Hesai sees Level 3 lidar shift with Mercedes-Benz

Hesai Technology, the Shanghai-headquartered manufacturer of lidar units now widely deployed by major automotive customers in China, has posted sales of RMB681 million ($98.7 million) for the March quarter, as its sensor technology gains more global traction.

While that sales figure represented a 30 per cent rise on the same period last year, shipments of lidar sensors surged 140 per cent, to just over 470,000 units.

Hesai CEO David Li also revealed that the company was now set to supply auto giant Mercedes-Benz with models enabling so-called “Level 3” autonomy, where driving responsibility shifts from the driver to the car manufacturer.

“2026 marks a transformative chapter for us as we initiate a strategic paradigm shift evolving from spatial perception to spatial intelligence,” Li told an investor call discussing the latest results. “Beyond our lidar business, we are actively forging the eyes and muscles of physical AI.”

‘Invisible airbag’

Li said that Hesai was poised to double annual unit shipments again in 2026, reaching somewhere between 3 million and 3.5 million units as lidar technology continues to proliferate in advanced driver assistance system (ADAS) applications, and evolves to more advanced designs that he says will blur the lines between camera-based and lidar-based machine vision.

“Lidar is fast becoming the invisible airbag deployed across vehicles at scale,” remarked the CEO. “This was clearly demonstrated at a recent Beijing auto show where Hesai lidar was featured in 56 vehicle models across 24 leading automotive brands.”

Li believes that “Level 3” autonomy, defined by the US National Highway Traffic Safety Administration as “conditional automation” - where the car is driven automatically but a driver must be ready to take over upon request - is emerging as the next major growth driver for the lidar industry.

As responsibility shifts from the driver to the automaker, Li thinks that this will mean architectures shifting from one lidar per vehicle at a typical cost of $200, to between three and six lidars at an entry-level cost of around $350. That cost would likely rise to between $500 to $1000 in more advanced configurations, he noted.

“Lidar Level 3 is not just about more sensors,” he told investors. “It fundamentally elevates the role of lidar from a passive backup to an active decision enabler in safety critical driving scenarios.”

Picasso launch

In a bid to capture the emerging market, Hesai has introduced its Picasso lidar, which is described as the world's first “6D” full-color, ultra-sensitive system on a chip, and is based around a single-photon avalanche detector (SPAD) light sensor.

“It fuses RGB color and precise 3D geometry at the true chip level, generating real time colorized point clouds,” Li explained. “In plain terms, it enables systems to see and understand the world more like humans do and directly addresses the long standing lidar versus camera debate.”

Looking ahead, he said he expected lidar applications to expand way beyond today's limitations, with many camera-dominated applications shifting towards lidar over time as the era of physical AI develops.

The new supply agreement with Mercedes-Benz will support the car maker’s efforts in Europe as well as China, with Hesai providing lidar units made at its new manufacturing center in Thailand.

Li added that the company had also been selected by Toyota for the new “BZ3X” compact electric SUV model, marking Hesai’s first entry into the Japanese electric vehicle ecosystem. 

Responding to investor questions, the CEO commented: “People often debate cameras versus lidar, but I think that's a little bit like asking whether humans should choose between seeing colors or seeing depth in the real world. We naturally use both together.

“That's exactly what our 6D full-color lidar does. It helps machines not only detect objects, but truly understand the physical world more like humans do.”