Automakers are competing for smart driving, and Hesai has made the first move

Author | Wang Xiaojun

Editor | Chai Xuchen

Automakers are vigorously promoting intelligent driving, allowing suppliers of core components like LiDAR to achieve profitability.

On March 11, Hesai Technology released a financial report that vindicates the LiDAR industry: in 2024, the company achieved its first annual profit, with an adjusted net profit of 13.7 million yuan, becoming the only publicly listed LiDAR company in the world with positive annual operating cash flow (63 million yuan) and net cash flow (1.3 billion yuan).

Alongside the growth in these two metrics, Hesai's overall gross margin for the year also remained at a high level of 42.6%.

As many new cars priced around 100,000 yuan begin to equip LiDAR, and numerous fuel vehicles pursue intelligence, the shipment volume of LiDAR is expected to further increase. Additionally, Hesai announced that it has reached a multi-year exclusive cooperation with a top European OEM, further opening up international markets.

With the dual benefits of performance and cooperation, Hesai's stock price surged over 33% shortly after the U.S. stock market opened on March 11.

However, as automakers continue to cut costs, the profits that suppliers can earn will inevitably decrease, and these manufacturers must seek new high-profit adaptation scenarios and businesses. Thus, intelligent devices such as embodied robots and lawn mowers have become new application directions for companies like Hesai.

As the cost of LiDAR decreases and application scenarios increase, perhaps a single component can reshape the global intelligent mobility and robotic perception industry landscape.

Phase of Success

"Let us review the exciting journey of 2024 together." Facing Hesai's achievements in 2024, Hesai Technology CEO Li Yifan could not hide his excitement about achieving profitability.

From the financial report data, in 2024, Hesai Technology's total revenue reached 2.077 billion yuan, a year-on-year increase of 10.7%; fourth-quarter revenue was 720 million yuan, a year-on-year increase of 28.3%.

But what is more noteworthy is that its annual Non-GAAP net profit turned positive for the first time, with both operating cash flow and net cash flow being positive, making it the only LiDAR company in the world to achieve this goal.

The core driver of this growth comes from the explosive increase in LiDAR delivery volume. In 2024, the total annual LiDAR delivery volume reached 500,000 units, a year-on-year increase of 126%; in the fourth quarter alone, 220,000 units were delivered, exceeding the total for 2023, with a year-on-year increase of 153.1%.

Among them, the ADAS sector contributed the largest share of shipments, accounting for as much as 91% in 2024, a year-on-year increase of 134.2%, reflecting the trend of L2+ level intelligent driving functions becoming standard for automakers.

The surge in shipment volume is attributed to the growth of cooperative customers. Currently, Hesai has reached mass production cooperation with 120 models from 22 domestic and foreign automakers, covering 9 of the top ten automakers by market value in China, including BYD, Great Wall, and Changan In terms of costs, the economies of scale have already manifested. Although the unit price of LiDAR has plummeted from 35,900 yuan per unit in 2022 to 4,023 yuan per unit in 2024 (a nearly 90% decrease), Hesai has still achieved cost optimization and profit balance.

Moreover, the economies of scale and product iteration have made Hesai's products more competitive in the market. In addition to the declining costs of existing products, the unit price of its next-generation ATX series LiDAR will drop to $200 (approximately 1,400 yuan), pushing its penetration into the 100,000 yuan vehicle market.

From the expenditure perspective, the major expense remains in R&D investments, with R&D expenses in the fourth quarter of 2024 amounting to 242 million yuan, a year-on-year increase of 6.1%, mainly used for chip technology, new product development in the robotics field, and adaptation to overseas markets.

By the end of 2024, Hesai's cash reserves will reach 3.2 billion yuan, providing ample ammunition for capacity expansion (with a production target of 2 million units in 2025) and technological iteration. Currently, having reached the turning point of profitability, Hesai has finally transitioned from "burning money to survive" to a "positive cycle," marking a phased success.

Facing the already commenced year of intelligent driving, Li Yifan has also set an optimistic target for Hesai in 2025: the shipment volume is expected to reach 1.2 million to 1.5 million units, with LiDAR in the robotics field expected to reach 200,000 units; net revenue is expected to reach 3 billion to 3.5 billion yuan; and profit is expected to reach 200 million to 350 million yuan.

Technological Competition

For LiDAR companies like Hesai, dawn was only seen last year.

Before this wave of good results, Hesai and several other LiDAR manufacturers experienced a few years of skepticism. In recent years, there has been intense debate in the industry regarding the technological route for intelligent driving, choosing between LiDAR and pure vision.

A faction represented by Elon Musk insists on the pure vision route, claiming that LiDAR is the "wrong solution," and states that simulating biological neural networks and the visual system of the eyes is the most effective way in complex road driving environments; however, based on the performance of Tesla's intelligent driving system in domestic road conditions, it seems that the effectiveness still needs improvement.

