Over the past three years, Lidar technology has garnered over $1B in investments across over 70 startups, and has even prompted multi-million-dollar lawsuits between tech giants (Uber and Waymo). This past month, Waymo announced it would start selling Lidar to non-automotive partners, prompting shock waves throughout the Lidar landscape. In light of this hype, NewtonX analyzed the Lidar market through a survey issued to 200 executives at Lidar startups and tech companies that use Lidar technology as a core component of their product(s). Based on the survey results, we outline what Lidar is, why tech giants are battling for access to it, and what the outlook for the market is.
What is Lidar, And Why is Competition For it So Steep?
Lidar, which stands for Light Detection and Ranging is a form of remote sensing that uses light to measure variable distances. The technology offers an unparalleled level of depth and dimension for detecting the distance between an object (like a car) and the objects surrounding it (like people) to create a 3D rendering of an object’s environment. Lidar sensors have faster detection than any other traditional sensors (such as radar or cameras), which is why it’s used for self-driving cars and robotics. Currently, every single autonomous vehicle manufacturer uses Lidar other than Tesla.
Its functionality is not the only reason that Lidar startups and manufacturers are so sought after right now, though: in 2016, the industry standard cost per sensor was $75,000 — a price much too steep for scalable manufacturing. In 2017, Waymo decreased the cost by 90% to $7,500, but Waymo has protected its technology from competitors. Because of this, 70+ startups and dozens more established companies are racing to lower costs at the same scale as Waymo. The Lidar market is extremely distributed, as automakers and other buyers have yet to settle on a manufacturer that is reliable and affordable enough for mass market production.
Velodyne Lidar, a Silicon-Valley based Lidar manufacturer, is considered the leader in the space, and was used by Waymo in the company’s early days. The company received a $150M investment from Ford and Baidu, and recently partnered with Nikon and Veoneer for manufacturing and mass production. Despite this move and numerous other partnerships (including with Ford), Velodyne still struggles with price and mass production. The company’s HDL-64E, which tops many of the roofs of the self-driving prototypes in SF, costs a whopping $75,000 still. It’s no wonder that the NewtonX survey analysis revealed that the AV lidar market is expected to generate only $2.9B in revenue by 2030.
Eventually, the market will pare down to under ten major manufacturers, but until the technology becomes reliable and affordable enough for mass market, most automakers will refrain from placing all their eggs in one basket.
2025 and Beyond: What the Future of Lidar Technology Looks Like
Lidar is still projected to be the best bet for remote sensing, not only for self-driving cars but also for other robotics manufacturers. As long as companies continue to invest in the technology and manufacturing, the costs, bulk, and accessibility of Lidar technology will improve. Waymo’s announcement that it will begin selling Lidar technology to non-auto companies isn’t just a move to increase revenue; it’s also an avenue into scaling the technology in order to make it more affordable.
Newer solid-state devices that are currently being piloted are designed to sell for under $10,000, and eventually for under several hundred dollars once they reach mass market. Meanwhile, Tesla, one of the first companies to go after the autonomous vehicle sector, does not use lidar at all — instead, the company’s cars use a combination of radar, cameras, and proprietary software.
Over the next decade, the Lidar market will become less competitive as 5-6 leaders in the space emerge. When this happens, companies that are currently hedging their bets across multiple Lidar startups will increase spend and investment with a single provider.