Author丨Pan Lei
Editor丨Sea waist
Source丨Luminar official website
"First seat belts, then airbags, and now Luminar."
This is the corporate positioning of LiDAR manufacturer Luminar prominently listed on its official website, which is intended to show that its products will fundamentally change the safety performance of automobiles.
Luminar also has a specific goal of saving 100 million lives and helping people save 100 trillion hours of time in the next 100 years.
This has been a big boost for investors – around the end of 2020, Luminar's market capitalization on the Nasdaq reached $12 billion.
The surge in the stock price has also reaped the rewards for Luminar's early investors.
According to data analyzed by Smartbeast, including 1517 Fund, GVA Capital, Volvo Cars Tech Fund, Daimler and other auto giants or investment funds established by them, have all made a lot of money after Luminar was listed on the Nasdaq in the form of SPACs.
But now, three and a half years later, Luminar is suddenly struggling, having to lay off 20% of its workforce and "outsource" manufacturing operations to cut operating costs.
Austin Russell, who founded Luminar at the age of 17, said the decision was never easy, but it was a necessary step to best position and maximum success over the next decade — and the goal remains to save as many lives as possible for drivers around the world, saving time and money.
He said that the depressed stock price has made it more difficult for the company to raise funds.
Luminar's share price has fallen 50% year-to-date.
In mid-April, Luminar's stock price fell to $1.3 per share, just one step away from entering a "delisting consolidation period" below $1.
This confirms the judgment of Citron Research, a well-known bearish organization, more than three years ago, when Citron believed that the $40 per share Luminar was a "foolish game" and that investors might as well try their luck in a casino.
In addition to investors no longer believing the company to play a significant role in the shorting industry change, Luminar's core financial metrics have also deteriorated rapidly, with a loss of $570 million in 2023, an increase of 26.7% year-over-year.
Once sat on the "tuyere" and became a favorite of investors
Luminar came to the attention of investors as a company around 2017.
According to data from Smartbeast analysis, Luminar completed a seed round at that time, raising $36 million from Canvas Ventures, GVA Capital, 1517 Fund and other investment institutions.
The reason why investors are optimistic about this company has to do with the genius founder.
When he founded Luminar in 2012, Austin Russell was just 17 years old.
But his resume is something that investors like to see — he started researching lasers as a teenager and later went on to graduate in applied physics at Stanford University.
After only about 3 months at Stanford, he dropped out of school to start his own business, and with the $100,000 Thiel Fellowship, he founded Lumina, which is a lidar business.
As Luminar's official website shows, Austin Russell believes that his company makes products that reduce traffic accidents and save lives.
With the rise of intelligent driving in recent years, his products have quickly attracted attention.
Because his views on lidar are contrary to Elon Musk's, he has become one of the most well-known opponents of Musk.
Volvo Cars, which focuses on automotive safety technology, has placed an order for Luminar's lidar products in addition to money through the Volvo Cars Tech Fund (which participated in the Pre-A and Series A financings).
In addition, Toyota, Daimler, Audi, Nvidia, Mobileye, etc., have begun to cooperate with Luminar.
At the end of 2020, it was listed on the NASDAQ through a SPAC, which almost became the pinnacle of Luminar.
Also in 2020, Austin Russell was named one of the world's youngest self-made billionaires by Forbes magazine, when he was only 25 years old but had a net worth of $2.4 billion.
But things soon changed – with Tesla's rise (especially overtaking Toyota to become the world's largest car company by market capitalization) and Elon Musk's continued sell-out of lidar, investor enthusiasm for the sensor began to fade.
An important point is that Luminar, as a lidar manufacturer, has been unable to complete mass production for a long time, and it is difficult to achieve a closed commercial loop, resulting in the company being unable to make ends meet.
After this year, the situation continues to deteriorate.
Therefore, Luminar's transformation goal this time is to achieve "asset-light" operations.
Of the company's approximately 800 employees worldwide, about 140 will lose their jobs.
It is said that after the complete completion of the layoffs by the end of this year, it will be able to save between $50 million and $65 million in costs per year.
Luminar has other cost-cutting measures, including "outsourcing" most of its production to TPK, among others.
The reason for the "outsourcing" is that Luminar believes that it is too difficult and expensive to run through the manufacturing process to implement lidar.
The whole industry is in a loss-making situation
But the difficulty is that Luminar isn't the only lidar manufacturer in trouble.
Israeli company Innoviz, a peer to Luminar, also announced layoffs of about 13% at the beginning of the year.
It is worth mentioning that just as Luminar received orders for LiDAR from Volvo Cars and Tesla, Innoviz has received orders from BMW and Volkswagen, but it has also failed to prevent the decline in business and the decline in stock prices.
The situation of other lidar companies is also very similar - in fact, none of the lidar companies listed on the Nasdaq have been able to get out of the quagmire of losses.
In addition to Luminar and Innoviz, these companies include Hesai Technology, AEye, AEVA, Cepton, and many more.
