Lidar Sensors The Next Growth Market in Chinese Hands

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The market for lidar sensors is booming - and is almost entirely in the hands of Chinese suppliers, who produce in large quantities and at very low cost. Can Western manufacturers still turn the tide?

According to analysts from the Yole Group, more than 1.6 million lidar systems worth almost USD 860 million were installed in cars and robotaxis worldwide in 2024, more than twice as many as in the previous year (+67%). 92% of the lidar systems were installed by Chinese OEMs.

And these systems come almost exclusively from Chinese suppliers. They have captured a 93 percent share of the passenger car lidar market. In the overall automotive market, which includes passenger cars and robotaxis, the situation is only slightly different. According to Yole, Chinese suppliers accounted for 89 percent of this market.

According to forecasts, the market should continue to grow explosively. Market observers expect the biggest increase in passenger cars. Here, the market volume is set to more than triple between 2025 and 2030: From one billion to 3.3 billion US dollars.

Three Share 76 Percent Market Share

Three Chinese suppliers appear to be well on their way to largely dividing up the automotive lidar market among themselves. According to Yole, Hesai, Robosense and Huawei together accounted for three quarters of the market share in 2024. In the previous year, it was still 66 percent. Silicon Valley company Seyond (Innovusion until 2023) is the only Western provider still playing a significant role here with 13%.

Figures published by the manufacturers themselves suggest somewhat different market shares. According to Hesai, sales more than doubled to half a million units in 2024. Robosense reports that it delivered around 520,000 lidar systems for cars in 2024 (+114%). Citing figures from Gasgoo Research, Robosense claims to have been the market leader in automotive lidar sensors in 2024 with a 33.5% share. Meanwhile, Hesai announced at the beginning of October that it had become the first company in the world to produce more than one million lidar sensors within one year - by September. This also includes sensors for robots, a field in which demand is also "exploding".

Are the western manufacturers out of the game now? Not at all, says Christophe Minster, Vice President responsible for Lidar at supplier Valeo. "Non-Chinese suppliers will be able to expand their market share in a growing market," he tells the German  magazine Automobil Industrie. His argument: not all lidar is the same. "So far, Chinese suppliers have delivered sensors for level 2 systems in large quantities. Non-Chinese suppliers will benefit from the increasing number of Level 3 systems and market convergence as well as the growing safety requirements for Level 2+ systems."

Value is Becoming more Important than Quantity

In fact, the Chinese OEMs use lidar sensors for assistance systems where the driver remains fully responsible for driving the vehicle (up to level 2) and the Western OEMs use cameras and radar alone. The traditional OEMs generally only consider lidar sensors to be necessary from level 3, i.e. when the vehicle temporarily takes over the driving task and responsibility completely.

Valeo manager Minster emphasizes: The lidar market will "shift from quantity to value" due to future automation at Level 3 and 4. The level 2 systems represent "a completely different technological challenge to the implementation of level 3, where safety, reliability and guaranteed performance are essential".

Valeo has experience in this field. In 2018, the supplier realized the first known lidar series application in the Audi A8, which was then not allowed to drive autonomously (Level 3) due to regulatory problems. Valeo later introduced new generations of Scala sensors in the Mercedes-Benz S-Class, which received the first Level 3 approval, and has sold "several hundred thousand" lidar systems to date, according to Valeo. Production will "continue to grow rapidly".

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High Quantities - Falling Costs

Why are so many lidar systems being installed in China? In an interview with a Yole analyst, Hesai Head of Sales Bob in den Bosch cites, among other things, the great efforts being made by OEMs there to drive forward automated driving, the great interest shown by customers in smart vehicles and a mature supply chain that enables efficient and cost-effective production.

With increasing quantities, the previously high prices for lidar sensors are falling sharply. For example, the ATX lidar sensor from Hesai is increasingly available in vehicles in the USD 15,000 to USD 20,000 price range. By 2024, one in four new vehicles in the USD 20,000 price range would be equipped with lidar, according to figures from Gasgoo Research.

This is in line with the statements made by Hesai's competitor Robosense. As of April 2025, ten Chinese models had already been equipped with Robosense lidars at prices between the equivalent of 21,000 and 28,000 US dollars (150,000 to 200,000 RMB). In 2024, the MX lidar was launched on the market for less than 200 US dollars. At the same time, however, there is a growing demand for high-performance lidar systems. The trend towards level 3 and 4 vehicles will also drive sales, as several lidar sensors are often installed in each vehicle. Volkswagen subsidiary Moia, for example, equips its Level 4 ID Buzz with nine lidar systems each - from Israeli supplier Innoviz.

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Lidar Could Become a De Facto Standard

The Chinese lidar market could receive a further boost from the government. Robosense recently pointed out that lidar sensors were explicitly mentioned for the first time in the draft for new approval regulations for vehicles with level 2 assistance. According to Robosense, lidar technology is mentioned several times as a suitable method for detecting and avoiding dangerous situations where cameras or radar sensors would be unable to cope. It could therefore become a quasi-standard.

The fact that lidar sensors for level 3 have to meet higher requirements than those for level 2 is also seen by Chinese competitors. Hesai manager Bob in den Bosch assumes that the lidar market will be split in two: Systems for 200 US dollars or less primarily for level 2 vehicles and high-performance sensors costing 500 US dollars or more that are used for highly automated driving (level 3+).

From level 3, says Christophe Minster from Valeo, competition will not be decided on price alone: "It's a competition of trust, safety and demonstrable quality in some of the most highly regulated markets in the world and the highest safety requirements." However, Chinese suppliers are by no means leaving the market for higher-performance sensors to Western OEMs. Hesai, for example, says it is already the global market leader in lidar sensors for level 4 robotaxis.

Hesai Supplied Top European OEMs

And Chinese suppliers are setting their sights on other Western markets. In March, for example, Hesai announced a contract with a top European OEM to supply long-range lidar sensors for a new global platform. The supply agreement extends into the next decade. The Reuters news agency reported that the customer was Mercedes-Benz, but the manufacturer did not confirm this.

However, Chinese OEMs also use lidar sensors from the West. Seyond has been supplying Nio for some time, and Chinese media recently reported that Seyond had secured a major order for several hundred thousand lidar sensors from another Chinese manufacturer. Seyond claims to have already put 500,000 lidar devices on the road since the start of mass production in 2022. The company is currently producing 20,000 to 25,000 units per month. Hesai emphasizes that its fully automated production lines can churn out a finished lidar sensor every 20 seconds.