How can Hesai Technology continue?

Capital ebb, mass production crisis, the future of laser radar is not as clear as expected.
In the era of intelligent electric vehicles, laser radar exists as a key sensing sensor for automatic driving. In addition to Musk’s firm disapproval of laser radar, almost all major domestic automobile enterprises and automatic driving companies regard laser radar as the only way to advanced automatic driving.
In fact, there is demand, there is market. With the increasing penetration of new energy vehicles in China, the voice of intellectualization is also rising. The spring of laser radar is coming soon.
In 2021, Xiaopeng P5 came into the market, marking the “first shot” of laser radar mass production. Later, Weilai ET7, ES7, ET5, ideal L9, L8, L7, Xiaopeng G9, and modified P7 are all equipped with laser radar.
Of course, in addition to Wei Xiaoli, Jihu, the Great Wall, Avita, Gaohe and Jidu are also loyal supporters of laser radar.
The fire of collecting firewood is high, and the car enterprises are flocking to it, and the speculative bets of superimposed capital promote the cake of laser radar to become bigger and bigger.
The first to receive dividends is the laser radar manufacturers. With the “enthusiasm” of the market, Velodyne, Luminar, Innoviz, Ouster, Aeva, AEye, Cepton and Quanergy, eight laser radar companies, have successively landed in the US stock market.
As for the domestic laser radar enterprises, they are also unwilling to leave behind.
At present, in the domestic vehicle-mounted laser radar market, the companies that have the right to speak basically include: Hesai Technology, Sateng Juchuang, Tudatong, Dajiang, Huawei
Among them, Hesai Technology, which has won the cooperation of many automobile enterprises such as Ideal, Gaohe, Xiaomi, Zero Run, Aichi, Jidu and Chang’an, and has a monthly shipment of 10000 laser radars, is definitely a typical Chinese laser radar manufacturer.
However, it is a pity that Hesai Technology missed the IPO in 2021.
01
IPO, honey or poison?
At the beginning, Hesai Technology was not a professional laser radar manufacturer, but also related to laser technology.
In 2013, Sun Kai, Li Yifan and Xiang Shaoqing, who also wore the American Ivy League halo, came together by chance and decided to work together to build a “Bill Dollar company”. Since they were founded in San Jose, the largest city in Silicon Valley, the company was named “Hesai Technology”.
In 2014, Hesai Technology returned to China and started with the laser gas telemetry system, and successfully won the order of the largest private gas group in China. However, it is obvious that only doing gas detection business is not enough to support a “billion dollar company”.
At the right time, the auto driving industry began to show its edge, and Hesai Technology turned its attention to another market – laser radar.
In October 2016, Hesai Technology officially released the first 32-line laser radar, which entered the Jianghu for the first time; In April 2017, Hesai Technology launched the 40-line lidar Pandar40, which was compared with Velodyne’s HDL-64E, breaking the monopoly of foreign lidar manufacturers.
Since 2018, Hesai Technology has successively released Pandar40P, Pandar64 and Pandar128, which are matched with two short-range blind lidars of QT series. With cost-effective and reliable performance, Hesai Technology has received orders from major driverless companies at home and abroad.
The turning point is in 2021. In January of this year, Hesai Technology officially submitted its IPO prospectus on the Science and Technology Innovation Board and was accepted by the Shanghai Stock Exchange. According to the prospectus, Hesai Technology plans to raise 2 billion yuan, including 1.2 billion yuan for the intelligent manufacturing center project, 650 million yuan for the laser radar exclusive chip project, and 150 million yuan for the laser radar algorithm research and development project.
However, it is regrettable that the post-IPO process of Hesai Technology was terminated after only two months, and its biggest problem is “listing with disease”.
Hesai Technology has three problems. The first is that it cannot make profits.
According to the prospectus, the revenue of Hesai Technology from 2017 to 2019 was 19.474 million yuan, 133 million yuan and 348 million yuan respectively, and the revenue in the first three quarters of 2020 was 250 million yuan. However, despite a good revenue, its net profit is negative all the year round. From 2017 to 2019, the net profit of Hesai Technology was – 24.27 million yuan, 16.11 million yuan and – 150 million yuan respectively, and the loss amount in the first three quarters of 2020 reached 93.8 million yuan.
Perhaps because of the high investment in research and development, Hesai Technology fell into the dilemma of not being profitable. But in addition, there are two other diseases that affect the listing of Hesai Technology——
One is the “lacy news” of Sun Kai, the chairman of the board, which led to his loss of the chairman status of Hesai Technology; The second is the patent dispute between the company and Velodyne. In addition to the patent license compensation fee of 160 million yuan, from 2020 to 2022, Hesai Technology also needs to pay a fixed amount of patent license fee every year.
