LiDAR "on board" accelerates, opportunities given to Hesai?

As the market begins to reassess the safety of intelligent driving, LiDAR, as a safety redundancy component, has once again attracted attention, bringing new opportunities for companies like Hesai.

Recently, Hesai Technology held its annual technology open day at the Shanghai Maxwell R&D Manufacturing Center. Hesai Technology founder and CEO Li Yifan reviewed the achievements of Hesai over the past year in his speech and introduced a new theme—“Safety is not optional.” He pointed out that with the rapid development of the new energy vehicle market, the penetration rate of LiDAR is rapidly increasing.

Data shows that in 2024, the penetration rate of LiDAR in new energy vehicles priced above 150,000 yuan has reached 25%, and it is expected to exceed 40% by 2025.

This trend indicates that LiDAR is gradually spreading from high-end models to more mid-range and low-end models, becoming a standard configuration for intelligent driving. Li Yifan also emphasized that the role of LiDAR in intelligent driving has shifted from a “functional component” to a “safety component.”

To further promote the popularization of LiDAR, Hesai has achieved a significant reduction in costs through scale and technological advancements over the past few years. Li Yifan mentioned that the cost of Hesai's LiDAR has decreased by 99.5% over the past eight years.

At the technology open day, Hesai Technology launched the “Qianliyan” LiDAR perception solution for L2 to L4 and officially released a new generation of automotive-grade LiDAR products: ETX automotive-grade ultra-long-range LiDAR, AT1440 automotive-grade ultra-high-definition LiDAR, and FTX automotive-grade pure solid-state blind-spot LiDAR.

“Qianliyan” sounds like “Qianliyan” (the all-seeing eye) and includes three solutions: “Qianliyan A,” “Qianliyan B,” and “Qianliyan C,” providing different LiDAR combinations for L4 and above autonomous driving, L3 conditional autonomous driving, and L2 assisted driving systems, respectively.

ETX is the world's farthest-ranging automotive-grade LiDAR, which can be mounted behind the windshield inside the cabin and achieve ultra-long-range measurement of 400 meters with a window height of only 32 mm.

AT1440 is the world's highest line-count automotive-grade ultra-high-definition LiDAR, reaching 1440 lines, equipped with Hesai's fourth-generation self-developed chip, with a measurement range of 300 meters at a 10% reflectivity.

FTX is the world's automotive-grade pure solid-state LiDAR with the widest field of view, with a resolution more than twice that of the previous generation, effectively covering blind spots around the vehicle and accurately detecting low obstacles such as road stakes and pets.

It is understood that the ATX, aimed at mid-to-high-end models, has secured dozens of model-specific collaborations with 11 leading domestic automakers, including BYD, Chery, Great Wall, and Changan, and is set to start large-scale production in the first quarter of 2025. Li Yifan stated that as of mid-April 2025, ATX has cumulatively delivered over 50,000 units In response to media questions about whether "the price of lidar can drop to a cabbage price," Li Yifan gave a clear answer: "200 dollars is the reasonable cost limit, but the value far exceeds the price." He further explained that the ultimate goal of lidar is not to replace cameras, but to serve as a safety redundancy, addressing the "one in a thousand accident probability."

Regarding the price war in the domestic market, Li Yifan admitted that competition in the Chinese market is fierce, but Hesai is raising gross margins through overseas expansion and the development of non-automotive businesses. He compared the Chinese supply chain to a "table tennis team" — domestic capabilities for volume, overseas capabilities for profit.

In the overseas market, Hesai has already established partnerships with top European OEMs, covering multiple models of both fuel and new energy vehicles, and this cooperation will extend into the next decade. "This is a long-term cooperation project that spans beyond 2030 and is the largest order in the field of overseas mass-produced lidar to date," Li Yifan stated.

In addition to the traditional automotive lidar market, Hesai has also made extensive inroads into the robotics sector.

Li Yifan revealed that Hesai's lidar products have been applied in over 40 countries worldwide, covering various niche markets such as lawn mowing robots, delivery robots, and cleaning robots. In his view, robotics represents Hesai's second growth curve, essentially a delegation of automotive-grade capabilities.

