Produced by Flower Finance Observation
Editor丨Duozi
The story that people are talking about today is that Europe and the United States are still unable to stop China's new energy vehicles from "bloodbathing" the global market despite all their efforts.
In this war, which often requires tens of billions of investment, people inadvertently ignore another war that is vital to the entire new energy vehicle industry but dwarfs in scale.
This is the war of a "small company" with a total revenue of only 1.88 billion yuan in 2023, which has now hardened the US government again after defeating the American giant head-on!
Another war in the rise of Chinese automobiles
In February 2021, David Hall, the founder of American lidar giant Velodyne, walked out of the company door and reluctantly looked back at the company that had poured 38 years of hard work - he was removed from all company positions by the board of directors.
I just don't know if David Hall looked back and remembered the slightly arrogant words of 4 years ago: "There are hundreds of angry riders, panting and chasing", "We are the leading lone wanderers, and the finish line is just around the corner".
In 2017, in David Hall's view, the "riders" should be "angry".
At that time, people had made it clear that the new future of the automobile industry - new energy vehicles, and the future of new energy vehicles will inevitably embark on the road of intelligent assisted driving and even automatic driving.
As for the core components of intelligent driving, LiDAR, which is equivalent to the eyes of automobiles, has almost been monopolized by Velodyne, firmly occupying more than 90% of the global market share, and most "riders" like Hesai Technology are just newborns who have just entered this track.
Still, David Hall underestimated China and Chinese companies.
In the past, some Chinese companies often adopted the tactic of "surrounding the city from the countryside" when faced with the strong technological advantages of foreign investment, that is, using low-performance but cost-effective products to first conquer the low-end market, and then slowly encroaching on the high-end market where foreign capital is dominant.
The fledgling Hesai Technology is very bold, directly targeting Velodyne, making high-performance products, and working with the world's top customers to polish industry-leading technologies.
However, Li Yifan, the founder of Hesai Technology, also knows that it is indeed easier to blindly imitate the mature products of advanced enterprises, but in this way, where is the foundation of the enterprise?
"It's a kind of arrogance not to make the same product."
Having made up their minds, the design of Hesai's second product looked quite risky and different from the mainstream form defined by Velodyne at the time, which greatly increased the customer's compatibility with the market.
Fortunately, the experience gained from working with the world's top customers has enabled Hesai Technology's products to truly meet the needs of the market.
Hesai Technology is an instant hit!
Hesai Technology is thriving, but Velodyne's arrogance has dug a hole for itself.
Velodyne believes that despite the miracles of China's decades of development, it has never broken through the technical barriers of the West in the automotive field. Therefore, it is inevitable that European, American, Japanese and South Korean car companies will be able to take the lead in breaking through the new energy vehicle industry and putting lidar on mass-produced models.
As a result, Velodyne did not have a warehouse in China, and Chinese companies had to wait at least three months for their products to have quality issues that needed to be repaired.
This is unacceptable for Chinese companies that are rapidly developing intelligent driving.
On the other hand, Hesai Technology, because it is a Chinese company, can naturally serve Chinese enterprises faster and better, and it only takes 2 days for all problematic products to be replaced.
To add insult to the anger of Chinese companies, Velodyne shipped uninspected products to China.
In 2018, Baidu originally used both Velodyne and Hesai Technology products, but once in just a few dozen Velodyne products received, Baidu found hundreds of problems that needed to be repaired.
This series of arrogant actions caused Velodyne to bury itself with his own hands and surrender the market to Hesai Technology.
According to data released by consulting firm Yole Developement, Hesai Technology's market share was only 3% in 2021, but in the following year, Hesai Technology's market share soared to 47%, ranking first in the global automotive lidar list.
And Velodyne, the former American giant, could only merge with Ouster and change its name to Ouster for warmth, and became an insignificant other in statistics.
Hesai Technology's victory has successfully cleared the technical obstacles on the road to intelligent new energy vehicles in China.
An annual income of 1.8 billion is also worth sanctioning?
"Any company that relies on lidar can end up with a fool using lidar."
Tesla CEO Elon Musk has expressed similar views more than once, and Tesla's pure visual autonomous driving solution (relying only on cameras) has indeed driven many fans and friends to follow with its strength.
"Aren't humans driving with their eyes?" This is already a fixed phrase for many Musk supporters.
Is lidar really going away? Even Li Yifan once joked that he woke up every day with 100 WeChat messages on his mobile phone, 99 of which were asking how to look at pure vision.
But perhaps, the U.S. government has already given the answer.
On January 31, 2024, Eastern time, the United States suddenly added Hesai Technology to the list of "Chinese Military Companies".
You must know that there are also a number of well-known Chinese companies such as Huawei, SMIC, DJI, 360 and other well-known Chinese companies that have entered the list, compared with those companies with hundreds of billions and tens of billions of annual revenues, Hesai Technology, a "small company" that has experienced three consecutive jumps to earn 1.88 billion yuan a year, is a little dwarfed.
Presumably, the U.S. government will never choose to "sanction" Hesai Technology because of a lidar that may disappear and a revenue of 1.88 billion.
A simple analysis can reveal the problem.
