Reduced to $100 in three years, Zhou Hongyi put a "guide price" for lidar

The cost of lidar will be further reduced in the future, which seems to have become the consensus of the industry, but as for when to reduce, how low is it? Very few people can give a concrete answer.

In an open dialogue some time ago, Zhou Hongyi, who led 360 to invest 2.9 billion yuan in Nezha Automobile, said his prediction.

He believes that after Moore's Law comes into effect, the cost of lidar may be reduced to the price of cabbage within three years, that is, $100.

According to a survey, the average price of lidar that can be mass-produced is now around $1,000. If according to Zhou Hongyi, the cost of lidar will be reduced by ten times in a very short period of time, which is a huge breakthrough for lidar and even the entire intelligent automotive industry.

This remark also fell like oil and water, which triggered a lot of discussion in a short period of time. As a result, New Intelligent Driving also contacted several leading companies in the lidar industry and talked about their true voices.

<h3>Is it possible that the cost will be as low as the price of cabbage in three years? </h3>

Around 2010, due to the research and development needs of unmanned driving, vehicle-grade lidar was put on the development agenda.

Seven years later, the world's first vehicle-grade mass production lidar appeared, but due to a variety of factors, its single price was as high as 80,000 US dollars, and the high cost was doomed to lose its connection with the mass market.

Driven by the development of the intelligent automobile industry, the research and development process of lidar began to accelerate, and the vehicle-grade lidar that entered the mass production stage appeared in the mass production model at a lower price.

On the other hand, companies such as Huawei and DJI have joined the camp of research and development and manufacturing of lidar, making the purchase price of lidar further explored in a more adequate market competition environment.

However, in 2021, when lidar is "the first year of the car", the cost of lidar still accounts for the majority of the comprehensive cost of smart auto parts.

Based on this, when Zhou Hongyi talked about his views on smart cars, he proposed that the revolution of smart cars is not only an industrial revolution, but also a consumer revolution.

"At present, the highest cost of smart cars is lidar, but I believe that in the next three years, Huawei and other companies will be able to achieve the price of cabbage."

Although Huawei has previously said that it is trying to reduce the cost of 100-line lidar to $100 in the short term, as for the definition of "short-term", Huawei has not specified it.

For this remark, Luo Feng (pseudonym), a lidar industry insider, told Xinzhi Driving that Zhou Hongyi's purpose may be more to lower the purchase price of lidar and try to create a smart car service with a price of less than 150,000 yuan.

In addition, although several lidar companies contacted by new intelligent driving have said that there is still room for lidar costs to fall, its cost is unlikely to fall to $100 in three years.

Under this trend, we may need to pay attention to when and how lidar may reduce prices.

<h3>Lidar, the cost dilemma</h3>

For the definition of lidar "cabbage price", car companies and lidar players may have differences.

Luo Feng believes that the cabbage price of lidar should be 4,000 to 5,000 yuan; while another lidar company executive believes that in the case of mass production, the cost of lidar in the range of 500 to 1,000 US dollars is reasonable.

The views of the above two industry insiders are nearly ten times different from Zhou Hongyi's definition of cabbage price, which shows the large difference between the two sides' expectations for the price of lidar.

Previously, Sagitar Juchuang also told the new intelligent driving: there were customers who expected prices of about 1,000 to 2,000 yuan; and Innoviz revealed that the target price of most OEMs was a few hundred DOLLARs.

How to narrow the gap between the expected price of car companies and the real purchase price of lidar is the focus that lidar manufacturers must pay close attention to. At present, many lidar manufacturers have taken action towards this goal.

Innoviz CEO Omer Keilaf said in an exchange with the new smart driver that its new lidar product, ThenovizTwo, is smaller in size, consumes less power and has 30 times more performance than before, which was achieved with a 70% reduction in costs.

Omer Keilaf further introduced that the reasons for the InnovizTwo breakthrough are manifold: Innoviz first optimized the design of high-performance chipsets and reduced the number of components used, secondly, Innoviz simplified the optoelectronic design and manufacturing process; finally, they learned from the Research and Development Process of InnovizOne, reducing risk testing and other overheads.

Companies that reduce the cost of lidar by reducing the number of components, as well as Hesai Technology.

