In August this year, the United States District Court for the Southern District of Florida ruled on an old case involving an assisted driving accident: Tesla was found to be one-third responsible and was ordered to pay $243 million in compensation.[1

In a 2019 accident, a Model S with Autopilot driving assistance disregarded a stop sign on the roadside and collided with a Chevrolet SUV at a speed of 100 kilometers per hour, resulting in one death and one injury. In 2024, the owner of the Model S

According to traffic police investigation, the Tesla driver was not honest, as he was pressing the accelerator and looking down to pick up his phone when the collision occurred, surpassing the limitations of Autopilot. However, the jury believed that

"Who is responsible for it" is a legal and academic issue. The debate in the industry is whether providing safe redundancy of LiDAR can help it get rid of the identity of a crutch.

LiDAR can emit and receive laser independently, constructing the outline of the target object, and its face scanning is not affected by light, which is theoretically safer. In comparison, the 'pure visual approach' that abandons LiDAR has a perfect t

The divergence between the pure visual approach and the LiDAR-based approach is akin to the sweet vs. salty tofu debate in the new energy vehicle industry. Every accident involving autonomous driving becomes a subject of debate, bringing LiDAR, a car

According to Yole's statistics, the number of passenger car laser radars installed last year reached 1.69 million. What does this concept mean? It means that after more than ten years of dedication by laser radar manufacturers, with a global sales vo

In other words, the LiDAR manufacturers that have survived through the cold winter and hot summer can be regarded more as survivors than as winners.

After struggling to cross the first set point, new battles ensue.

Price set in advance

From 2014 to 2024, the LiDAR technology has rapidly surpassed the Moore's Law with a price reduction of over 99%. Correspondingly, overseas companies have withdrawn in an organized manner, and the top four have been replaced by all-Chinese companies,

The intensity of price competition often indicates a market shift from fragmentation to concentration, and the expansion of production scale inevitably leads to a significant cost reduction. However, the situation of LiDAR is relatively special.

Although the cost reduction of LiDAR is related to scale effects, it still targets a very small segment compared to the passenger vehicle market. Major customers are companies aiming for full autonomous driving, such as Baidu, Waymo, and Cruise, whic

It was not until 2022 that the market size of passenger laser radars surpassed L4 autonomous driving for the first time, with shipments reaching six digits. Most companies have been waiting for nearly ten years for this moment, making it a case of in

In the same year, Hesai's semi-solid-state LiDAR AT128 was launched in mass production for the Ideal L9. It was rumored that Hesai's supply price to Ideal was only half of the cost price. Later, Hesai's CFO Xie Dongying admitted that the gross profit

The birth of AT128 is rooted in a requirement set by Ideal in 2020: to maintain the same volume and price of existing products and incorporate twice the number of lasers and detectors.

At that time, Hesai had the 64-line mechanical LiDAR Pandar64, which stood out in all aspects. But in order to get the ideal order and enter the passenger car market, Hesai decided to take a gamble.

With the approach of chip-based technology, AT128 has greatly simplified the production process and reduced the difficulty of expansion by integrating the functions of radar transceiver and other modules onto a single chip. This innovation has rapidl

In 2023, laser radars represented by Hesai's AT128 and Solid-State's M1 (plus) have become hard currency in the new energy vehicle market. However, the problem of a small market size has not been resolved yet.

On one hand, despite the industry's efforts to reduce costs, LiDAR is still too expensive and has long been exclusive to high-end models, unable to reach the mainstream market of 100,000 to 200,000 yuan. Meanwhile, fuel vehicles, which account for ne

On the other hand, Tesla, which is the most proactive in terms of autonomous driving, has decided to go all-in on a pure visual approach, which has influenced a number of domestic car companies. At the height of a fierce price war, LiDAR has become t

Although followers of the pure visual route consider technological factors, cost is often the decisive factor. Therefore, the problem with laser radar is a chicken-or-egg dilemma: it is too expensive for car companies to use, but the cost cannot be r

By entering 2024, the situation began to improve rapidly.

Sagitar Juchuang and Hesai have released the US$200 products MX and ATX. The core is to reduce the price of compression performance, build the stove and wait for rice to be put into the pot, so that cheap models in the mainstream market can no longer

In the terminal market, the weight of assisted driving in car purchasing decisions is gradually increasing. BYD is leading the charge in opening up a formidable movement for equal rights in assisted driving, and a group of fuel vehicles that are unwi

Although the debate between pure vision and LiDAR continues, when the Zero Run B10 brings the LiDAR model to just over 100,000 yuan, LiDAR confidently enters the mainstream price range, and the entire market scale will continue to grow.

Finally, the spring has come for the LiDAR manufacturers, but their troubles are also coming one after another.

If the size of a market suddenly expands tenfold, many outsiders will have the idea of 'I can do it too'.

People who take others' jobs

In April 2023, LG Innotek, a Korean company, acquired over 180 patents from the struggling Argo AI, leaving the industry puzzled. Half a year later, LG Innotek revealed that it had been eyeing the LiDAR market.[3]

Argo AI is a self-driving company jointly invested by Ford and Volkswagen, with a positioning similar to Baidu and Waymo. However, due to its inability to generate revenue for a long time, it has been shut down by Ford and Volkswagen with reluctance

LG Innotek, whose main business is lens modules, is a seasoned player in Apple's supply chain. However, its revenue has long relied on major clients, and it struggles to compete with Chinese peers on costs, which is a thorn in its side.n

As early as 2015, LG Innotek started to invest in the LiDAR market, which has enormous potential. However, several years later, LiDAR is still at the stage of great potential without any sign of explosive demand.

