Those who use LiDAR are all fools

　　A few years ago, Elon Musk, the founder and CEO of Tesla, made a roast that led to a debate on laser radar. However, the fact proved that the car companies that use laser radar are not fools, and more and more models have chosen to use laser radar.

　　Although the scale has increased, LiDAR companies are not doing well, with bankruptcy, mergers, and difficulties in making money becoming the "big mountain" weighing on them. It cannot help but wonder why the former darling of capital has fallen here? What is the industry landscape of LiDAR now? Does LiDAR have a future? Reading this article will help you understand:

　　What is the current pattern of the LiDAR market?

　　2. The Dilemma of Lidar Manufacturers

　　3. Is LiDAR foreseeable in the future?

　　Domestic and foreign manufacturers are both hot and cold

　　The current pattern of the LiDAR market can be summarized in one sentence: overseas enterprises are facing a chill, while domestic mass production is in full swing.

　　Once, the market share of LiDAR was firmly held in the hands of foreign companies, but now, most foreign LiDAR companies are facing bankruptcy and mergers, and the entire market is filled with cold air.

　　In September 2022, Ibeo, a German LiDAR company, filed for bankruptcy in the Hamburg court due to its inability to obtain further growth financing. Previously, Ibeo had supplied brands such as Great Wall and Audi;

　　In November 2022, Velodyne, a major laser radar manufacturer, announced a merger with Ouster, which turned into tears of the times. You should know that Velodyne was a well-deserved industry giant before, claiming to have nearly 70% of the global LiDAR market share.

　　Among them, Ibeo chose the all solid-state LiDAR with high technical difficulty, but due to technical limitations, there was no significant improvement in performance, resulting in difficulty in getting on the vehicle. However, Velodyne and Ouster's mechanical LiDAR are expensive and have a long supply cycle, which has also failed to catch up with the craze for getting on board.

　　On the other hand, there are fundamental differences in the development cycle of vehicle models both domestically and internationally. The slow iteration of vehicle models in foreign markets, coupled with factors such as vehicle certification, has led to delays in the timeline and delays in getting on board.

　　It can be seen that although these foreign enterprises have their own difficulties, all of them ultimately point to one outcome, which is the difficulty of mass production and installation. The first prerequisite for determining the success of a LiDAR enterprise is precisely mass production and installation.

　　(Ideal L9 equipped with LiDAR)

　　As is well known, LiDAR is a money burning industry, and enterprises lack the ability to generate blood. It is the norm for the industry to rely on capital transfusion for survival. However, if the product cannot be shipped in a timely manner, it means there is no revenue. In this situation, once capital encounters a cold winter, it will instantly fall into a 'Jedi', like an invisible hand holding their already fragile throat.

　　For a while, mergers, delisting, and bankruptcy have become the norm for foreign laser radar companies. However, the domestic laser radar enterprises are in a different situation. The main factors contributing to this contrast are the rapid iteration of domestic vehicle models and the high demand for autonomous driving.

　　As mentioned earlier, there are fundamental differences in the development cycle of car models both domestically and internationally. Domestic car companies are more "rolling" and their products iterate rapidly, which means that there are more car models that require LiDAR. On the other hand, the sales of new energy vehicles in China reached 6.887 million in 2022, a year-on-year increase of 93.4%. Both contributed to the launch of LiDAR in 2022.

　　2022 is known as the first year of commercialization of autonomous driving, and as one of the autonomous driving hardware, LiDAR has naturally ushered in the first year of mass production. Domestic LiDAR enterprises have finally enjoyed the industry's dividends and become the "pig" in the wind.

　　On February 9, 2023, Hesai Technology announced its listing on the NASDAQ stock market in the United States, officially giving birth to the first domestic LiDAR stock. And in terms of shipment volume, Hesai Technology is also an absolute giant. According to data, Hesai Technology has delivered over 100000 LiDARs in total, with the market share ranking first in the world;

　　In 2023, the laser radar company Sagitar Juchuang announced that it had won orders from a number of car companies such as FAW Toyota and Celes, and had previously obtained financing from BYD and Yutong Bus;

　　In 2022, Tudatong also completed the milestone of 50000 laser radars being taken offline, and had previously received investment from companies such as NIO.

　　Numerous domestic LiDAR enterprises have achieved mass production, and the dual ice and fire pattern of domestic and foreign LiDAR enterprises has officially formed. Although it may seem that domestic companies need to live a more fulfilling life, in reality they also face a difficult industry curse.

