Shulou(Shulou.com)11/24 Report--

Original title: "Lidar, is it our turn to get stuck in the neck of the United States?" "

After the chip, lidar has become another hot word in the automobile industry chain.

On February 6th and 7th, the lidar company Suiteng Juchuang announced successively that it had won the production orders of FAW Toyota and Cyrus. This is the first time that domestic lidar has entered the Toyota supply chain system, which is famous for its strictness and fineness. Prior to this, most of the head lidar companies cooperated extensively with domestic brands and new power car companies, but there was no Chinese lidar in most of the world's best-selling car brands.

On February 9, Wesai Technology officially landed on NASDAQ and won the title of "the first unit of domestic lidar". The Wesai IPO is priced at $19, the upper end of the previously given range, and its shares rose nearly 15% on the day of its IPO, with a market capitalization of $2.6 billion. This is the largest IPO for a Chinese company in the United States since Didi listed in the United States in July 2021. According to the prospectus, Wesai Technology shipped more than 80400 lidars in 2022, ranking first in the world.

Photo Source: prospectus it is also the first company in the world to deliver more than 10000 lidars per month. In the first nine months of 2022, Wesai was the world's largest lidar company by revenue, more than 3.6 times higher than second place, according to the Frost & Sullivan report.

In addition, the news of the listing of Wesai Technology has led to the rise of Ju Guang Technology and Changguang Huaxin, the A-share lidar industry chain, for several consecutive days.

Photo Source: Frost & Sullivan coincidentally, a few days ago, the Ministry of Commerce just issued a notice on the revision of the catalogue of China's prohibited and restricted Technologies (hereinafter referred to as the "catalogue") for public consultation, proposing to add seven new technologies that prohibit or restrict exports, among which lidar technology is impressively listed.

With the superposition of several pieces of news, some people can't help but interpret it as using the foreign "neck" of the laser radar card while allowing enterprises to list in US stocks to earn foreign money. Around this phenomenon and discussion, this paper mainly answers the following three questions:

1. Lidar is a common technology application in the global smart car market, so why is its export restricted?

2. Will the export restrictions affect the commercial layout of domestic lidar manufacturers such as Wesai Technology?

3. Will the form of domestic lidar enterprises be good in the future?

1. The name of the "lidar system" appears in the newly revised "catalogue" of the Ministry of Commerce and the Ministry of Science and Technology, along with the remaining six technologies in the field of chip semiconductors and genetic engineering. It has become a technology that restricts exports, and can appear together with the latter two aspects of technology, which shows how much the country attaches importance to lidar technology.

But in fact, vehicle lidar was developed in the United States. When did it become a dominant industry in China?

It is well known that Velodyne invented the multi-beam rotating lidar in 2006 and applied it in the autopilot challenge funded by DARPA, an agency of the US Department of Defense. With the rise of the self-driving industry, Velodyne's 64-line mechanical lidar has become standard for almost all self-driving test cars. Because it is difficult to get a machine, its price was once speculated to more than one million yuan.

China did not begin to develop the vehicle lidar industry until before 2014. Suiteng Juchuang and Wesai were established in that year.

The turning point came in 2017.

That year, there was a landmark event in the field of on-board lidar-the first mass production car equipped with lidar came on the market. This car is the new Audi A8, and the supplier that provides it with lidar is Valeo. Unlike mechanical lidar products for self-driving technology companies, Valeo provides Audi with a semi-solid lidar that is easier to pass the rules of the car.

Here to popularize a background of lidar technology route evolution, if divided according to the scanning method, the industry generally believes that the technology evolution route is: mechanical-semi-solid-pure solid.

If the core of the first war is the mechanical lidar insisted by Velodyne, the second war will focus on semi-solid lidar. Suiteng Juchuang and Wesai Technology have both chosen the layout of semi-solid lidar.

Hosai Technology has released the blockbuster product Pandar40, which has an outstanding performance-to-price ratio and directly fights against Velodyne's star product HDL-64E. Suiteng Juchuang completed the mass production of 32-line products in September 2017 after the launch of 16-line mechanical lidar, quickly seizing the low-wire harness market.