The “lace” gossip is not much to say, but the patent lawsuit between Hesai Technology and Velodyne is a big hidden danger. According to the prospectus, the company’s Pandar40P and Pandar64 products accounted for 99.8% of the revenue. It is these two products that make Hesai Technology fall into a war of infringement with Velodyne.
From the perspective of the current foreign laser radar enterprises, whether it is the bankruptcy of Ibeo, the founder of laser radar in Germany, or the incomparable Velodyne forced to merge with Ouster, which superimposes the general environment that the share price of listed laser radar companies has dropped by more than 80%, which belongs to the turbulence of the laser radar industry, has come.
The first thing to collapse is the capital foam. From this perspective, it seems that Hesai Technology’s initiative to terminate its listing is a blessing in disguise. But now the problem is that the funds of listed laser radar companies have problems. Can Hesai Technology survive? Where does the money come from?
02
The future of laser radar is still unclear
The basic situation of Hesai Technology is not bad. According to Yole Intelligence data, as of July this year, Hesai Technology is the best seller of the world’s vehicle-mounted laser radar, accounting for about 27% of the market share. In terms of revenue ranking, Hesai Technology is also the world’s largest laser radar company with total revenue.
It is conceivable that, in addition to the competitive advantages in the field of self-driving taxis, China’s new energy vehicle market is undoubtedly a huge contributor to Hesai Technology.
There is no doubt that the broad passenger car market is the key to the decisive battle of the laser radar company compared with the application scenarios such as Robotaxi. Therefore, laser radar companies must face three mountains: cost, performance and mass production capacity.
In terms of cost, Huawei has previously announced that it plans to reduce the cost of laser radar to US $200 (about 1276 yuan) or even US $100 (about 638 yuan) in the future.
However, the current situation is that some insiders revealed that the laser radar manufacturers are giving the designated mass production projects to the automobile enterprises. The general price is in the range of 500 to 1000 dollars. According to the different mass production, the final price range will be negotiated.
As for Huawei’s $200, laser radar manufacturers want to do it, but still can’t do it. The same is true of Hesai Technology, the first in the world.
So, how can we reduce the cost of a single laser radar? Either mass production on a large scale and spread the cost; Either through product integration, chip, etc., with the help of structural innovation, cost reduction.
Specifically, the performance of the laser radar depends on the transceiver module, the reliability depends on the scanning module, and the cost is mainly determined by the two. Therefore, in addition to the relatively general transceiver module technology, the scanning module has become a technical moat.
The solid state scanning of Flash and OPA, and the semi-solid scanning of rotating mirror, prism and MEMS galvanometer are all visible mainstream technology directions at present. And whether it is the M1 of Sato, the Falcon of Tudatong, or the AT128 of Hesai Technology, all have their own unique technology.
Taking AT128 as an example, it uses a new VCSEL array on the light source, pursues the semi-conductor of parts and components, and minimizes moving parts, which is conducive to product reliability. In addition, based on Flah technology, Hesai Technology also launched the blind-filling laser radar FT120, and the product matrix is directly aligned with scenes such as Robotaxi.
However, the question exposed is, what is the next evolution direction of laser radar? Can blind laser radar compete with cameras, millimeter wave radar and other sensors with high cost performance? In the future, will laser radar be a necessity for automatic driving?
There is no denying that Hesai Technology has certain production and manufacturing capacity. After all, it can deliver 10000 laser radars per month. However, it is always difficult to explain a business logic: why would car companies abandon cameras and choose a more expensive blinding lidar?
Safety redundancy is essential; But excessive redundancy is actually a manifestation of cutting leeks. As far as laser radar is concerned, Musk has already said that “which car enterprise depends on laser radar is a dead end”.
Such a view is indeed biased, but if the laser radar can not achieve cost reduction after years of technology accumulation, but indulge in telling stories and drawing big cakes to the industry market, then the result will not be very good.
In other words, what Hesai Technology is facing is not only the competition between friends, but also the recognition and understanding of laser radar by car companies themselves.
The dispute over automatic driving has a long history. Both the pure vision solution led by Tesla and the fusion solution centered on laser radar have their own advantages and disadvantages. But it is precisely because of this situation that no one can guarantee that laser radar will be the only way for automatic driving.
Just like the high-accuracy map pursued by major auto companies in the early stage, when the intelligent driving ability of auto companies is no longer limited by it, they will certainly be optimized and throw away the “crutch”, and laser radar is no exception.
At that time, where should laser radar manufacturers go?
Zhang Zhidong
What a great writer,
It’s just writing
One-sided.