Lidars work like eyes that can see 360 degrees, and many automakers use them to build 3D maps of the vehicle's environment. On the way to the mass use of lidars, however, there are certain problems and difficulties.
Automotive lidar applications emerged following the DARPA Grand Challenge held by the US Department of Defense Advanced Research Projects Agency (a competition aimed at developing self-driving vehicles). The lidars were presented in a second competition in 2005. Two years later, five of the six participating vehicles were equipped with roof-mounted lidars. Since then, lidars began to develop very quickly, and according to forecasts of the research company Yole Development (Lyon, France), it is the automotive market that will contribute to their development.
“The lidar market for ADAS will grow 114% year over year, from $ 19 million in 2019 to $ 1.7 billion in 2025,” says Alexis Debreu, market and technology analyst at Yole. Expectations are very high, but the lidar market is facing a number of challenges right now and needs to be bold.
Prices are falling, but supply volumes are very small
Historically, lidar systems have been too expensive to mass produce and integrate into consumer vehicles. Things are changing now: lidar manufacturers have started to act aggressively, and prices have dropped significantly over the past three years.
Last year, Luminar announced lidar systems that will cost less than $ 1,000. Velodyne, which developed the first real-time 3D lidar in 2005, said its products would cost around $ 600 by 2024 (up from $ 17,900 in 2017). In turn, Chinese companies (whose products are about five times cheaper) are bringing devices that cost less than $ 1,000 to the market, and their market share is growing.
However, a drop in prices does not mean an increase in production. To date, the volumes have not grown significantly, as well as there is no mass integration of lidars. “Lidars must meet the needs,” Debre says. “In the industrial market, which also includes manufacturing and logistics, there is a trend towards automation, and lidars play a significant role in it. $ 600 per sensor is still a big sum for the American auto industry, especially when compared to ADAS cameras, which cost roughly $ 80 apiece. This is why we are now hearing about short-range vehicle lidars that will cost about $ 100. ”
However, Velodyne's plan involves some risk. Debre said that "change is needed and the car market and industry need price cuts."
Many start to cooperate, but the pressure grows
Based on an analysis of the partnerships between lidar manufacturers and automakers, Yole predicts that 3.2% of vehicles will have lidar systems installed by 2025.
The pioneers were Audi and Valeo - in 2017, the Valeo SCALA LiDAR system was integrated into the Audi A8. Valeo's lidars are now used in the Audi A6, A7, Q7 and Q8. Valeo has also partnered with Mercedes, and their recent S-Class uses the SCALA 2, a second generation lidar system.
Later, there were partnerships between Innoviz and BMW, Luminar and Volvo, Velodyne and Hyundai, and Ibeo with Wall Motors. “This is just the beginning and there will be more partnerships in the future,” said Pierrick Boulet, a technology and market analyst at Yole.
The industry is consolidating. In addition to the partnerships between manufacturers and Tier-1 / OEM manufacturers, it is worth noting the fact that some lidar companies have been bought by Tier-1 suppliers. Continental acquired ASCar, a division of Advanced Scientific Concepts, in 2016, and self-driving car startup Aurora Innovation acquired Blackmore in 2019. In 2018 ON Semiconductor acquired SensL Technologies and Luminar acquired Black Forest Engineering.
However, Debre noted that "it is not yet clear which strategy will be the winning one, and what size the market needs to reach in order for many acquisitions to occur."
The global auto industry is indeed facing significant pressure. The emergence of networking technologies, self-driving systems, car sharing and electric vehicles (CASE technologies) opens up great opportunities for car companies. All automakers will have to choose the right direction to prioritize and meet customer preferences and requirements. Boule states that "the industry is now gripped by electrification and self-driving systems." Since 2009, the EU has introduced emission standards for new cars. CO2 emissions are expected to decline on average by 15% by 2025 and by 37.5% by 2030. These reductions can be re-read at 95 g / km in 2021 and 81 g / km in 2025. “A lot of research and engineering work is needed to electrify transport,and some equipment makers may curtail their self-driving efforts as a result, ”Bule added.