Suteng Juchuang, which is listed on the Hong Kong stock market, will have a net loss of 4.331 billion yuan in 2023 and an adjusted loss of about 430 million yuan.
It is worth mentioning that Suteng Juchuang sold almost 260,000 lidars last year, a year-on-year increase of more than 300%, and its customers include Toyota, Celis, SAIC, and so on.
Hesai Technology shipped 222,000 lidars last year, a year-on-year increase of 176.1%, with a loss of about 480 million yuan.
Some of the established lidar companies have even disappeared.
For example, Velodyne (founded as early as 1983), the "world's No. 1 lidar stock", has merged with another company, Ouster, to join the group for heating.
This has led to the oddity that lidar looks like a "super track", but no company is making money.
In this regard, a report released by CITIC Securities early last year said that the rapid growth of lidar has a high degree of certainty, and the "short-term fluctuations" encountered by the industry are not a major problem
Yole Intelligence, an industry research firm, predicts that the global automotive lidar market will reach $4.477 billion by 2028.
Frost Sullivan also reported last year that the size of China's lidar market alone is expected to reach 4.31 billion yuan by 2025.
Constant price reductions lead to unprofitable
"Lidar is expensive, ugly, and unnecessary."
Back in 2018, Elon Musk showed extreme antipathy to such sensors.
In his view, lidar is not the core of autonomous driving systems, and using it is a "lazy behavior" that will lead companies into a dilemma.
But since then, the shortcoming of "expensive" has been greatly alleviated.
On April 16, Suteng Juchuang released a lidar priced below $200 and will be mass-produced in 2025.
This reflects the amazing "price reduction effect" of lidar.
According to Suteng Juchuang's financial report, the average selling price of ADAS lidar in 2023 will be about 3,200 yuan.
In 2022, the price is about 4,300 yuan.
With the launch of lidar priced below $200, this kind of intelligent hardware, which used to cost tens of thousands of dollars, has officially entered the thousand-yuan level.
Huawei also said that it expects to increase the cost of LiDAR to 200 US dollars to solve customers' cost concerns.
But in the eyes of car companies, this is far from enough.
"If the market price is 3,000 yuan, BYD may only need a cost of 900 yuan" - this is said to be BYD Chairman Wang Chuanfu's statement at the 2024 annual business meeting.
In other words, the "cost reduction" of car companies is still continuing, and it is difficult for hardware such as lidar to obtain product premiums.
This is a huge financial challenge for lidar companies.
Taking Suteng Juchuang's adjusted loss of 430 million yuan last year as an example, combined with its shipments, it will lose almost 1653.8 yuan for each lidar sold.
But even this kind of money-losing business is actually doing it with trepidation.
Suteng Juchuang said in its 2023 financial report that even if it obtains fixed-point orders from car companies, it still faces the risk of contract termination, postponement or inability to perform.
As for other start-ups, the survival environment is hardly optimistic.
Tanwei Technology, a lidar startup invested by Xiaomi, has won the fixed-point project of "Hechuang Automobile".
However, the car company has mediocre sales in the market and is simply unable to provide sufficient orders.
This is also a common hurdle faced by startups - in the initial stage, they can only get orders by cooperating with marginal car companies, and then strive to cooperate with mainstream car companies to expand sales.
However, judging from the situation of Suteng Juchuang, even if the sales volume increases significantly, making money is out of reach.
"Lidar is like a cheating weapon"
"Lidar is like a cheating weapon."
This is an analogy given by Li Yifan, CEO of Hesai Technology, to the controversy between LiDAR and "pure vision" in the field of intelligent driving when he released his latest LiDAR product, ATX, at the end of last month.
He believes that when Tesla achieved a visual lead, he told other latecomers that "you can't use a gun" in a fair duel, and that "guns are actually cheating weapons".
Li Yifan also said that the industry generally believes that "the cost of visual solutions is lower", in fact, there are certain misunderstandings.
He said that Tesla's use of vision solutions to achieve cost reduction is due to the construction of a systematic lead from chips to data to algorithms. "These systems come at a cost."
This means that if other car companies want to take the "pure vision" route in intelligent driving, they may achieve a certain cost reduction in hardware, but they will not save money in terms of investment in chips and algorithms.
In addition, LiDAR can better solve corner cases (extreme cases), at least as a backup for long-range detection.
It is worth mentioning that although Musk is the most radical critic in the field of lidar, Tesla is buying lidar products.
According to the news released by Luminar, Tesla purchased about $2 million in lidar products in Q1 this year.
This looks like good news, but there's no confirmation that Tesla is abandoning the visual route.
And compared to its Chinese counterparts, Luminar is the first company in the world to launch a lidar product priced at just $500, but it is unclear whether its latest generation will drop below $200.
Another piece of good news for Luminar is that the upcoming Volvo EX90 will be equipped with Luminar lidar.
If this car can become a small hit, Luminar can be regarded as a big tree.