targeted models, as of June 30, 2024, ROBOSENSE has obtained mass production orders for 80 vehicle models from 22 automobile manufacturers and tier-one suppliers, achieving large-scale production for 29 models of 12 customers. In the first half of the year, the number of cooperative targeted models with customers in the group has surged, with 17 additional models.Mass production of fixed-point orders, while opening large-scale mass production deliveries to five new models.The third-ranked company Seyond (Chutongda) has a market share of 19%, an increase of 4 percentage points compared to 2022. Third-party data shows that in 2023, Chutongda's shipments of LiDAR exceeded 150,000 units. According to data, Chutongda achieved the shipment of its first batch of products in 2018 and received a $30 million Series A financing led by NIO Inc. Sponsored ADR Class A. Subsequently, NIO Inc. Sponsored ADR Class A also became a major customer of Chutongda. Their long-distance LiDAR, the Falcon, has been delivered as a standard component of the Aquila super-sensing system on the NIO Inc. Sponsored ADR Class ANT2.0 platform, installed on multiple models. It is worth mentioning that Chutongda filed for an IPO with the China Securities Regulatory Commission on August 10, 2023, and is preparing for a listing in the United States, potentially becoming the third Chinese LiDAR company to go public after Hesai Group Sponsored ADR and ROBOSENSE. In addition, Huawei entered the top five in the global automotive LiDAR market in 2023 for the first time with a market share of 6%. In 2022, its market share was close to 0 according to Yole statistics. It can be seen that in 2023, Huawei's shipments and revenue from automotive LiDAR achieved significant year-on-year growth. Data shows that as early as 2016, Huawei began researching and developing LiDAR products and entered the automotive field in 2018. On December 21, 2020, Huawei officially released mass-produced automotive-grade LiDAR. Since then, Huawei's automotive LiDAR products have been adopted in high-end models of brands such as Wenjie, Aweita, Jihux, Zhijie, and Nazha, but overall shipments were relatively limited. It wasn't until 2023 that the sales of the Wenjie series from Huawei and Chongqing Sokon Industry Group Stock surged, and the shipments of Huawei's automotive LiDAR products also began to surge. According to Huawei's latest data, in the first half of 2024, Hong Meng Zhixing has delivered a total of 194,207 vehicles, surpassing the total deliveries of last year in just half a year. This also means that Huawei's shipments of LiDAR are expected to double this year. According to data from the Global Automotive Research Institute, Huawei's LiDAR accounted for 18.6% of the market share with 41,800 sets in the first quarter of 2024, ranking second in the domestic market. Overall, in the current global automotive LiDAR market, Chinese companies dominate in both market sales share and shipments. It is foreseeable that domestic suppliers with a large number of designated vehicle models will maintain a growth trend of "multiple points blossoming" for a long time in the future. However, behind the continuous expansion of the scale of domestic LiDAR manufacturers is the harsh reality of "volume supplementation with prices". Under the leadership of Tesla, Inc. FSD's pure visual solution is gaining momentum, and the challenges facing Chinese domestic LiDAR manufacturers are not just technological routes, but also fierce competition entwined in a price war. Financial reports show that although sales have significantly increased, Hesai Group Sponsored ADR and ROBOSENSE are still continuing to operate at a loss. Some opinions believe that as more and more LiDAR players start using low-cost as a sales strategy, and with the increase in the number of supplier choices, automakers may further pressure prices. The next market competition will enter a truly intense stage. More importantly, some automakers have also joined the competition. Wang Chuanfu, Chairman and CEO of BYD Company Limited, said, "We have many technologies that will be gradually applied, such as LiDAR. If the market price is 3,000 yuan per unit, we may only need a cost of 900 yuan." Third-party LiDAR companies will face tremendous pressure in the future. For ROBOSENSE and Hesai Group Sponsored ADR, which have not yet achieved a balanced profit and loss, this means severe challenges in revenue and profitability. In the Chinese market, the price war among whole vehicle companies has been prolonged and shows no signs of stopping. There are not many automakers who can escape the price war, and even fewer suppliers who can stay out of the price war. Hesai Group Sponsored ADR CEO Li Yifan commented, "When your customers are not making money, they certainly won't allow suppliers to make money. When the pressure to reduce costs is higher than any other pressure, they will naturally continue to pressure suppliers to reduce prices, and we have no choice." Chutongda also stated that there is a growing demand in the automotive industry for cost reduction of core components in the field of autonomous driving. Reasonable cost reduction is understandable, but blindly pursuing low prices will damage the industry and is not the path to a healthy industry