Light Detection and Ranging Lidar Technology, Described by Musk as "Freaking Stupid", Conquers the Global Market

Related Vendors

FAULHABER Drive Systems

Wuxi InfiMotion Technology Co., Ltd.

Lidar is yet to make its breakthrough in the western world, but in China it is already celebrating one success after another. Leading manufacturer Hesai is enjoying impressive success not only in the automotive sector, but also in industrial robotics.

If there is one technology that has long been doubted, but is now taking giant strides in conquering the global market, it is lidar. The sensors, which use light waves to measure distances and speeds, have finally arrived on the market with the growing popularity of ADAS driver assistance. At the same time, "embodied intelligence" in humanoid and other robots is creating another market that is also growing rapidly.

Probably the most prominent opponent of lidar is Elon Musk, who has described the technology in various public appearances over several years as "freaking stupid", as "expensive and unnecessary" and as a "fool's errand", in other words as a futile labor of love, at least for use in cars. To this day, there is no Tesla model with lidar. But the majority of the Chinese industry took a different path. And so the success story of lidar technology today is a predominantly Chinese story, which, unlike in the case of electric cars, was not inspired by the pioneer Elon Musk, but has prevailed against his judgment.

Flying High for Lidar

The fact that 2025 will be a new high point for lidar manufacturers can be seen from the Hesai Group's current plans. As the CFO of the Chinese company recently revealed in an interview with the Financial Times, Hesai is planning to build its first factory outside China this year, with production set to begin as early as next year. The location has not yet been revealed. Hesai's business has exploded recently. In 2024, the company earned the proud title of the world's first listed lidar manufacturer to be profitable for a full year.

The company already supplies 22 Chinese and international car manufacturers (as of February 2025), who install their lidar devices in 120 different models produced in the People's Republic. This market is still relatively small, but it is growing very, very fast. In 2024, Hesai delivered 501,900 of its products, 126 percent more than in the previous year. In December 2024, Hesai became the first lidar manufacturer in the world to sell more than 100,000 units in a single month.

Hesai and Mercedes-Benz

On March 11, 2025, Reuters exclusively reported that Hesai had signed a supply contract with Mercedes-Benz, allegedly for the use of its lidar devices in vehicles produced outside of China. If the report is confirmed, Hesai would once again have a world first to celebrate - it would be the first Chinese lidar manufacturer whose devices are fitted as standard by an international car manufacturer outside China.

Reuters quotes a source who says that Mercedes struggled for months with its decision in favor of the Chinese supplier because there were legal and geopolitical risks to consider. Since the start of Donald Trump's second term in office, the USA has been trying even harder than before to dissuade not only American but also European car manufacturers from buying Chinese components. The American lidar manufacturer Luminar is a direct competitor of Hesai.

But in the end, the quality and price of Hesai's lidar devices tipped the scales in favor of Mercedes-Benz, according to Reuters. Hesai itself confirmed a "multi-year, exclusive contract with a European OEM" in a press release on March 12, without naming the manufacturer—presumably due to the aforementioned geopolitical sensitivity.

Another part of the company's product portfolio—sensors for embodied intelligence—is growing even faster than the business with devices for ADAS or robotaxis. This segment includes a range of lidar devices for industrial and humanoid robots, robotic dogs, smart lawnmowers and similar devices, sales of which are growing rapidly. Lidar for robotics and the automation of manufacturing plants currently accounts for around 20 percent of Hesai's turnover—and the trend is rising rapidly. The Chinese are also gaining more and more customers in this area because they are unbeatable in terms of price and still deliver good quality.

BMW is also on Board

In January of this year, Hesai announced that it was supplying lidar sensors for BMW's "Automatic Driving In-Plant" (AVM) program. The system supplier Embotech and the software company Outsight are also involved in the project. AVM means that in the production of the BMW 5 and 7 Series at the Dingolfing plant and in the production of the MINI Countryman and other BMW models in Leipzig (Germany), cars that have just been completed are driven autonomously from the production line to the first driving test and then to their parking space, which saves high personnel costs.

The company is "proud" to supply leading lidar technology to BMW together with Embotech and Outsight, David Li, CEO and co-founder of Hesai, told reporters in China. However, the next big boost in sales of lidar devices is expected in China itself, as the regulatory authorities here are already preparing for the approval of Level 3 autonomous driving. Cars without lidar are likely to find it difficult to obtain approval for this.

For the current year, Hesai expects sales of 1.2 to 1.5 million lidar devices. 200,000 of these will be lidar for robots. This would mean that the manufacturer's business would again grow by 139 to 200 percent in terms of unit sales within a year. In terms of profits, Hesai CFO Andrew Fan expects a 14-fold increase from 14 million yuan (around 1.8 million euros or 20 million USD) last year to 200 to 350 million in the current year (to 25.5 to 44.4 million euros or 28 to 50 million USD) by 2025. Either all these customers are "Freaking Stupid" ... or Elon Musk was wrong. (sb)

Secure and Compliant Authentication in Laboratories

Secure & Contactless User Authentication at GMP/GLP