Li Auto CEO Li Xiang also bluntly stated, "If Musk were to drive in China, he would also retain LiDAR." This reflects the rigid demand for perceptual redundancy in China's complex road conditions.

Despite the prolonged debate over whether to use LiDAR, equipping vehicles with LiDAR has become a symbol of high configuration and a display of sincerity from car manufacturers.

The reason why the LiDAR route is widely chosen lies in its core competitiveness of "extreme environmental fault tolerance." Richard Yu, Chairman of Huawei's Car BU, pointed out that cameras may struggle in strong backlighting, rain, and fog scenarios, while LiDAR can provide centimeter-level accuracy, unaffected by lighting conditions. Additionally, in scenarios such as pedestrians crossing or electric vehicles suddenly changing lanes, the 3D point cloud data from LiDAR is easier for algorithms to interpret compared to 2D images from cameras.

Furthermore, the dual drive of policies and user awareness also promotes the retention of LiDAR. With the advancement of technology, L3-level autonomous driving regulations will be implemented in the future, which will impose higher requirements on redundant systems.

The safety anxiety from consumers is a more critical choice. Previously, LiDAR was considered a "safety redundancy" component, and some industry insiders viewed it as a transitional design But the market proves that when new energy vehicles are no longer toys embraced by a few geeks but become driving tools for the majority, the real needs of users and their concerns about technology and products must be taken into account for the business to last.

Therefore, even though the range and charging speed of pure electric vehicles continue to improve, users want peace of mind and an extra layer of safety. The surge in sales of hybrid and extended-range vehicles, as well as the increasing adoption of lidar, can all be explained from these aspects.

In the past two years, as lidar technology has matured and scaled up, the cost curve has steeply declined, completing an industrial leap from "technological luxury" to "mass consumer goods," making large-scale adoption of lidar commercially viable. Taking Hesai as an example, in 2024, its lidar price will drop to around 4,000 yuan per unit, nearly a 90% decrease from 2022.

Currently, the popularization of lidar is breaking the old order of being exclusive to high-end models, with more and more lidar being installed in economy models. This will drive the transformation of intelligent driving functions from "luxury options" to "standard configurations," opening up new possibilities for the lidar market.

Preparing for the Future

Hesai's optimism is present, but for these supplier companies, the ultimate fate of the automotive industry remains uncertain. Automakers have not yet begun to earn stable profits, making it difficult for suppliers to win easily; they need to continue exploring and finding more application scenarios and product implementations to prepare for the next stage.

Hesai plans to launch a new production line in the third quarter of 2025, with an annual production capacity reaching 2 million units by the end of the year, a fourfold increase from 2024, to meet the targeted cooperation with 11 automakers, including BYD and Chery, for 120 vehicle models.

In addition to equipping lidar on vehicles with advanced intelligent driving systems, Hesai is also exploring a second growth curve in the robotics sector.

In December 2024, Hesai's monthly delivery of robotic lidar exceeded 20,000 units; the target for 2025 is 200,000 units, covering scenarios such as humanoid robots (Yushu Technology H1), industrial AGVs (BMW AFW system), and agricultural machinery (Agtonomy). Its JT series ultra-semi-spherical 3D lidar has been reduced to the size of a mobile phone, suitable for lightweight robots, and has already received six-figure orders from MOVA intelligent lawn mowers.

Although Hesai has not disclosed the gross margin of its robotics business, the gross margin of SUTENG Juchuang's robotics business reached 34.6% (higher than the 14.1% of ADAS), validating the high premium potential in this field.

The robotics sector is key for Hesai to break free from "automaker dependency." Tesla's Optimus humanoid robot plans to trial produce 10,000 units in 2025, XPeng's humanoid robot plans to achieve mass production in 2026, and the explosive demand for agricultural/industrial automation also provides a new growth pole for lidar.

Currently, not only are domestic automakers using domestically produced lidar, but domestic lidar manufacturers are also beginning to venture abroad for opportunities, which means the market will further expand.

Hesai revealed that it has reached an exclusive cooperation with a top European automaker, covering both its fuel and new energy vehicles, with the order scale being "the largest in the overseas front-loading mass production field." This not only signifies growth in the overseas market but also indicates that the intelligence of fuel vehicles will further stimulate the shipment volume of lidar Hesai's profitability also proves the concentrated explosion of China's innovative capabilities in smart hardware. From technical controversies to cost breakthroughs, from standard configurations for car manufacturers to new battlefields for robots, its growth path reveals the underlying logic of the intelligent revolution: safety is the bottom line, inclusiveness is the path, and continuous innovation is the moat.

With the acceleration of L3-level autonomous driving commercialization and the explosion of the humanoid robot industry, Chinese lidar companies are transforming from "supporting roles in the supply chain" to "global rule makers," and the ultimate outcome of this transformation may redefine the boundaries of collaboration between humans and machines