development. With strong demand for cost reduction on the demand side, technological upgrades become another option. In April of this year, ROBOSENSE released the new generation of medium and long-range LiDAR MX, which is equipped with the ROBOSENSE independently developed dedicated SoC chip M-Core and also uses the same two-dimensional MEMS scanning chip as the M platform, while upgrading the chip of the transceiver system, marking the culmination of its LiDAR chip design, pricing the LiDAR below $200 for the first time, leading the industry into the "sub-$1000 machine" era. Self-development of chips is also the core competitiveness of Hesai Group Sponsored ADR in reducing costs and increasing efficiency. At the end of 2017, Hesai established a chip department, developing laser driver chips, analog front-end chips, digital chips, and SoC chips. It has completed the LiDAR chip architecture for versions 1.0, 1.5, 2.0, and 3.0 and is currently developing the V4.0 chip.In 6 years, it will be implemented in the next generation of laser radar products.Tutong also plans to reduce costs by increasing chip integration and modularizing machine components. In addition, a complete LiDAR industry chain has gradually formed in China, which not only promotes the localization of the LiDAR industry chain but also is expected to continuously optimize the system cost, further enhancing the product's autonomy and price competitiveness. Regarding profit expectations, ROBOSENSE has previously stated that the break-even point is expected to be reached in 2025; Hesai Group Sponsored ADR has also given an optimistic assessment, expecting to approach profitability in the fourth quarter of this year. Overall, LiDAR is at a critical moment, balancing between survival and profitability, as well as cost reduction and scaling. Both OEMs and suppliers are undergoing a battle without smoke. The winners and losers are expected to be revealed in the coming years. Where is the future of LiDAR headed? Although the future market prospects for LiDAR are promising, there are also controversies. In terms of technological routes, there are different opinions within the industry on whether to choose pure vision or LiDAR. Tesla, Inc. is a strong advocate of pure vision solutions, but based on the achievements of the top LiDAR companies, ROBOSENSE and Hesai Group Sponsored ADR, the market size of LiDAR is still growing rapidly. Some views suggest that one reason why Tesla, Inc. abandoned LiDAR early on was that LiDAR was too expensive at the time. For example, ten years ago, a Velodyne LiDAR cost over $100,000. CEO of Hesai Group Sponsored ADR, Li Yifan, has also publicly stated that Tesla, Inc. does not dislike LiDAR, but due to current costs, they must reluctantly say that LiDAR is a pseudo-demand. If the cost of LiDAR is reduced to a lower threshold, Tesla, Inc. may reconsider LiDAR. Automatic driving technology solutions need to carefully weigh the advantages and disadvantages of each technological route. In the face of the current debate over automatic driving vision solutions, regardless of which solution, the goal is to drive the vehicle better. Therefore, multi-sensor fusion solutions may become the mainstream direction in the future, with the increasing demand for redundancy and the growing need for 3D information making LiDAR more attractive. In multi-sensor fusion perception solutions, different sensors like LiDAR, cameras, ultrasonic radar, and millimeter-wave radar can complement each other, further enhancing the accuracy of the solution and significantly improving the reliability of the automatic driving system, effectively compensating for the shortcomings of pure vision solutions. With the reduction in LiDAR costs and the maturity of technology, fusion solutions are likely to become the mainstream in the future. Now, the LiDAR manufacturers that remain in the "game" are those with mass production capabilities. After a long winter of capital competition, the market structure is becoming more stable. With waves like AIGC and Siasun Robot & Automation hitting, the market for automotive LiDAR is still growing wildly, but its application scope has exceeded the realm of intelligent vehicles, with LiDAR companies starting to seek market opportunities beyond the automotive intelligent driving field, with Siasun Robot & Automation and Robotaxi being the new directions. As industry-leading companies, ROBOSENSE and Hesai Group Sponsored ADR also have clear new focus points. ROBOSENSE leans towards the Siasun Robot & Automation business with a concept of intelligent automation; Hesai Group Sponsored ADR focuses its business on Robotaxi and has been selected as a supplier by the top 5 Robotaxi companies in China, including Baidu Inc Sponsored ADR Class A Apollo. In the long run, the application and imagination space of LiDAR far exceeds the demands of the automotive industry. During this process, industry manufacturers are all searching for their positions and roles, inevitably going through full competition to distinguish true corporate strength and technological excellence. Those companies with unclear advantages will eventually be engulfed in the tide of the times. This article is reprinted from "Observations in the Semiconductor Industry," GMTEight Editor: Jiang Yuanhua.