Compared with domestic suppliers, Velodyne also has a weakness, that is, it does not set up warehouses in China, only arranges marketing and sales personnel, and it takes 1 to 3 months for products to be repaired at a time, while Chinese suppliers can replace them with new ones in 1 or 2 days.

In this way, suppliers led by Wesai Technology and Suiteng Juchuang clamped back and forth on Velodyne, grabbing orders crazily from Velodyne with lower value and better service.

Velodyne contemplated a listing in 2019, then did not plan to struggle in the Chinese market and began to bring its business back to its main battleground. But what Velodyne did not expect is that the Chinese market, which it strategically abandoned, will become the core battlefield for lidar boarding in two years' time.

In retrospect, Velodyne's collapse in the Chinese market is not surprising. In the more than a decade since Velodyne invented the vehicle lidar, its shipments have been growing slowly, reaching 15000 units in 2021. The annual production capacity of Chinese company Suiteng Juchuang has reached 1 million units, and the current monthly shipment volume of Wesai has exceeded 10,000 units. Obviously, the Chinese lidar company has shown great technical strength and market potential on the world stage.

According to the 2022 Lidar Application report in Automotive and Industry released by the world-renowned market research and strategy consulting company Yole Development, Wesai Technology has become the world's number one lidar company in the automotive field; in the field of self-driving taxis, it ranks first in the world with an absolute advantage of 58% market share, jumping to the sixth place in the world.

China is vigorously supporting the development of new energy vehicle industry, and the market scale and technical value of lidar will continue to grow at that time, so it is necessary to plan lidar in advance. And predictably, with the iterative upgrading of technology and the continuous decline of prices, domestic lidar may also be able to pry into a larger market except self-driving.

In this context, lidar technology export restrictions also send some signals: in the new situation, whether it is micro-market or macro-control, they all hope to compete for more discourse power under the wave of intelligence.

2. Close the door before opening the window since the release of the catalogue, there has been a heated discussion in the industry, and some people wonder whether this means that Chinese companies can no longer export car lidars abroad. Some people are even worried that it will affect the future development of domestic lidar manufacturers. Che Baizhi Ku synthesizes the views of people in the lidar industry, such as "Lidar Laoguer", and draws the following conclusions.

With regard to the export of lidar products: the so-called export restrictions restrict technology, not products. In other words, as long as technology exit is not involved, there is no need to worry too much about the normal sale of products. Therefore, it will not have a material impact on the medium-and short-term performance of the relevant companies. In terms of export, the relevant enterprises only need to carry out the procedures to obtain a license. As for the difficulty of applying for export license and the speed of examination and approval, we still need to see the further notice of the Ministry of Commerce.

With regard to the commercial layout of domestic lidar manufacturers: if Chinese lidar companies want to establish core technology research and development bases and machine assembly companies overseas, they only need to go through relevant administrative procedures and obtain export licenses to meet the requirements of the regulatory authorities. According to the "Lidar Laoguer" learned from relevant policy experts: "as long as sensitive technologies that do not involve national security and cutting-edge technologies that are protected by the state are key, as far as simple civilian technology products are concerned, they will not be prohibited."

For Chinese lidar companies with on-board business overseas, if overseas customers, especially those of automobile companies, require to set up local production lines, it will undoubtedly be restricted, which will affect the actual landing of the business, and the relevant companies need to deal with it in advance. However, according to a senior executive of a famous company, "the regulations of the Ministry of Commerce will have an impact on our direct R & D and manufacturing in the United States." but in fact, we don't have such a plan. "

On the significance of restricting the export of lidar technology: relevant policy experts said that the original intention of this policy is to protect national security and maintain the healthy development of the domestic industrial chain. Such policies are not only routine management measures of large countries in science and technology. It is also a common law in the high-tech field, and it is not aimed at individual lidar items. Civil vehicle lidar does have high technical homology with some military laser systems, but before a clear pattern of technological innovation is formed, it is necessary for national security to ban / restrict the export of related key technologies.

To put it simply, the state does not restrict lidar companies to make money abroad, and exports have always been encouraged by the government. However, the state should restrict the transfer of advanced technology abroad through trade and investment, so as to prevent foreign enterprises or institutions from acquiring Chinese lidar technology.

