As LiDAR is being installed in cars, should we be wave chasers or wave makers?

In terms of autonomous driving technology, Chinese automakers have collectively stood against the purely visual Tesla and started mass-producing autonomous driving perception fusion solutions with LiDAR. For example, Great Wall WEY's new flagship SUV Mocha is equipped with LiDAR provided by Ibeo, NIO ET7 chose Innovusion, and Xpeng also reached a cooperation with Livox.

"China is the main battlefield for LiDAR to be installed on cars this time," said Bao Junwei, CEO and co-founder of Innovusion. So, when will LiDAR be installed on cars? Which technology path is the best solution? What are the biggest challenges facing the industry? What impact will the participation of giants such as Huawei and DJI have on the industry landscape? Recently, several LiDAR manufacturers have held in-depth discussions on the topic of "Progress and Latest Opportunities of LiDAR".

LiDAR is expected to be installed in cars by next year or 2025.

"Valeo's lidar has been mass-produced on Audi models as early as 2017. From the perspective of vehicle regulations, it has actually been 'installed on the car'. But if we use the usefulness of lidar and whether enough car manufacturers use lidar to define the 'first year', I think its first year should be 2022." Bao Junwei pointed out, "We clearly see that about 5-10 models will be equipped with lidar next year." Among them, Volvo announced that it will equip its new models that will be put into mass production in 2022 with Luminar lidar sensing technology.

Qiu Chunchao, co-founder and executive president of RoboSense, and Ju Xueming, CEO of Liangdao Intelligence, all agreed with the first year of 2022. Among them, Qiu Chunchao believes that the first year of autonomous driving and the first year of LiDAR are tied together. RoboSense alone has three projects that will be officially SOP in 2021, and several models will be pre-installed in mass production in September next year.

After the car is installed, whether the function is mature is actually the most worrying issue for LiDAR manufacturers. "Next year will definitely be a big leap in terms of quantity, but this is not very important. We are a supplier and we are more concerned about how much value the product creates for the OEM and end users. In the end, it comes down to the question of experience, that is, whether it is worth it and whether consumers will pay for it? I am hesitant about this answer. I think only with real experience can we really increase the quantity, and then discuss whether it may be more valuable in the first year." Li Yifan, CEO of Hesai Technology, said bluntly.

Although the use of LiDAR in cars is expected, it is still in line with national policies. Since last year, the country has vigorously promoted new infrastructure, and the Chinese version of autonomous driving has also begun to have a clearer timetable.

According to the "Technology Roadmap for Intelligent Connected Vehicles (Version 2.0)" released at the end of 2020, by 2025, the penetration rate of partially autonomous driving and conditionally autonomous intelligent connected vehicles will reach 50%, and exceed 70% in 2030; the C-V2X terminal new car assembly rate will reach 50% in 2025, and will be basically popularized in 2030; highly autonomous driving vehicles will first be commercialized in specific scenarios and limited areas in 2025, and then gradually expand their operating range.

With the support of policies, Zhai Jun, chairman of Wanjie Technology, believes that lidar technology should also mature between 2024 and 2025 with the implementation of autonomous driving and vehicle-road collaboration.

Multiple paths will coexist for a long time, and there is no optimal solution yet

In terms of LiDAR technology, it can be divided into mechanical LiDAR, semi-solid LiDAR, and solid-state LiDAR. Solid-state and semi-solid-state LiDAR have more advantages than mechanical LiDAR in terms of cost, reliability, volume, and mass production feasibility, so that the market is obviously more "friendly" to these two technology routes. The fact that Luminar, which takes the solid-state LiDAR route, is widely sought after in the capital market is a strong proof of this.

Several LiDAR manufacturers’ executives disagreed. “It is too early to say which technology path is more advantageous. Several technology paths will develop in parallel in the short term,” said Li Yifan. “No matter how much we say now, it is all in the dark. Everyone is working on these technology paths and can do them. It is difficult to say which one will become the future of the industry.”