As early as Tesla's route selection, the price of lidar was high, and the cost of pure vision camera modules was only about 8%-15% of that of lidar.
However, as most people know, Chinese companies will brand the industry as "cabbage price".
With the continuous upgrading of technology, Hesai Technology has directly doubled the performance of LiDAR with the same cost; The performance remains the same, and the cost of lidar is doubled" as the company's basic criterion.
According to Hesai's prospectus, from 2019 to the first nine months of 2022, the average selling price of Hesai's lidar has been decreasing, from US$17,400 to US$3,100.
According to Hesai Technology's 2023 annual report, the average selling price of LiDAR has dropped to about 7,955 yuan (about US$1,099), which is less than 10% of the average selling price in 2019.
As of March 2024, models priced at only about 160,000 yuan have also begun to be equipped with lidar.
Sun Changxu, general manager and managing partner of Xiaomi Industrial Investment, once analyzed that Chinese companies are good at continuously reducing costs through technological innovation, and if the price is lowered, the information perceived by lidar is more comprehensive and accurate, and the user experience is better, so the future of sensor fusion is naturally everyone's choice.
To put it simply, for consumers, if something is not very expensive anyway, then no matter how much it improves safety, adding it is better than not adding it.
The market has also given the answer, and the monitoring data of the Gaogong Intelligent Vehicle Research Institute shows that in 2023, 440,300 new cars will be delivered with pre-standard lidar for passenger cars (excluding imports and exports) in the Chinese market, totaling 570,900, a year-on-year increase of 341.19%.
On this basis, more consulting companies boldly predict that the year-on-year growth of lidar shipments will reach 160% in 2024, and by 2030, the global automotive lidar market will exceed one trillion yuan.
With such a prospect, it is no wonder that the US government is eyeing it.
Hesai Technology, which has become an industry leader, is a little uncomfortable, and its stock price plummeted 46% in a single day, and now its total market value is only $656 million, which has fallen nearly 74% of the initial market value of the IPO.
Hesai Technology urgently needs to fight back.
Tough head, can you win?
"You've never seen such a beautiful lidar!"
At the Beijing Auto Show in April 2024, Lei Jun proudly introduced to Wang Chuanfu, chairman of BYD, that at the beginning of the right hand, it was the LiDAR of Hesai Technology carried on the top of Xiaomi SU7.
Xiaomi is not only an investor in Hesai Technology, but also an "excellent mentor" of Hesai Technology's tough U.S. government.
In 2021, Hesai Technology at that time had just received a $374 million Series D investment from Xiaomi, and witnessed the whole process of Xiaomi's hard work with the U.S. government.
On January 14, 2021, Xiaomi was included in the list of "Chinese military-related enterprises" by the United States, and at the end of the month, Xiaomi quickly sued the U.S. Department of Defense and the U.S. Treasury Department.
It is this lawsuit that has made people see the extent of the U.S. government's child's play.
In the lawsuit, the U.S. Department of Defense only provided two pages of evidence documents that described two facts respectively, and it was on the basis of these two facts that the U.S. Department of Defense came to the conclusion that Xiaomi qualified as a "Chinese military-related enterprise":
1. China's Ministry of Industry and Information Technology commended Xiaomi's CEO Lei Jun as an "outstanding builder of socialism with Chinese characteristics".
2. Xiaomi mentioned in its annual report a five-year plan to invest in 5G and AI, both of which have been identified by the U.S. Department of Defense as important modern military technologies.
However, the winners of that commendation also included Lao Gan Ma Chili Sauce, which was just a celebration of China's economic achievements. As for 5G and AI, what high-tech company hasn't touched on today?
Such laughable evidence that even the US Department of Defense admitted unashamedly in its oral arguments that it had not found any information about Xiaomi's military-related technology transfer.
In the end, Xiaomi won the case unsurprisingly. Bloomberg commented in the article: "Xiaomi's victory marks a 'rare victory' between Chinese technology companies and the US government."
It can be seen that the so-called US list of "Chinese military-related enterprises" is completely unfounded and may even be instigated by others.
Remember Velodyne, who was once defeated by Hesai Technology? Since the merger into Ouster, he has been in a lawsuit with Hesai Technology.
Just some time ago, Hesai Technology bluntly said that this sanction was the ghost of Ouster.
It's just a defeat. On May 13, 2024, Hesai Technology, which had defeated the American lidar giant head-on, had no choice but to once again choose to stand up to the U.S. Department of Defense head-on and submit a complaint to the federal court in Washington.
However, Hesai Technology may not be really afraid of this so-called sanction, it is the industry leader, the world's most powerful and promising new energy vehicle industry chain is in China, and even the chips that everyone is worried about, Hesai Technology has started its own research as early as 2017, and has released many generations so far.
On February 9, 2023, Hesai Technology rang the NASDAQ bell, and Li Yifan said, "We hope to have the status that Hesai deserves in the international market." ”
At that time, many people believed that "China's No. 1 LiDAR stock" was the embodiment of Hesai's "status in the rivers and lakes".
Now, maybe even Li Yifan didn't expect that Hesai's "status in the rivers and lakes" would improve too quickly.
(Article source: Flower Finance Observation)
*This article is based on publicly available information and is for information purposes only and does not constitute any investment advice