Lidar Landscape Q1 2025

The industry converges on a few themes

Each quarter I follow the different lidar companies in the sector to get an understanding of industry trends, and each quarter they never fail to disappoint with fun tidbits and industry trends (here’s last quarter’s post). Innoviz, Luminar, Aeye, Aeva, Hesai, Microvision and Ouster have all reported recently and had some interesting things to say. So here we go.

Key trends

A few trends are popping up all over the industry:

1. Everyone is short on cash: All lidar companies are raising cash, have been raising cash or will be raising cash. Most have an ATM function, that they now interestingly enough list as a capital source, so watch out if you’re holding Luminar, Microvision, Aeye or Aeva - dilution is on the way!

2. Industrial applications and GTM is here! Every single lidar company is now focusing on selling to other applications: warehouses, intelligent traffic systems, robotics, airports and train security. I understand the appeal of a faster go to market - MVIS 0.00%↑ think they’ll book $30-$50m in sales over the next 18 months. Aeye ( LIDR 0.00%↑ ) think they’ll be selling within the next 6 months on PoCs. Aeva AEVA 0.00%↑ are promising 1k units, Luminar ( LAZR 0.00%↑ ) and Innoviz ( INVZ 0.00%↑ ) both see sales outside of automotive. Small problem is that Ouster ( OUST 0.00%↑ ) and Hesai ( HSAI 0.00%↑ ) have quite a large lead in the space already. Execution in sales is everything, and it’s not easy to simply switch focus - especially when you’re cost cutting.

3. L3 is a long time coming… While there seem to be ~7 RFQs out there that are meaningful, they aren’t progressing. The existing L3 programs are still tiny (BMW, Mercedes) and large mass market programs aren’t being announced at all. VW has a large one announced but we’ll see if it launches in 2027. It seems like L2+ is what the market wants and L3 is…. too complex for now. Mobileye’s Supervision (L2+) is delayed, their Chauffeur hasn’t landed any new launches either. Mercedes announced L2+, BYD announced their Gods Eye (L2+). Essentially, a product that’s equivalent to Tesla’s FSD (L2+) is definitely good enough for the consumer market, and on the lower end of the L2 spectrum lidar provides safety, not real value add. No one buys a top tier airbag, you just buy one that’s good enough and cheap (i.e Hesai).

4. Related to the delay in L3, there’s a big debate going on among lidar players: is being first to market a winning strategy. Innoviz and Luminar, being first to market, think yes. Aeva, Aeye and Microvision think no. Convenient since they haven’t signed deals yet. It’s a valid debate - L3 deals of significant volume haven’t been announced, so there is room for a new player to win those RFQs once OEMs figure out what exactly it is they want. BMW is a good example of this (they piloted the i7 with Innoviz lidar but pivoted to Valeo), as is Mercedes (they signed a deal with Hesai after being an early partner and investor in Luminar). On the other hand, there are real costs to integrate and validate a technology and switching pivotal technology like lidar in mid flight can cause a lot of delays. My best bet is that for companies that really want to launch something close to L3 as soon as 2027, they need to have a tried and true supplier now. The only two OEMs with something in play for this are VW and Mercedes. For VW, Innoviz provides the lidar and MBLY 0.00%↑ provides the L3 stack. They’re and planning to launch L3 with a few key brands in mass market. Mercedes has been developing in house and so far only have a mild L3 with a main focus on L2+ using Hesai’s lidar.

5. Unlike L3, L4 robotaxis and trucks have surprised to the upside are hitting the roads in 2026, with test fleets already on the road in 2025. These have provided an interesting upside for the market as robotaxis have multiple lidars - anywhere from three to nine! There’s also an interesting dynamic starting to take place where early fleets could capture a dominant market share in a local market, making this an important market to scale quickly. This means that a supply/demand dynamic similar to traditional ride hailing could play out in L4 vehicles - launching first means getting more customers, which means it’s more economical to deploy more vehicles, thus improving service, reducing wait times, making it an even better user experience. Economies of scale will matter here, as will partnerships that can generate demand (i.e Uber and Lyft).

6. Tariffs apparently don’t affect anyone as they either manufacture in Thailand, Israel, the US, Mexico or South East Asia or have no manufacturing at all. Basically anywhere but China.

Bringing the trends together: it’s slow going and cash is king. Everyone needs to raise capital within the next 4 quarters. BUT winners are already emerging. Keep your position size accordingly.

Now onto some company specific call outs!

Innoviz

INVZ 0.00%↑ reported a strong quarter, tracking well for their FY guidance. Not a surprise, but happy to see it. It would have been nice to see a guidance raise but I think they were counting on Mercedes as an NRE partner and they lost that to Hesai, and perhaps Aeva.

