Part 1 (published 4/12/2020), dealt with the parallels between the automotive LiDAR and telecom optics investment booms, and posited that going forward, consolidation and pivots for LiDAR companies are inevitable. Part 2 (this article) discusses which types of companies will survive as stand-alone entities in the AV LiDAR space, and the factors dictating how the remaining companies consolidate and survive. I also present a few ideas for new directions in LiDAR that I think have been overlooked and present ripe areas for innovation and funding.
From an article in Forbes by Sabbir Rangwala.
One of the questions I dealt with in a recent article was whether automotive LiDAR was even essential for autonomous vehicle deployment. I felt this question needed to be answered prior to Part 2 – the conclusion was that as things stand, LiDAR is critical but competing approaches in cameras, AI, imaging radar and V2X could potentially be disruptive, and need to be monitored by AV and LiDAR companies. The latter should be paranoid about these disruptive developments and focus on providing compelling performance that cannot be matched by anti-LiDAR developments. Lower performance LiDARs will naturally have a tougher case to make in this regard.
Several recent news events are germane to the discussion here. Tesla recently announced a plan to provide ride hailing services (with a human driver) by mid-2021, with a plan to go driverless once enough driving experience accumulates (6B Autopilot miles and 1M vehicles on the road). Since Tesla is well known for pushing a non-LiDAR approach, its success means trouble for automotive LiDAR. On the other hand, AV companies in the US and China that use LiDAR are gaining significant public acceptance during the COVID epidemic (and hopefully its aftermath) by providing ride hailing and grocery delivery services that minimize human contact. This is good news for LiDAR companies.
On the AV front, there is sobering news. The COVID crisis has put tremendous cash flow pressures on automotive OEMs, with subsequent scaling back of investments on AVs. Ford is in a particularly difficult situation with its dismal stock price, difficulty in obtaining financing and suspending their dividend payments. It is likely that they will need substantial help and delay their AV efforts.
GM-Cruise recently announced an 8% reduction in staffing in areas such as business strategy, design, and product development, following on the heels of Ike, Velodyne, and Kodiak. Zoox, the vaunted Silicon Valley unicorn with an ambitious vision of using purpose-built battery driven AVs for ride sharing is finding a difficult time raising more money and could likely get acquired.
And hold your breath – even Waymo had to raise almost $3B recently because they acknowledged that developing AVs is expensive (and presumably because the new Alphabet management is getting what we all routinely go through – the “other bets” syndrome). These events are likely to multiply and trickle down, with a natural impact on the survival of many AV focused LiDAR companies. They all simply cannot survive going forward.
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