The technology path itself will not become the core barrier of an enterprise, but the experience accumulated under multiple paths is universal to a certain extent. Just like Porsche, two doors or four doors is just a form, and what is more important is its engine technology and even the brand itself, which is the value and barrier of the enterprise.

Qiu Chunchao also agreed with this and further said: "Customers used to prefer mechanical LiDARs, but now they prefer front-mounted, separate LiDARs. Mechanical LiDARs are good for Robotaxi, and front-mounted LiDARs are also good for AGVs. They cannot be compared on the same platform. Different applications have different needs at different times. In the short term, no one technology route can dominate other routes. We need to think more about the laws of the market itself."

Apollo Moon equipped with Hesai’s customized LiDAR. Image source: Hesai Technology

For OEMs, it doesn’t matter whether the cat is black or white, as long as it catches mice. Customers don’t really care what technical route is used, and OEMs care about price and product scalability.

Ju Xueming, Zhai Jun and other senior executives also reached a consensus on the cost issue. Zhai Jun said: "Cost is the key factor in the adoption of LiDAR. We fully understand that it is difficult to adopt the chip-based approach, but if we do not adopt the chip-based approach and miniaturize the product, and if the cost is not reduced to 1,000 yuan or even a few hundred yuan while ensuring quality, how can we be competitive? How can we adopt LiDAR?" Therefore, cost reduction is the ultimate secret of LiDAR's adoption in vehicles.

Cross-border giants enter the market, bringing both opportunities and challenges

"China's autonomous driving industry is now taking the lead in global competition," said Zhai Jun, chairman of Wanji Technology. Taking the lead is not simply taking the initiative, but a truly deliberate move, and is the result of strategic thinking that thinks about the end before starting.

So what challenges does LiDAR still face in the ever-changing industry? At present, how to polish the supply chain has become a major problem facing many LiDAR manufacturers. "Fortunately, we are in a good era and a good place." Bao Junwei explained, "As the main battlefield for LiDAR on cars this time, China has the most complete supply chain and industrial chain in the world. We can take advantage of our geographical advantages and polish and grow with the supply chain. This is also a very good opportunity to overtake others."

While the basic industry continues to improve, how to seize the wave of LiDAR installation and continue to "move forward" has become the second problem faced by LiDAR manufacturers. This involves delivery commitments and responsiveness. Consumer satisfaction is the key to the subsequent vitality of LiDAR.

Li Yifan said bluntly: "The results of the experience will determine the life or death of our industry. If the experience is not good enough and the cost is there, the entire industry may be questioned."

Therefore, for all LiDAR manufacturers, they are now "grasshoppers on a string". First, make the cake bigger, and then think about how to divide the cake. This also applies to the mentality that LiDAR manufacturers should maintain when facing the entry of giants such as Huawei and DJI.

Reliability test of Huawei's 96-line mid- and long-range LiDAR. Image source: Huawei

In fact, the cross-border entry of Huawei and DJI has also promoted the development of the entire LiDAR industry to a certain extent, because their entry has further increased the industry's acceptance of LiDAR.

So can the giants take over the entire market with their strong capital and industrialization capabilities? In fact, capital can only change a limited number of things. There are too many routes to take in the LiDAR industry. In the huge maze, if the thinking is not clear, even if it is a giant, the size is not enough.

Ultimately, product strength and R&D strength are the biggest competitive advantages for enterprise development. Li Yifan believes that "it is not so easy for the big fish to eat the small fish. In the end, it is very likely that the fast fish will eat the slow fish. As long as you run fast, you may win the market."

The industry's expectations for Huawei are not just that of a LiDAR manufacturer. "For us, we will fight this battle with survival as the highest principle. But for Huawei, what it wants to do is full-stack autonomous driving technology, so it is not opposed to cooperating with us, so I think it is still a relatively healthy competition." Qiu Chunchao said frankly.