More than 100 companies around the world are vying for a piece of the lidar market. Each one claims to have their own approach, technology, pricing or features that make them uniquely qualified to be the lidar of choice for AV developers, Tier 1s and OEMs. Investors continue to flock to this promising sector, injecting billions of dollars with the expectation of a large lucrative market in five or ten years. Let’s take a look at how the market is progressing, and a few of the major players that are adopting lidar first.
Part two of a two-part series. You can find part one here.
Luminar and Volvo
Volvo announced in June 2021 that their 2022 all-electric successor to the XC90 series will come with lidar and an NVIDIA Orin AV driving system. That same month, shares of Florida-based Luminar rose 13% when Volvo announced it would use Luminar’s lidar technology as standard equipment on the new EVs. According to Luminar founder and CEO Austin Russell, Luminar is working with Volvo subsidiary Zenseact to create a “holistic autonomous vehicle stack” for production vehicles. Volvo will be Luminar’s first OEM customer.
The 550-person Zenseact team has been developing ADAS and software systems after Zenseact ended its joint venture with Veoneer. Their Sentinel AV stack will integrate the Zenseact OnePilot AV software solution with Luminar’s Iris lidar, perception software and other components to handle highway autonomy. It includes safety measures that can proactively avoid collisions with evasive maneuvers to dramatically reduce traffic accidents.
The Takeaway: In an interesting twist, Zenseact CEO Ödgärd Andersson said they plan to also offer this AV technology stack to other automakers. This compares to almost all other OEMs that are keeping their platforms proprietary. It will be interesting to see if this “open platform” approach stimulates more development and sales than the proprietary approach. One thing is for sure: The Volvo agreement is a big win for Luminar, which would benefit from being part of a nonexclusive platform that can be adopted by multiple companies.
Seattle-based MicroVision has been working since 1997 to develop MEMS laser beam scanning and projection technologies. It has built a large portfolio of patents, and produces one of the most advanced lidar solutions in the market. The company reportedly has been receiving royalties from a large technology company since April 2017. Rumors are that Microsoft is using a MicroVision projection module in its HoloLens augmented reality headset.
Despite having some of the best resolution and range in the lidar space, MicroVision has yet to acquire a customer in the automotive sector. One reason may be the estimated selling price of $1,000 per sensor. Competitors, albeit with lower technical specifications, are coming in at $500 per unit. Another factor may be the MEMS-based approach. A number of companies have solid state solutions that are smaller and less expensive.
The Takeaway: MicroVision may serve as a cautionary tale for the lidar sector. Even with its long history, outstanding technology and a deep patent portfolio, it has struggled to achieve mindshare and market share. In fact, its long history could be part of the problem. Younger startups are basing their lidar solutions on cutting-edge technology that threatens to unseat more established companies like Velodyne.
MicroVision’s fortunes could turn in an instant if it signs a large customer or is acquired by a major player. If not, it will need to reduce the cost of its sensors and continue finding other markets for its MEMS technology as it has done for the past 14 years.
Valeo, Audi, Honda and Mercedes
The 2018 Audi A8 apparently was the first production car with a lidar sensor, and those were manufactured by Tier 1 supplier Valeo. This gives France-based Valeo the distinction of being the first lidar company to have its technology included in a mass-market automobile, a single, forward-looking lidar sensor in the A8. Audi planned to offer Level 3 autonomous features to customers in its 2018 A8 model, but had to turn off that functionality since regulations in Germany and the U.S. did not allow it.
According to Valeo, more than 100,000 of its sensors are now on the road. In addition to the Audi A8, Honda used the five first-gen SCALA Valeo lidars in each of its 2021 special edition Level 3 Legend Hybrid EX sedans for the Japanese market. Mercedes reportedly is planning to use one Valeo lidar in the new S-Class and EQS models later this year for the German market. In early 2021, Valeo reportedly was slated to supply lidar for Hyundai Genesis models in 2022. However, there is no recent news to confirm this.
Valeo is ramping up its second-generation SCALA sensor in preparation for mass production starting in October 2021. The sensor will be used in Level 3 systems and will include only one forward-facing lidar.