3. Lidar = car standard? At present, the starting point of the lidar is clear, but the end point is unknown. The fact that Chinese lidar enterprises actively reduce costs and launch semi-solid and solid-state lidars to find market space does not mean that they have passed the test of life and death. It is better than Wo Sai, and it has not yet got rid of the loss situation.

According to later Auto, Wesai's gross profit margin has continued to decline in recent years, from 70.3 per cent in 2019 to 44 per cent in the first three quarters of 2022. The unit price of the AT128 radar sold to ideal and other car companies is about a few thousand yuan, which is only about 1/5 of the average radar price. As the proportion of radar sales of production cars increases, the gross profit of Wesai will decline further.

Thus it can be seen that while the lidar industry is moving forward, it still faces some challenges that cannot be ignored. According to the Chebai think tank, it is mainly reflected in the following two aspects:

First, the reliability of semi-solid lidar has not been fully verified, and iterative products need to be innovated continuously.

Up to now, there is no consensus on the technical route of each sub-module of lidar. There are different routes in five aspects: ranging principle, laser emission, laser reception, beam manipulation and information processing. Based on the combination of these alternative technical routes, a lot of technical solutions will be derived.

At present, the lidar on a large scale is still mainly semi-solid lidar, and there are still rotating parts in both macro and micro sense, which leads to great uncertainty in the reliability of vehicle lidar. Coupled with the fact that most of the mass-produced passenger cars equipped with lidar will be delivered in the second half of 2022, the reliability problems have not been fully exposed.

Second, China's lidar industry has a potential enemy-Tesla.

As we all know, Musk adheres to the "pure vision" scheme, which relies heavily on cameras and does not use lidar. Although in some extreme scenarios, camera recognition will be interfered, which is not as accurate as lidar. However, the cost of the camera is lower than that of the lidar (the difference between RMB 600 and RMB 6000), and it is easier for individual consumers to accept.

So the longer-term challenge for the lidar industry is whether it will become standard for cars, and what is its ultimate permeability?

Because as long as we return to the market, what we compare is not whose technology is more advanced, but who can make the cost lower on the premise of meeting the technical demand. The lidar SCALA, the first lidar to meet the requirements of the car, cost as much as $20, 000 and was equipped with millions of luxury cars. Today, with the lidar installed on China's mainstream new energy vehicles, the purchasing budget of car companies is about 1000 US dollars.

Obviously, our country has done a good job in the industrialization of technology. Under the premise that the technology is available, it can not only do a good job in the quality control, cost control and size control of the lidar, but also ensure the continuous iterative upgrading, cost reduction and efficiency improvement of the products. Take Wesai's solution, which essentially does not take advantage of reduced-dimensional strike technology, but chooses a relatively mature route as much as possible (semi-solid + 905nm + line spot + rotating mirror one-dimensional scanning), but the average price of lidar products sold in the first nine months of 2021 and the first nine months of 2022 fell from $8000 to $3100.

This can also explain why so many overseas head enterprises fell on the eve of the lidar outbreak. Because they failed to get orders within a development cycle, and at the same time they had to invest in high-intensity research and development, they could not continue to supply blood in the long run, so they had to go out of business.

Therefore, in the view of Chebai think tank, there are two key points for Chinese lidar enterprises to break through the tight encirclement:

First of all, it is necessary to continuously improve the reliability of lidar and establish a stable supply chain system and production system to support its large-scale mass production; secondly, enterprises should constantly reduce costs and increase efficiency, and actively lay out the next generation lidar technology.

[full text reference]

[1] "the market performance of lidar at home and abroad is very different", Caixin net, an limin

[2] "Trade countermeasures? The Ministry of Commerce issued a document to restrict the export of lidar system. ", car, Xu Shanshan."

[3] "Lidar 2022: walking in tuyere, foam and Hope", Caijing, Guo Yu

[4] "China plans to include seven technologies such as lidar in the list of prohibited / restricted export technologies! ", lidar old gun, Chris

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus). Author: Zhou Shuangjiang.

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