Velodyne: lidar creator, crashed on the eve of dawn

Turning the time back to 2019, Velodyne, the creator of lidar, officially laid off most of its staff in China and announced that it would no longer directly sell lidar in China, where the market is booming. The industry used the term "decadent trend" to describe Velodyne's Decide.

At that time, relevant people denied the statement that "Velodyne exited the Chinese market." However, what we are waiting for is not the comeback of the originator of lidar, but the news that it has completely disappeared from the stage of history after merging with Ouster.

The end of the lidar creator

The birth of vehicle-mounted multi-line lidar has to start with a war.

In 2001, the United States was mired in the war in Afghanistan. In order to reduce casualties, the U.S. Department of Defense placed its hope on driverless vehicles, so it planned the DARPA Challenge. Participants whose driverless vehicles reached the finish line first according to the prescribed route would receive 100 Ten thousand U.S. dollars.

Vehicles participating in DARPA Challenge

At that time, Velodyne was still an audio company specializing in the design and production of subwoofers, and it was already well-known in the field of subwoofers. The founder David Hall, who is full of scientific research spirit, was very interested in the DARPA Challenge and chose to join.

Velodyne founder David Hall

David Hall did not place in the first two DARPA challenges, but he realized the limitations of single-line radar, so he invented the HDL-64E solid-state hybrid lidar and achieved commercialization and mass production in 2007.

HDL-64E 64-line solid-state hybrid lidar

David Hall did not participate in the third DARPA Challenge in 2007, but 5 of the 6 finishing teams were equipped with the lidar invented by him. Velodyne also became famous in one battle and established its high position in the field of autonomous driving.

DARPA Challenge Finishing Vehicle

It is worth mentioning that Thrun, who is from Carnegie Mellon University, successfully attracted the attention of Google co-founder Larry Page because he won the second DARPA Challenge. He was finally invited to join Google and started Google's autonomous driving project. , this is the predecessor of Waymo.

Google self-driving project test car

Since then, a large number of autonomous driving companies such as Cruise, Argo, and Zoox have sprung up. At the same time, the DARPA Challenge has also set the pattern of autonomous driving system hardware + software, and the curtain of autonomous driving has begun.

The rise of autonomous driving has brought Velodyne to the peak of its career. People joked that the number of autonomous vehicles on the road depends on how many lidars Velodyne can produce.

So even with high prices, slow lead times and sluggish after-sales service, Velodyne's lidars are still in short supply.

Velodyne lidar imaging

In 2016, the Velodyne LiDAR division was spun off from Velodyne Acoustics and became an independent company. In order to get priority in getting goods, Ford and Baidu jointly invested US$150 million in Velodyne lidar company. Since then, Velodyne has successively signed contracts with Mercedes-Benz, Hyundai Mobis , Boston Dynamics and other companies.

Everything seems to be prosperous, there is no rival in the world, and the future of lidar seems to be in the hands of Velodyne.

But Velodyne didn't expect change to happen so quickly.

Ford invests in Velodyne lidar

While Velodyne is unparalleled, many companies have seen opportunities in the lidar track. Valeo, a long-established parts manufacturer founded in 1923, received a large number of European lidar orders in 2016. In 2017, its first-generation SCALA lidar appeared on the Audi A8.

Audi A8 equipped with Valeo's first-generation SCALA lidar

Following the rapid rise of lidar companies such as Luminar, Tudatong, Hesai Technology, and Sagitar Juchuang, they will bring more advantageous products.

Obviously, there is no smell of crisis within Velodyne. In an interview in 2017, Weng Wei, head of Velodyne China, mentioned that his advantage is still that “we are the only one that can mass-produce wire beam lidar on a large scale instead of taking out samples.” ".

Weng Wei, head of Velodyne China

As more companies poured into the lidar track, the products became more and more entangled. However, the slightly arrogant Velodyne lidar company was at a disadvantage in three aspects and began to lose its ability to recover.

1. Price and delivery time.

Velodyne mainly sells 64-line, 32-line and 16-line lidar, with official prices of US$80,000, US$40,000 and US$8,000 respectively. Since Velodyne chooses an agency model for sales, the buyer also needs to pay additional taxes and agency service fees.

Velodyne lidar products

At that time, the final price of obtaining a Velodyne 64-line lidar was nearly 700,000 yuan.