However, companies need to be careful, since it's not only lidars that are being refined and developed. Bule noted that ultra-high-resolution radars are emerging, and thermal cameras may also appear. "Lidars are still expensive, more than 10 times more expensive than cameras and radars, and if OEMs can find cheaper lidar performance solutions, they will accept them."
Some automakers do not use lidars at all - they rely on combining sensors and AI computing to achieve high-level automation. Tesla is the most prominent among such companies. Its CEO Elon Musk argued at Autonomy Day in April 2019 that "only fools" would be engaged in lidars. "Those who do lidar are doomed," Musk said. "These are expensive and unnecessary sensors."
Bule believes Tesla's methods are worth following closely. “They are taking a lidar-like approach. Their vehicles use cameras installed around the entire body, and from their images a three-dimensional representation of the environment is built. " AI computing is used to analyze the markings and predict the behavior of other vehicles. Boulet added that "their system analyzes not only images, but individual pixels to estimate the depth of each one." Toyota also uses similar methods and technologies.
Musk is undoubtedly a notable thinker who can have a significant impact on the industry. The Tesla Model S was the first car with self-driving features. Boulet said Tesla's Autopilot is “a big step towards self-driving cars,” but added that “there have been many accidents since its release as a result of misuse of the system. The drivers relied too much on ADAS. "
The death of pedestrian Elaine Herzberg in 2018 (hit by a self-driving Uber) “opened the eyes of OEMs, Tier-1s and Tier-2s,” Boulet said. They realized that creating a self-driving car is much more difficult than previously thought, and that "it will take decades to develop complete self-driving systems."
Debre noted that Musk is not a complete opponent of lidars: SpaceX, Musk's other company, relies on DragonEye lidar for its Dragon and Crew Dragon ships. Debra has one question for Musk: "Why can't humans enjoy security on earth as much as they do in space?"
The market is shifting, but use cases are still limited
The lidar market is dominated by two traditional survey companies: Trimble and Hexagon. Thanks to technology and business models, these well-established players face significant competition from newcomers. Debre said it might even be possible for these companies to acquire other lidar manufacturers when the situation clears up.
The German company Sick has established itself well in the field of lidar production for industrial automation. “They're probably under more pressure from newbies, although they still have products well suited for industrial applications,” Debre said. "New lidar companies must challenge them with either cheaper or better performance solutions." When asked about companies that influence the market, Debreu pointed to Oyster, a San Francisco-based lidar startup that emerged in 2017. Their capitalization has recently grown to $ 140 million. Oyster is specific about developing lidars based on technologies available in the consumer market - vertical cavity lasers and single-photon avalanche diodes. There is also a newcomer company Valeo on the market,which also reports its profits from the lidar market.
Velodyne and Luminar have announced their intention to go public by the end of this year. Debre said that "at some point these companies will have to make money, and this will greatly affect the state of affairs in the lidar market."
Chinese lidar manufacturers such as Hesai, Robosense and Surestar are also continually growing and expanding their product range. They make money not only from the discounted prices of lidars, but also from numerous public projects in the field of unmanned vehicles.
Many unmanned vehicle developers are showing great interest in lidars. Mobileye, a division of Intel, develops its own lidar, and Waymo is the only commercially available lidar company in the market.
Overall, the lidar market is changing. Sensor prices are declining and will continue to decline in the coming years. All this should contribute to the introduction of lidars into cars.
But the market also needs diversification, new lidar models with specialized characteristics for different applications, as noted by one of Yole's analysts.
Boulet noted that “lidar development is closely tied to the use cases that OEMs want to implement. There are no lidars available for multiple applications. The characteristics and placement of lidars are determined by the application or use case. " As an example, he cited highway driving, which would require long-range, low-angle lidars placed in the center of the vehicle, while parking or urban scenarios would require short-range, high-angle lidars placed on the sides.
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