By 2023, the dawn of LiDAR technology has become increasingly apparent, and LG Innotek, which senses the urgency of the moment, has taken over the technical assets of Argo AI to establish its own independent LiDAR department. Led by Chairman Moon Hee

Over the past decade, the laser radar market has been in a state of chaos among start-ups. One of the reasons is that the market size is too small, making it relatively limited in terms of attraction and profit margins for the established players wit

But today is different from the past. Although the penetration rate is still negligible, whether it is a vertical comparison of the once poor shipments or the momentum of lidar to explore cheap models, subsequent growth has become the industry consen

On one hand, after achieving the shipment of one million units, Hesai has set a sales target of 1 million units for this year. Considering Hesai and Suteng's planned annual production capacity of around 2 million units, the amazing growth rate in the

On the other hand, the low and mid-end models have opened a gap, from the last year's GAC Aion RT priced at RMB 155,800 to this year's Lingrun B10 priced at RMB 119,800, with the continuous cost reduction of LiDAR sensors, the trend of popularization

So, manufacturing giants that once held doubts about LiDAR have also come to feel that they have obtained a competitive advantage, seeing their well-off LiDAR manufacturers, and have generated the idea of taking on tasks that require fine craftsmansh

The first type is terminal vehicle manufacturers like BYD. In BYD's equity plan, both versions A and B of the God Eye are equipped with laser radars. Considering BYD's huge sales volume and vertically integrated business model, there are sufficient r

The second type is Desay SV, a local intelligent driving Tier 1 supplier. Desay SV's main business is box manufacturing, which integrates multiple ECU functions into domain controllers. The self-developed LiDAR may have the same considerations as the

The third type is LG Innotek, an old-money manufacturing company. The automotive industry has always been a key focus for LG, and LG Energy is a well-known supplier of power batteries. Both LG Electronics and LG Display have also made investments in

In June this year, the senior management teams of LG's subsidiaries paid visits to major automakers, making their ambitions in the automotive sector clear[5]. Neighbouring Samsung and Sunyu Optics, which makes lenses and modules, are also eager to tr

Entering the market at a relatively mature stage, while there is no shortage of risks of coming in empty-handed, the certainty of potential returns is also stronger. This invisible force is propelling new players to rush into the field.

This is also a special aspect of LiDAR: most industries are competing fiercely in the blue ocean market to form a stable market structure. However, LiDAR is the opposite case where numerous companies struggle fiercely in the red ocean market until th

As orders continue to pour into the LiDAR industry, in the face of all certainties and uncertainties, car companies have become the biggest variable.

The Man Behind the Scenes

In 2022, China's renewable energy vehicle penetration rate exceeded 20%. ADAS LiDAR saw a small outbreak with sales exceeding 220,000 units. Although the absolute value is not high, it is already more than three times that of the previous year.

Since then, passenger cars have taken over as the most important downstream customer for L4 autonomous driving technology.

Hesai and Softbank Robotics have early plans for their semi-solid-state product lines. The mass production delivery prices of AT128 and M1 have been reduced to below 700 dollars. They entered the passenger car market through orders from Ideal and Xia

Based on last year's shipments, both Hesai and Solid-State's ADAS LiDAR shipments accounted for more than 90%.

In this process, the landscape of Hesai and Supermap being the two leading companies is gradually taking shape. However, with the rapid expansion of the market and the entry of top players, this landscape is not stable and may even be disrupted at an

The reason is that, unlike traction batteries, LiDAR is considered an optional consumption in cars and needs to be paired with assisted driving. This has long excluded many traditional car companies with huge sales volumes but still struggling with i

In 2024, the largest customers of both Hesai and Supspeed contributed more than one-third of their revenues, with the top five customers accounting for 60% and 83% of their respective revenues. Another manufacturer, Tuatong, is closely tied to NIO, a

In contrast, the customer selection options for power battery manufacturers are greater, with the top five customers of CATL contributing only 37% of revenue in the same period.

Meanwhile, car companies that aspire to make achievements in assisted driving all have some intention to develop their own parts. With no clear conclusion on the laser radar route and pure visual route, the binding relationship between manufacturers

In the first quarter of this year, Suprotech lost two major customer orders: one was XPeng, which shifted to a pure visual approach, and the other was Huawei, which developed and used its own laser radar. Despite doing nothing wrong, Suprotech's ship

As the lidar market shows signs of fragmentation, the downstream domestic automotive market is moving towards concentration, which will in turn affect the competitive landscape of the industry.

First, while new energy vehicle companies were the main drivers influencing the LiDAR battle in the past, now joint venture car companies are also accelerating their adoption of LiDAR.

Sales of new energy vehicles are concentrated in leading brands, and traditional automakers are gradually making up for their lack of intelligence. The weight of a single customer's contribution to the sales of LiDAR is increasing. Ideal, which sold

Moreover, the framework agreement in the automotive industry is like a guideline, with a considerable distance from actual purchase orders. Compared to the number of fixed-point projects, the results of mass production are closer to the final goal. S

The debate on technological routes continues, and the scenario of "my client suddenly developing its own technology" still plays out. Although the factors determining market share remain the same, the impact and fluctuations these factors bring about

Technology and cost are important, but aligning with the right people and partners is becoming increasingly crucial as well.

References

[1] Tesla must pay portion of $329 million in damages after fatal Autopilot crash, jury says，CNBC

[2] Hesai Technology: High sales volume but low profit for Cyber Automobile

[3] LG Innotek Stuns the World with Groundbreaking EV Charging Technologies，LG Innotek

[4] LiDAR market surges with 1.6M units shipped in 2024—BYD, Li Auto, and Huawei are reshaping competition with mass-market integration，YOLE Group

[5] LG Meets Hyundai and Honda: 'Leave the Battlefield to Us', South Korean Economic Daily

This article is from the WeChat public account “Yuanchuan Technology Review” (ID: kechuangych)