• VW partnership is on fire, while not new news it’s great to see in numbers. $17m in revenue is very nice between both NRE and product sales. Early units shipping to VW for the ID Buzz is a nice ramp in revenue. VW is one of the few players who can scale vehicle production in the L4 space, which if the market evolves as I described above would be a very big advantage and in general a really interesting evolution for VW as a company.

• Loss increased but slower than revenue growth - a net positive. This is expected as NRE revenue has a higher gross margin. Cash burn is as expected, and currently Innoviz should end the year with $60-$70m in cash on hand.

• No mention that I can tell of past highlighted partnerships: L4 trucking partner and EU OEM (Aurora and Mercedes most likely). So perhaps those were lost. Instead highlighted partnership with $NVDA Hyperion and OEM who's evaluating it - my best guess is $GM based on their recent announcements at GTC. It’s worth highlighting how meaningful the Nvidia partnership is. Nvidia has two autonomous driving platforms, Drive and Hyperion. Drive is their open source platform where OEMs can pick and choose from different tech stacks and hardware providers and essentially build it themselves. Hyperion is Nvidia’s ‘out of the box’ solution that they provide to OEMs as a full stack solution, and here their lidar of choice is Innoviz. This means that if Nvidia sells Hyperion, they’re selling Innoviz as the default. This means that Innoviz has now won two of the three largest autonomous driving full stack partners (Mobileye and Nvidia).

• Industrial applications: like everyone else they’re looking to sell into industrial applications via integrators. I’m not a fan. Sure, Innoviz could use the business, but can they afford to lose focus now? They've announced multiple times over the past few years entering into adjacent markets and each time have lost focus. Execution is everything.

→ Innoviz needs to win new NREs to beat their guidance this year and exit the year with a strong cash position. Based on the slow moving RFQs going on for L3 programs, it’s very unclear if this will happen. Alternatively, they could try and raise debt based on the real volume growth and NRE future cash flow. Either would strengthen the company financially.

Aeva

The surprise move this earnings season came from Aeva, now valued at $1 billion! Aeva secured a few notable wins since the beginning of 2025:

1. LOI from a European OEM (my guess is Mercedes) for a development program for their next generation of Lidar.

2. Progressing with Daimler trucks towards SoP in 2026

3. Announced strategic investment from a tech subsidiary of a fortune 500 who invested 32.5m in equity and 17.5m in NRE JD program. This entity is also going to be a tier 2 for manufacturing the lidar. Grok’s guess is most likely LG, Harman, or Bosch.

4. Generated traction in industrial partnerships.

All in all a very impressive start to the year. FMCW has been touted as the next generation of lidar and while very interesting has yet to really be manufactured at scale.

Aeva also has a short runway with cash on hand ($85m) although it’s larger if you count (and they do) their ATM facility and debt facility.

Aeye

Aeye has taken a different approach to most of the independent lidar players. They’ve gone the asset light approach and partnered with Liteon as their tier 1 manufacturing partner. What this means is that they've gone asset-light with greatly reduced capex but also greatly reduced upside. To put that in numbers, their expected cash burn for the year is only $26M vs the $60-$150 that other LiDAR players are expected to burn. On the other hand, they only have $28M in the bank. If you count their $40m ATM facility, than they’re well capitalized…

Aeye is also looking to enter other sectors beyond automotive - ITS, airport and railroad safety.

In terms of their GTM and traction Aeye seem farther behind: they’re only integrating with Nvidia Drive now and have no OEM announcements to make (neither does LiteOn). This could all change quickly and I’m sure that having a tier 1 partnership helps GTM.

Microvision

This was one of the most disappointing calls for shareholders and yet interesting for me. Microvision’s management team always share an honest perspective on the industry that you can only do without having a partnership. I’ll share some choice quotes:

On the RFQ landscape: “We remain engaged in 7 RFQs for automotive programs and make incremental progress. This has been really slow going because of OEMs focus shifting to their global plans" → Tariffs are coming up as a delaying function to L3 adoption.

Why haven’t they won partnerships? It’s the balance sheet stupid…

"In previous years, we focused on winning programs targeted for production with several years of customization in play. These deals could be described as the ones our competitors signed. In each agreement, the challenge we faced was not our technology or capability rather than the state of our balance sheet would always cause OEMs to pause."

.... Since it's all the balance sheet and that's now been "shored" up there should be no more excuses, right? But....

"So we continue to drive and make progress, but I do not expect any substantial projects to be awarded with material production revenues in the near future."