Other companies can provide more cost-effective products, such as the 40-line lidar Pandar launched by Hesai Technology in 2017, which costs less than US$40,000. In the same year, Sagitar Jutron also launched a 16-line mass-produced lidar, claiming that it was at least half cheaper than foreign products.

At the same time, Velodyne's extremely long delivery time has also caused many regular customers to abandon it and run to lidar companies with faster delivery and lower prices. For example, in May 2021, Hesai won Velodyne's largest customer in the world, Baidu Apollo.

2. Service level.

Limited by the sales channel of the agency model, Velodyne's pre-sales technical consultation, after-sales maintenance, product installation, usage guidance and other services are all fully handled by the agent.

On the one hand, the service levels of agents vary greatly. On the other hand, if you encounter a technical problem that is difficult for the agent to solve, you need to contact the headquarters and send the product back to the United States for repair and then send it back. This cumbersome process greatly hinders the customer's research progress.

Although Velodyne had an office in China at the time, it was only responsible for overseeing sales. Velodyne China will directly provide pre-sales and after-sales services to OEMs that purchase radars for more than US$1 million at a time.

3. Market forward-looking (product positioning and iteration)

Since L4 autonomous driving is still in the research and development stage, Google Waymo, which is making the fastest progress, only needs lidar for about a hundred vehicles a year. At that time, most of Velodyne's lidars were sold in fields such as mapping, security, and scientific research, so Velodyne did not pay attention to the impact of vehicle-mounted lidars.

Drones equipped with Velodyne lidar

However, in recent years, the main market for vehicle-mounted lidar has shifted from L4-level driverless driving to L2-level assisted driving. Due to the large demand for lidar, the latter has become a "gantry" for many lidar companies to turn over.

Unfortunately, Velodyne did not seize this opportunity.

Since passenger cars need to be mass-produced, if lidar is to be used in cars, it must pass vehicle-level certification. The previous mechanical lidar required high-frequency mechanical rotation, had a short lifespan and was too large to pass vehicle certification.

Mechanical lidar (roof)

Under this circumstance, solid-state/semi-solid lidar, which has great advantages in lifespan and volume, has become the new market "darling".

Velodyne also saw business opportunities in solid-state lidar, but for some reason, it was originally expected to achieve mass production of the brand's first semi-solid state radar, Velarray, in 2018. It was not until 2020 that the semi-solid-state lidar Velarray H00 and M 1600 were launched.

Velarray H00

At that time, companies such as Luminar, Tudatong, Valeo, Hesai Technology, Huawei , and Lanwo had already launched their own semi-solid laser radars and established a firm foothold by binding them to car companies.

Throughout 2021, Velodyne shipped more than 15,000 units, but only more than 2,400 were solid-state sensors, and most of them were still mechanical lidars.

Velodyne, which once occupied more than 80% of the global lidar market, has shrunk rapidly. During this time, there was another episode.

In 2019, Velodyne accused Hesai Technology in the United States of infringing its patents related to rotating lidar registered in the United States. Hesai Technology agreed to pay settlement fees to Velodyne, including one-time patent licensing compensation (160 million yuan) and subsequent annual Patent license royalties paid.

Even with the addition of a huge patent fee, Velodyne still cannot avoid annual net operating losses.

Along with the not optimistic market conditions, Velodyne's internal management also experienced serious infighting problems. In February 2021, Velodyne officially announced that founder David Hall and his wife were dismissed from their posts due to "inappropriate performance and lack of integrity."

Founder David Hall and his wife

This change of leadership not only caused Velodyne's stock price to immediately fall by 15%, but also started a farce in which Velodyne leaders from various factions rushed to step down.

Amid internal and external troubles, Velodyne finally announced its merger with Ouster. After the merger, the company will still be named Ouster, and its stock code will also be OUST. On February 13, 2023, the name of Velodyne, a pioneer who once used lidar to light up the road to autonomous driving, was completely erased.

Not too slow, not too fast

In fact, Velodyne is not the only company that has perished in the new energy wave. IBEO, which has also made achievements in the lidar industry, directly declared bankruptcy in 2022. Previously, Great Wall also used the IBEO lidar as a front to promote its new Wei brand cars.

Unlike Velodyne, IBEO's failure was not due to slow transformation. On the contrary, IBEO is very visionary for solid-state lidar technology.

IBEO was founded in 1998 and was acquired by SICK of Germany in 2000. The single-line radar it produced participated in three DARPA challenges. In 2009, IBEO became independent and jointly developed SCALA lidar with Valeo.