It was reported that Hesai has established close partnerships with robotics companies such as Zhuimi Ecological Chain Keting Technology, Qunhe Technology, Weita Power, Karl Power, and Jiushi Driverless Vehicles.

Liu Xingwei, Vice President of Robotics Perception Business at Hesai Technology, stated that the application scenarios for robotic lidar are very diverse, and he predicts that by 2029, the market size for robotic lidar will exceed 10 billion yuan.

Below is a dialogue between Wall Street Insights and Hesai Technology founder and CEO Li Yifan (edited):

Q: You mentioned that even if lidar costs decrease, it won't drop to a cabbage price, and there are certain thresholds for its adoption in vehicles, but you also hope that lidar becomes a standard safety feature in all vehicle models, similar to seat belts. Are these two points contradictory?

Li Yifan: The ultimate cost reduction limit of a product depends on two things. First is the physical structure; to meet functionality, there is a certain lower limit to costs. For example, the costs of seat belts and airbags will not drop to one yuan because there is a reasonable long-term cost structure. In my view, 200 dollars is a reasonable cost structure for lidar, but this does not mean that the material cost is 200 dollars, otherwise the company would incur too much loss. This was my viewpoint last year, and it still holds this year.

Second, the cost limit also depends on the comparison between the value created by the product and its cost. Some products may have high costs but low value, and will ultimately be eliminated. The good thing about lidar is that it has found this point. The value created by lidar is clearly higher than 200 dollars, especially with the development of L3 autonomous driving technology and more software enhancements, its role as an "invisible airbag and seat belt" will become more apparent. I believe that 200 dollars is a reasonable price for most consumers, and even with mass production, the cost of everything in a vehicle will not drop to one yuan Q: The evolution from L2 assisted driving to L3 autonomous driving has attracted much attention. In this process, what role can LiDAR play as a key link in the industry chain?

Li Yifan: In the L2 system, theoretically, humans can serve as a backup. Although the necessity of LiDAR is controversial, I believe having it is safer than not having it at all. Therefore, I hope everyone will not give up on using LiDAR due to cost concerns.

In the L3 system, it is generally believed that multi-sensor fusion is necessary. I have not heard of any company claiming to develop a purely vision-based L3 system. The reason is that L3 has extremely high safety requirements, and its core is multi-sensor fusion, which includes not only redundancy of sensors but also redundancy in systems such as steering, braking, and power supply. Therefore, LiDAR is an important complement to cameras; its role is not just a complete backup but rather to provide assurance in situations where the visual system cannot resolve issues. I prefer to call it a "safety net."

Q: For some products that have not yet been mass-produced but whose next generation has already been launched, how does Hesai grasp the overall timing rhythm and price relationship? Additionally, with the rapid increase in LiDAR and intelligent driving solutions in the entire intelligent driving field this year, Hesai has also planned for a capacity of 2 million. In the process of rapid expansion of capacity and demand, how do you ensure the stability of the supply chain and production?

Li Yifan: Regarding product iteration, there are indeed cases where products fail to complete development for various reasons and are ultimately replaced by new-generation products. In the fiercely competitive environment of the Chinese market, it is difficult for any company to persist in focusing solely on a single product. Customer demand changes rapidly, and we have done relatively well in this regard in the past. Whether in terms of technical routes or product iterations, we strive to ensure that our product strength is sufficient to adapt to the constantly changing needs of customers. If we merely cater to customers, the product may fall into chaos. The key to solving problems lies in establishing a strong core platform, the capabilities of which will not change due to shifts in customer demand.

The 2 million is not our forecasted shipment volume for this year but rather our capacity planning. If demand reaches 2 million, we can achieve this goal within a few months. Automakers typically do not require a fivefold increase in capacity overnight; they will provide us with a certain preparation period, and a few months is enough to respond. Additionally, our customer distribution is quite broad, which also provides us with buffer time.

Capacity planning mainly involves production capacity rather than supply chain issues. Increasing production lines and replicating existing models is not difficult for us. After years of development, we have established mature production capabilities, and we are not worried about this