Wen/Yang Song
In the tenth year of entrepreneurship, Li Yifan's team saw the dawn of profitability.
On August 20th, Hesai Technology, headquartered in Shanghai, released its report card. In the second quarter, revenue increased to 460 million yuan, with a total revenue of over 1.8 billion yuan in the past 12 months. The quarterly loss narrowed to 72.1 million yuan.
Looking forward to approaching profitability in the fourth quarter of 2024, "said Li Yifan, co-founder and CEO of Hesai Technology, during the financial report conference.
At the age of 37, he is a filial son of Shanxi. After graduating from Tsinghua University, he went to the United States to study and met two "comrades in arms": Sun Kai, the current Chief Scientist of Hesai, and Xiang Shaoqing, the CTO of Hesai.
The three of them have been fighting side by side for ten years and are about to make a profit.
Turning point approaching
Lidar is a sensor that uses lasers to achieve precise distance measurement. It is known as the "eye" of intelligent cars and is an important component for ensuring the safety of intelligent driving.
For example, the Zero Run C16 model is equipped with the Hesai AT128 LiDAR, which has a 200 meter ultra long detection capability and uniform, high-definition resolution.
Hesai mainly targets three types of customers:
One is passenger cars or commercial vehicles that support ADAS (Advanced Driver Assistance), supplied to car companies such as Ideal, Xiaomi, Zero Run, Changan, Great Wall, etc;
The second is autonomous driving companies such as Baidu, Didi Autonomous Driving, Nvidia, etc;
The third is unmanned delivery logistics vehicles and intelligent robots, with customers including Meituan unmanned delivery vehicles and Wuwei Zhixing.
Riding on the wind of intelligent driving, the founding team will take the company public in 2023, with a current market value of 550 million US dollars.
In the past two years, intelligent driving has become a battleground for car companies, and Li Yifan's team has won more orders.
In the second quarter, it delivered a total of 86526 laser radars, a year-on-year increase of 66.1%. Among them, there are 80000 units equipped on passenger and commercial vehicles.
Specifically, it has established mass production partnerships with over 70 car models from 19 automobile manufacturers.
The main customer of Hesai is Ideal Automobile. Starting from the Ideal L9, Hesai has established a designated cooperation with the car company.
In July, the company also announced that it had reached a designated cooperation with Chinese joint venture brands Audi, General Motors, and Ford for laser radar mass production. The new cooperative model will start large-scale production from 2025.
The Chinese LiDAR market has reached an exciting turning point earlier than expected, "said Li Yifan. As of June, the adoption rate of LiDAR in electric vehicles priced at over 150000 yuan was 22%.
He expects that the shipment volume of the LiDAR market will reach around 1 million units this year, and the shipment volume of Hesai in the fourth quarter will exceed 200000 units.
Dual core driver
In addition to passenger cars, LiDAR has another application scenario, Robotaxi (autonomous taxi).
For ADAS, car companies can choose a pure visual route that does not require the installation of LiDAR. On Robotaxi, LiDAR is an essential sensor due to higher safety requirements.
Su Yu, the market manager of Hesai, explained to 21CRBR reporters that LiDAR can actively emit light and is not afraid of changes in ambient light. It is not affected by any weather conditions such as darkness and glare, and has a perception ability that exceeds that of human drivers;
In addition, when facing weather conditions such as rain, snow, and fog, the performance of LiDAR is significantly better than sensors such as cameras and millimeter wave radar.
Lidar is a bit like a 'cheating weapon' that can increase security by more than 10 times, "Li Yifan gave an example.
The main LiDAR on the sixth generation Baidu Apollo unmanned vehicle is exclusively supplied by Hesai, and each vehicle is equipped with four ultra high definition long-range LiDAR AT128.
This year, Baidu's self driving travel platform "Apollo Go" became popular, and the order volume rose rapidly. Its platform vehicles are also equipped with Hesai's LiDAR.
We play a key role in the explosive growth and large-scale commercialization of China's autonomous taxi market
Li Yifan revealed that Hesai exclusively supplies long-range LiDAR to the top five autonomous taxi companies.
According to a report by Yole Group, the global market size for autonomous taxi LiDAR in 2023 is $124 million, with Hesai holding a 74% share.
The market prospects for Robotaxi LiDAR are promising, but the volume is not large. The financial report of Hesai did not separately disclose the shipment volume of such products. According to the financial report, it is estimated that the shipment volume in the second quarter will not exceed 6000 units.
Sprint for Profit
In the LiDAR industry, only we can ensure large-scale delivery while maintaining strong financial resilience
Li Yifan said that in the second quarter, Hesai's comprehensive gross profit margin reached 45%, an increase of 15 percentage points year-on-year, with a gross profit of 200 million yuan.
Self built factories have improved profitability.
Lidar is a complex product, and upon disassembly, it contains hundreds of components.
When entering the stage of mass production and delivery, the management of Hesai realized that no supplier could produce reliable and compliant LiDAR products in large quantities.
All manufacturing problems are research and development problems, and all research and development problems must be solved in manufacturing
Li Yifan believes that building a self built factory can better improve the iteration speed and large-scale delivery capability of products. It can not only control each production link from the source, but also optimize and improve the production process in a timely manner.
The company has built a "Maxwell Intelligent Manufacturing Center" in Jiading District, Shanghai, with a total investment of 164 million US dollars. It integrates research and development manufacturing and is expected to have an annual production capacity of 1.2 million units. It was put into operation last year.
The increase in shipment volume highlights the advantages of self built factories.
Due to high expenses in research and development, sales, and marketing, the company is still operating at a loss.
From 2025 to 2026, domestic and foreign payments are expected to reach millions of units, "said Li Yifan with an optimistic attitude.
In his eyes, LiDAR should be a commodity and not lose money for every unit sold.