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20 Aug 2024
Chinese lidar company again lowers full-year sales expectations, but highlights stronger financial resilience.
Hesai Technology, the Shanghai firm rated by analyst Yole Intelligence as the world’s biggest supplier of automotive lidar sensors, has once again revised down its full-year sales expectations because of customer production push-outs.
Reporting sales revenues of RMB 459 million ($63 million) on the shipment of just over 80,000 lidars in the June quarter, CEO David Li and colleagues now expect annual revenues of between $280 million and $320 million this year.
That compares with guidance in March suggesting annual sales would be higher than $400 million, a figure subsequently revised down by $50 million in May.
Robotaxis
Speaking during an investor conference call discussing the latest results, Li chose to highlight increased customer traction in China and Europe, contrasting that with business in the US where Hesai has been impacted by the Department of Defense’s accusations of affiliation with the Chinese military - something Hesai vehemently denies.
“As a global lidar leader, we are playing a pivotal role in the explosive growth and large-scale commercialization of China’s robotaxi market, evidenced by our selection as the exclusive long-range lidar supplier by all the top-five robotaxi companies in China, including Baidu’s Apollo Go,” Li said.
“Furthermore, our strategic approach of offering both ‘ultimate performance’ and ‘ultimate value-to-cost’ products is generating a robust ADAS [advanced driver assistance systems] order pipeline for 2025 and 2026, with millions of units expected to be shipped domestically and overseas based on customer demand forecasts.”
Li declined to confirm a recent report in the Financial Times ($) that the company was set to be removed from the DoD list, instead stressing again that Hesai had never had any connections with any military entity, and that the Pentagon's decision had impacted its reputation and potential US sales.
Early inflection point in China
Despite that ongoing issue, the CEO said that his confidence in the firm’s future growth potential has “never been higher”, thanks to strong momentum in both the robotaxi and ADAS markets, regulatory developments in China, and consumer appreciation of the safety benefits of lidar, along similar lines to that of seatbelts and airbags.
“The lidar market in China has reached an exciting inflection point much earlier than expected, with a 22 per cent adoption rate among EVs priced above RMB 150,000 ($21,000) as of June,” he told investors.
“With our versatile product offerings and best-in-class manufacturing scalability, we are perfectly positioned to seize both domestic and international growth opportunities during this dynamic market capture phase.”
While the near-term uptick in sales revenues has not been as sharp as previously expected - Hesai’s June quarter sales were up only 4 per cent year-on-year - Li highlighted the company’s much-improved profitability.
In contrast to US-based competitors that are still posting major losses, Hesai says that it managed to shrink its net loss to just below $10 million in the latest period, thanks in part to much-improved gross margins.
“We are not aware of any other player in the global lidar industry that matches our financial strength while operating on such a massive delivery scale,” boasted Li.
RoboSense sales uptick
Hesai’s latest update came shortly after China-based competitor RoboSense, ranked by Yole as the second largest automotive lidar provider, said its sales of RMB 727 million (around $102 million) in the first half of 2024 had more than doubled year-on-year.
Claiming a four-fold increase in unit sales of lidar sensors over the same period, the Hong Kong firm says it now has design wins with 22 leading auto makers or top-tier suppliers, across 80 different vehicle models.
Its latest products, the long-range “M3” and mid-range “MX” lidars, are said to have found design wins with five different customers including China’s SAIC IM Motor and XPeng Motors, with start of production anticipated in the first half of next year.
To cope with the increased demand, RoboSense is currently building a 100,000 m2 manufacturing headquarters in the Shenzhen-Shanwei Cooperation Zone, with operations expected to commence in the current quarter.
However, the company does not appear to have reached the financial stability of Hesai, posting an operating loss of around $45 million in the six months ending June 30.
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