The Takeaway: As one of the world’s leading Tier 1s, Valeo has won many design awards for its advanced lidar systems and has ranked as the top applicant for French patents for the past three years. The first lidar company to already be in mass production, Valeo has multiple major OEM customers, and plans to produce 1 billion lidar sensors over the next five years. It is a powerhouse of innovation, production and sales, so expect to see more OEMs added to its list of customers as its success attracts more success.
Velodyne, Faraday Future and Gatik
Velodyne, the company that literally invented 3D lidar, dominated the lidar space until the past few years. Back in the day, they were able to charge as much as $10,000 to $70,000 per lidar because they had a near monopoly in the space.
That position has rapidly changed in a relatively short time as startups in the U.S., EU, Israel and China have entered the fray to grab a piece of the lidar market. These new entrants base their lidar on MEMS, flash and silicon technologies, in comparison with Velodyne’s legacy spinning laser lidar. Velodyne has managed to catch up with the field with the unveiling of its new compact H800 solid state lidar sensor in November 2020.
The San Jose, CA-based company has snagged at least one OEM customer with an exclusive contract to provide lidar for Faraday Future’s FF 91 luxury EV. The FF 91 will include an AV system that is designed to deliver highway, urban and parking driver assistance and automation. The FF 91 is slated to use the Velarray H800.
Velodyne also has announced a multiyear sales agreement with Gatik, a leader in automating on-road transportation networks for B2B middle-mile logistics. Gatik uses Velodyne’s Alpha Prime and Ultra Puck lidar sensors for real-time AV operations in its Class 3-6 trucks. The company already operates a commercial AV trucking service fulfilling autonomous orders for customers in the U.S. and Canada, including Walmart.
The Takeaway: Although Velodyne was the first with 3D lidar, it stumbled a bit to catch up with numerous startups that offered newer, faster, better, cheaper lidar solutions. A number of these startups grabbed contracts with or were acquired by OEMs and Tier 1s, threatening Velodyne’s dominant and established position. However, it managed to fight back by reducing costs and developing compact solid state lidar sensors to remain competitive. Velodyne remains a solid leader in the lidar sector with diversified markets beyond just automotive, including robots, drones, smart cities, mapping, security and industrial. This can be a warning to remind companies to remain nimble, and to diversify into other markets when feasible.
Some companies are developing or acquiring lidar technology to bring it in-house to cut costs and provide a competitive edge. General Motors subsidiary Cruise acquired lidar developer Strobe to reduce costs. Aurora, which provides a full-stack AV platform, acquired Blackmore, a startup that pioneered frequency-modulated continuous wave (FMCW) lidar, which some consider to be the next generation in lidar technology. Blackmore lidar is used in Aurora’s AV trucking platform to detect objects at a distance.
Intel subsidiary Mobileye is said to be developing its own FMCW lidar for use in AVs beginning in 2025. Google spinoff Waymo developed its own lidar based on spinning lasers and named it Laser Bear Honeycomb. The technology was designed for use in Waymo AVs and for sale to non-competing companies. However, Waymo announced in August 2021 they would no longer sell lidar sensors to other companies.
Expect to see progressively more OEMs to include lidar in passenger vehicles and trucks over the next few years. This is being driven by vehicles equipped with ADAS and AV features as OEMs compete for customers and market share as well as superior safety records. Lidar is seen as the next step to improve ADAS and to enable AVs that are reliable and safer than human-driven vehicles.
The lidar market is expected to expand rapidly as lidar prices fall and vehicles become more intelligent, and as increasing levels of autonomy require improved sensors to deliver the safety that owners and governments demand. Prices are expected to fall to the $500 range in the next few years, followed by a $200 price point, and eventually the holy grail of the sub-$100 lidar sensor. This will happen as more lidars are manufactured and as lower prices and enhanced capabilities allow more of them to be used per vehicle.
Lower prices are being realized as developers innovate to reduce the cost of their sensors and as manufacturing volumes begin to produce economies of scale. This is an area of intense competition as each lidar company seeks to reduce the cost of components and manufacturing. A number of companies are miniaturizing their sensors with a system on chip (SoC) design that reduces costs, power requirements and size while increasing data rates and reliability.
This is an exciting sector with companies announcing new innovations every week. All are contributing to a future where our vehicles will be able to see and make sense of the outside world.