LightCounting updates its forecast for automotive LIDARs and VCSEL arrays used in 3D sensors of smartphones
The self-driving car was a dream deferred even before the COVID-19 outbreak brought the global economy to a standstill. By early 2020, plans to launch robotaxi services paused or scaled down as excitement over driverless cars gave way to recognition of the lengthy effort and heavy expense of bringing the technology to market. For most of 2020, the pandemic forced companies to pull their cars from the road, send employees to work from home, and look carefully at their balance sheets.
Despite these challenges, robotaxi tests in California reported 2 million miles of autonomous driving in 2020. It was down from 2.8 million miles in 2019, but it is very impressive, considering COVID-19 shutdowns. Cruise and Waymo accounted for 73% of the total miles reported in 2020, as shown in the figure below.
In an interview with the Financial Times given in January 2021, John Krafcik, Waymo’s CEO at the time, admitted that launching self-driving cars is “an extraordinary grind.” Back in 2018, Waymo announced plans to have 20,000 Jaguars and 62,000 Crysler minivans in its driverless fleet within 2-3 years. Yet as of October 2021, Waymo had only 700 autonomous cars on the road. It is clearly still a grind.
Waymo does offer robotaxi services to paying customers in Arizona now. It works, but it is far from perfect. It does not rain much in Arizona, but when it does the robotaxis are reduced to operating with drivers, since LIDARs can get confused by the puddles. The robotaxis do not make unprotected left turns either, so one left turn has to be substituted with 3 right turns, extending the ride time. It takes longer to get a ride as well, since robotaxis have harder times locating a customer. One advantage quoted by customers is that it costs less – no tips are expected by a robotaxi.
Robotaxis offer a great business case for operators because no driver is required. Several car rental companies made headlines in 2021 by disclosing plans to launch up to 100,000 robotaxis, but it will be “an extraordinary grind” just as Waymo’s former CEO admitted.
Some companies are taking the opportunity to demonstrate the promise of autonomous vehicles for contact-free delivery, but these efforts serve mostly to show how far the industry remains from large-scale, truly driverless deployments. There is a consensus that autonomous vehicle developers are in for a bumpy ride and that consolidation is inevitable. And there is also a widespread confidence that the project of building self-driving cars is more urgent than ever.
We've seen a shift in strategy from the companies in the sector. The approach a couple of years ago was a very ideological stance focused on concept vehicles. Today's industry approach appears to be more collaborative. Both the vendors and the customers are pragmatically looking for solutions to safety, security, and infrastructure requirements to support a fully autonomous future.
On a brighter side, there have been several blank-check deals that seek to cash in on the automotive-sensor boom or the tail end of it. Velodyne went public via SPAC in September 2020, Q4 2020 brought us the IPOs of Ouster and Luminar, and 2021 started with the IPOs of Aeva, AEye and Innoviz.
The LIDAR IPOs were not spectacular. The valuations have declined, and revenues reported by LIDAR suppliers are very modest, but LIDAR makers continue to attract capital as they work with automakers to introduce limited autonomous features.
In June 2021, Cruise, General Motors Co’s majority owned self-driving car subsidiary, announced a multi-year $5 billion line of credit with GM’s finance arm. "This bumps up Cruise's total war chest to over $10 billion as we enter commercialization," said Dan Ammann, chief executive of the Cruise unit, which also counts Softbank and Honda as minority investors.
GM invested $300 million into Momenta (https://www.momenta.cn/en/about.html) in September 2021, soon after this company raised $500 million of Series C funding in March 2021, led by SAIC Motor and a contribution from Mercedes-Benz.
The market may be in the ditch now, but we expect it to exceed $800 million in 2026. General Motors must be looking way beyond 2026 to get a return on its investments in Cruise but missing the transition to autonomous driving is too risky for any large automaker.
Level 2/3 modules for light vehicles are projected to be the largest product segment in 2022-2026. Level 3 is defined as autonomous driving “under certain conditions.” We expect that most of these deployments will be really level 2 or 2.5, which always require the driver’s attention, but improve safety significantly. A simple way to describe it is “advanced cruise control” – far less than fully autonomous driving. Safety is a top priority for consumers and car manufacturers are willing to make the investments necessary to improve it.
Autonomous trucks are expected to be the second largest market segment in 2022-2026, and robotaxis a distant third. The adoption of Level 1 LIDAR-based sensors in vehicles with pre-collision system/automated emergency braking (AEB) has declined, and we forecast it to phase out completely by 2022 in favor of Level 1 RADARs or Level 2/3 LIDARs.
All these factors combined will increase the market size by 8x over the next 5 years, helped in part by a market decline in 2020-2021. It will be about 2.5x increase from the previous peak in 2017.
More information on the report is available at: Market reports