　　Unable to Escape the "Hard to Make Money Curse"

　　Although domestic manufacturers have not felt the chill of the foreign market, overall, they have also fallen into the curse of difficulty making money.

　　Taking Hesai Technology as an example, its financial report for the first quarter of 2023 showed a net revenue of 430 million yuan in Q1, a year-on-year increase of 73%. However, the operating loss was as high as 128 million yuan, a year-on-year increase of 207.3%, and the net loss was 119 million yuan, a year-on-year increase of 374.1%.

　　For other LiDAR companies in the industry, they generally face difficulties in making profits even after mass production and installation. So why are domestic laser radar companies trapped in the curse of difficult to make money in the industry?

　　Ultimately, it is still because the competition in the LiDAR industry is too fierce.

　　It should be noted that the raw material procurement cost of laser radar enterprises is very high, and the internal laser emission system, laser receiving system, information processing system, and scanning system are mostly composed of high-end components, with high costs. At the same time, due to the extremely high safety requirements of intelligent driving, the LiDAR must undergo long-term testing and certification before boarding the vehicle, and for enterprises, a large amount of fees must also be paid.

　　Previously, Velodyne's 64 line LiDAR was priced at several hundred thousand yuan. Due to limited production capacity, even buying with cash had to wait for more than half a year. Now, the price of LiDAR has dropped again and again.

　　There are two main reasons for this phenomenon: more product substitution and high bargaining power among car companies.

　　At present, most of the car models in the market are based on L2+level intelligent driving, and within this intelligent driving range, cameras, ultrasonic radar, and millimeter wave radar are all competitors of LiDAR.

　　Previously, Tesla founder Elon Musk had believed that 'all those who use LiDAR are fools', and the main reason for this statement was the high cost of LiDAR. It is understood that Tesla previously adopted a pure visual route based on cameras, with extremely low hardware costs. Not long ago, Tesla added 4D millimeter wave radar to the HW4.0 platform hardware, which can still bring significant imaging effects, but the cost is several times lower than that of LiDAR.

　　This means that car companies have more choices in terms of assisted driving hardware. Many new car models have started to switch to optional LiDAR, and the number of vehicles on the bike has also begun to decrease. The previous situation of "less than 4, please don't talk" is changing.

　　On the other hand, in early 2023, after Tesla announced price cuts, the new energy vehicle market also began a price war, and cost reduction has become a priority for car companies. In this scenario, car companies' procurement budgets have significantly shrunk, and LiDAR companies have to constantly compromise on prices in order to get on board, which has also led to products becoming cheaper and cheaper, naturally falling into the industry curse of difficult to make money.

　　Difficult to make money with LiDAR

　　Is the future foreseeable?

　　Firstly, in terms of functional performance, LiDAR has higher resolution and can directly output 3D point clouds in the physical world, greatly improving the vehicle's perception ability and providing a layer of safety assurance for the entire vehicle.

　　On the other hand, with the development of intelligent driving, the use of a single sensor is changing. At present, most of the car models on the market adopt a multi-sensor fusion method of cameras, 4D millimeter wave radar, and LiDAR, with LiDAR being an indispensable "member".

　　Some institutions predict that the global LiDAR market will reach 13.54 billion by 2025. It can be seen that there is huge room for growth in LiDAR.

　　For laser radar companies facing difficulties in making money, it is crucial to quickly reduce costs and wait for the industry's explosive period to officially arrive. So how should LiDAR companies reduce costs?

　　The first is to achieve large-scale mass production. You should know that LiDAR ultimately belongs to the manufacturing industry, and it cannot do without the scale effect of industrial production.

　　Through large-scale mass production, we can evenly share the costs of product development, equipment, and personnel, and also increase the bargaining space for upstream procurement through large-scale raw material procurement. This is almost a necessary path for industrial production.

　　On the other hand, it is to improve product integration. In the chip industry, there is a Moore's law that states that the number of transistors that can be accommodated on an integrated circuit doubles approximately every 18 to 24 months. That is to say, the performance of the chip will double in about two years, and the price will also be reduced to half of the previous one.

　　And LiDAR has also begun to have a trend towards chip based technology. Integrating laser emitters and receivers onto chips, through product iteration, continuously increases integration and performance, thereby significantly reducing costs.

　　It has become a consensus within the industry to increase quantity and improve integration, in order to achieve the goal of cost reduction, and to soar when the industry's explosive period approaches.

　　From this, it can be seen that even in the face of the curse of making money, the future of LiDAR is still foreseeable, but it is still unknown how many companies can "survive" until the outbreak period arrives.