Microvision is firmly in the camp that current lidar engagements aren’t worth the money and are a net drag on resources (which when judging the Innoviz <> BMW and Luminar <> Volvo deals in a vacuum seems to be the case):

"OEMs will continue to go through the reformulation of existing and upcoming RFQs looking for cheaper LiDAR solutions that meet the desired performance criteria. Especially with Glen joining us from the automotive industry, we're excited to pursue our continued engagement with automotive OEMs"

Microvision’s cash is also down to $69m but have a whopping $113m ATM facility.

L3....is slow in coming: "the OEMs are going through a bit of a reformulation on Level 3. And the good news is all Level 3 platforms still need LiDAR.

So there's no change in approach in that regard. But really, the first generation had limited success, very low volumes and take rates.

And so now there's a bit of a kind of a refocusing on, well, what is that right solution. And I think predevelopment contracts are normally how the next step in that environment where they test out and showcase what the solution could look like and validate cost models as well as performance models and really trying to get to a value prop that the end consumer will buy. And what's exciting for us is in those discussions, and like I mentioned, as recently as last week, we have the portfolio that between long range as well as short range, wide field of view, extended range field of view, we have the portfolio that can really, I think, deliver a solution for them"

Luminar

Luminar finally kicked out Austin Russel as CEO. Why it took them so long to take this action is beyond me. Perhaps the new CEO can be the adult in the room and refocus this company but until then Luminar will remain a debt filled story that I just don’t see how they manage to avoid bankruptcy without massive, and I mean MASSIVE, dilution.

Ouster

Ouster has been doing a great job in the industrial and smart city applications. They’re actually growing revenue 30+% and approaching cash breakeven this year. As a pure play lidar player it’s an interesting company. As an automotive lidar supplier it’s been less interesting. Although this past quarter they had two announcements that were interesting, the first was signing Komatsu and the second was that “Within automotive, we were chosen by the mobility subsidiary of a global OEM to supply both short- and long-range sensors to support the development of their autonomous vehicles.” As I mentioned above, L4 robotaxis are coming to market much faster and for these slower moving vehicles, Ouster’s lidars make good sense. Although having lower priced options like InnovizTwo or Hesai make more sense.

Hesai

Hesai is absolutely smashing it. They’re the only profitable lidar player, shipping 1.2 million units. Interestingly enough, they’re well aware that their current $200 price point for their lidar will need to 2.5x to ~$500 to represent the BoM for a better lidar which they’ll need to ship to western OEMs or to Chinese ones who are focused on L3.

The only market where L3 seems to be moving ahead on schedule is…China. Not only that but low cost lidar are being used in safety applications. Both of these are tailwinds for Chinese lidar companies and Hesai is capitalizing on this to improve their manufacturing process and lower costs.

Volume, we are expecting 1.2 million to 1.5 million total shipments in 2025 based on our customer forecast, i.e., 1.0 million to 1.3 million units from ADAS and nearly 200,000 from robotics. For ADAS segment, we have discussed multiple industry trends during our earnings call, where LiDAR adoption is skyrocketing as more customers recognize the 3 core values of LiDAR, making cars safer, smarter and more desirable than ever. In recent quarters, we have secured significant design wins for new car models, SOP in 2025 and beyond. Some of our major customers' top-selling modules, including those from Li Auto, Xiaomi, BYD and Leapmotor are driving LiDAR into the mainstream. Additionally, some of our clients are adopting LiDAR, as a standard configuration starting 2025. For 2025, we will have 3 variations from [ AT ] in production. The first is the current ATP series, which will experience a moderate annual decline in ASP in teens to reach around $350. The second is the ultra-high performance AT designed to meet L3 standards, which will enjoy a higher price tag around $500. Lastly, the cost-effective compact ATX priced at $200 has begun its production in Q1 with some best-selling car modules adopting it as a standard configuration in 2025. Heading into the mass market vehicles, the ATX is projected to ship between high 6 digits to 1 million units in 2025. Expected long-term content per vehicle remains $500 to $1,000 with the introduction of L3, as more LiDAR units will be adopted per car for all-round safety.

Oh, and if you thought that only western lidar players are interested in industrial lidar applications…think again. Only Hesai is already selling hundreds of thousands of units to these markets which include manufacturing automation, robotics and autonomous lawnmowers of all things.

Portfolio implications

I’ve been a long time holder of Innoviz, and this quarter doesn’t change anything. They’re still on track and by far the leader in the western lidar markets. However it’s still a market undergoing large shifts that’s developing slowly. Caution is still the better part of valor until a clear path to cash flow breakeven can be seen.