They mentioned to the new intelligent driving that the BOM cost (material cost) accounts for a large proportion of the current mass production of lidar costs, and the BOM cost is mainly in the laser transceiver module. If the cost of electronic components such as lasers, detectors, laser drives, and analog front ends of the module is reduced, the overall cost reduction of lidar can be achieved.

Therefore, Hesai Technology advocates the integration of components such as lasers on the chip to reduce material costs and installation and commissioning costs. Once the "Moore's Law" in the semiconductor field takes effect, the semiconductor process will continue to increase, and the cost of the chip will be further reduced.

The PandarXT launched by Hesai Technology last year adopts this method. By integrating the functions of dozens of circuit boards and hundreds of devices in traditional lidar into two circuit boards, the optical assembly process is simplified from dozens of times to one time, which makes the cost of lidar plummet, and the performance and reliability are improved.

However, the current price of lidar has not yet reached the psychological expectations of most OEMs, and there is still an insurmountable gap.

Moreover, some industry insiders believe that the current lidar is still in its infancy, and the cost reduction space of upstream suppliers is relatively large. But the paradox is that upstream suppliers need to see the potential of the consumer market before deciding whether to expand the supply of materials.

On the other hand, OEMs do have a demand for lidar, but the price of upstream suppliers cannot come down, and radar manufacturers have no way to better reduce costs.

"If there is a market of tens of millions of units a year in front of you, the price will definitely come down, but the shipment of tens of thousands of units a year is impossible to make the price very low."

In this case, it is necessary for industry players to join hands to promote the development of the intelligent driving market, and then upstream suppliers and radar manufacturers can grasp the wind direction in time and jointly launch some more integrated, lower-priced and more reliable radar products, so as to meet the product purchase price expectations of the main engine factory.

Livox also revealed to New Smart Drive that the way to reduce costs is a package of combination punches, and each supplier has to think about three questions:

Whether the design of the product is concise enough (directly determines the BOM)

Whether the manufacturing process and quality system of the product are sufficiently efficient to meet the standards (yield, consistency, ability to amortize costs in large-scale manufacturing)

Whether there is a large-scale order creation of high-quality head customers to create word of mouth continues to pull up demand towards a positive cycle of sales (supply chain cost reduction)

What the two have in common is that they need to promote the maturity of the supply chain and achieve price exploration through the pull of market scale. Otherwise, even if the upstream technology achieves a breakthrough, the downstream does not have customers who can give full play to the lidar technology, and it is useless for the development of the industry.

"There is an inevitable process of market education here." Livox said.

In addition, the market environment also affects the cost of lidar.

Luo Feng believes that in addition to controllable factors such as optimizing the supply chain and upgrading technology, the macro environment such as chip supply and Sino-US trade war are also important factors affecting the cost reduction of lidar.

With the development of lidar as a whole to solid-state lidar, the chip may become the main device controlling solid-state lidar. However, in the international market environment where chip shortages still show no signs of easing, the impact on lidar is undoubtedly significant.

Some analysts have predicted that the shortage of chips may cause a loss of $110 billion to the global automotive industry, of which sensor chips such as lidar chips account for 30% of them.

Under the comprehensive effect of its own technology, management restrictions, and external environmental impacts, it is difficult for industry players to predict the time and magnitude of the reduction in the cost of lidar, and the cabbage price mentioned by Zhou Hongyi may be delayed.

<h3>summary</h3>

Although it seems difficult to achieve a significant reduction in the overall cost of the industry in a short period of time, many players have achieved remarkable results in various ways.

Strobe, which was acquired by GM in 2017, said that integrating the entire sensor onto a single chip could reduce the cost of a single lidar by 99 percent, eliminating almost all costs.

John Krafcik, then CEO of Waymo, also said that by improving the hardware device and cooperating with the software under the same system, the cost of its self-developed lidar has been reduced by 90%.

Perhaps because of this, many companies have continued to try to reduce the cost and increase the efficiency of lidar, prompting the cost of lidar to fall from hundreds of thousands of yuan per unit price to tens of thousands of yuan in just ten years.

In the current situation where more aspirants are pouring into this track, the cost of lidar may be further reduced, and the resistance to the research and development of smart cars and driverless technologies will also be reduced.

At that time, a new era of automobiles will accelerate.

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