In recent years, the automotive industry has come under the pressure of evolving consumer demands, global climate change concerns, and the imperative to reimagine the future through innovation. In response, tech developers have launched next-generation technologies and tools, with a focus on road safety, fuel efficiency, driver convenience, and security. Collectively referred to as “Auto Tech”, these technologies comprise Light Detection and Ranging (LiDAR) and other sensors, safety and driving assist tools, autonomous and connected passenger vehicles, data capture and analytics platforms, infotainment, and Internet of Things (IoT)-enabled vehicle security. Notably, these auto technologies are synergistic and inter-dependent. Most have already been commercialized, with the exception of the autonomous passenger vehicles segment, which is still in the pre-commercial stages.
The Covid-19 pandemic took a toll on auto tech developers, especially autonomous vehicle companies, related LiDAR makers, and infotainment providers. Meanwhile, the impact on segments like connected vehicle platforms and IoT-enabled vehicle security was minimal, as automakers strived to stay competitive through the software side. Data capture and analytics also remained relevant, with vehicle data proving useful to analyze the impact of the Covid-19 pandemic on mobility.
Autonomous vehicle startups including Pony.ai, Beep, and Aurora and incumbent General Motors’ Cruise shifted their focus toward autonomous cargo delivery, as opposed to ferrying passengers, to cope with the decline in passenger travel and to reap the benefits of rising demand for autonomous contactless deliveries.
Meanwhile, some companies including autonomous vehicle developers like Ford and its self-driving tech unit Argo AI, Waymo, Motional, and in-vehicle infotainment service provider Vugo suspended their operations or delayed the commercial launch of their respective services during the Covid-19 pandemic period.
However, moving forward, autonomous vehicle tech is likely to come back stronger, shifting focus toward safer logistics and changes in commuting methods in a new normal era.
Startups dominate the auto tech space, particularly in segments like LiDAR and other sensors, autonomous passenger vehicles, and data capture and analytics. Despite being relatively capital-intensive, segments like LiDAR and other sensors and autonomous passenger vehicles have attracted significant startup activity, boosted by the self-driving vehicle industry and the declining cost of autonomous technology. For example, Waymo managed to bring its Laser Bear Honeycomb LiDAR prices down by around 90% to roughly USD 7,500 by 2019 from the industry norm of USD 75,000 a few years before.
Almost all the players in the LiDAR and other sensors, connected vehicles, data capture and analytics, IoT-enabled vehicle security, and infotainment segments have commercialized their product offerings and today operate either in early or growth stages. However, most of the autonomous vehicle tech developers and some safety and driving assist tools providers are yet to commercialize their product offerings and are hence classified as seed or pre-seed.
Most of the incumbents operating in the space are either automotive companies such as Toyota, Tesla, and General Motors or tech giants such as Google, Amazon, Nvidia, and Apple. Incumbents dominate the infotainment segment, likely given the level of research and development (R&D) required to truly distinguish these offerings in response to pressing consumer demands. Incumbents also hold a notable presence in autonomous passenger vehicles, safety and driving assist tools, and connected car segments.
Notably, most disruptors in the auto tech industry come from the LiDAR and other sensors segment, which has collectively drawn more than USD 9 billion in funding as of April 2022. Most of the LiDAR-related startups are publicly listed and have commercial-scale customers. Luminar Technologies and Innoviz Technologies are considered the most significant pure-play LiDAR startups in terms of funding (raised USD 995.5 million and USD 482 million, respectively) and are listed on Nasdaq. Both companies have commercial customers but were yet to commence series production as of April 2022.
Autonomous passenger vehicles represent another segment attractive to investors, despite the tech being in the pre-commercialization stage. Collectively, this segment had raised over USD 7 billion as of April 2022. Argo AI and Aurora Innovation are the most well-funded startups in this space, having raised USD 3.6 billion and USD 2.1 billion, respectively, while the latter is also listed on Nasdaq. Notably, these companies are the only autonomous vehicle startups that also develop in-house LiDAR sensors for their vehicles.
The industry also includes several companies that have been listed, all via special purpose acquisition companies (SPACs). The companies that went public via SPAC deals include seven LiDAR makers Luminar Technologies, Aeva, Ouster, Innoviz Technologies, AEye, Quanergy Systems, and Cepton Technologies. SPAC deals also include data capture and analytics providers like Ottonomo and Wejo and autonomous vehicle startup Aurora Innovation. Peer autonomous vehicle developer Argo AI has also announced plans to go public in 2022 but via a traditional initial public offering (IPO).
Luminar Technologies manufactures LiDAR sensors for passenger cars, commercial trucks, and robotaxis as well as safety and driving assist tools. Its key LiDAR sensors and other perception software product offerings include “Hydra” and “Iris,” while “Sentinel” offers a full-stack autonomous software system for vehicles. Introduced in 2018 for testing and development, Hydra is a long-range detection LiDAR sensor that can sense objects 500 meters away over a field of view (FoV) of 120 x 30 degrees. Its next-generation product, Iris, launched in 2019, uses similar components as Hydra, but is more compact and cost-effective. Sentinel, unveiled in March 2021, is a full-stack autonomous software system for series production vehicles that offers proactive collision avoidance warnings and highway autonomy.
The company has one engineering and manufacturing facility in Orlando, Florida (also headquarters), two in Palo Alto, California, and one in Colorado Springs, Colorado. It is also working with electronic company Celestica on a high-volume manufacturing facility in Mexico, with plans to get it online by 2H 2023.
Key customers and partnerships
As of September 2022, the company had 50+ commercial customers including Volvo, Daimler, Toyota, Hyundai, Intel's Mobileye, Mercedes-Benz, and Nissan; autonomous trucking companies Kodiak Robotics and Torc Robotics; and mobility tech company ECARX. The partners were in the process of validating the technology as of December 2021, and the company was planning to commence commercial volume production of Iris by end 2022.
The company has manufacturing partnerships with electronic companies Celestica and Fabrinet (May 2021) and Zenseact, a unit of Volvo cars (March 2021). Luminar has also acquired several companies including chip design and component suppliers Black Forest Engineering (2018) and OptoGration (July 2021) and high-performance laser manufacturer Freedom Photonics (March 2022).
Funding and Financials
Luminar generated revenue of USD 31.9 million and incurred a net loss of USD 238.0 million (USD 0.69 loss per share) during the year ended December 2021. The company has been listed on Nasdaq since December 2020, via a merger with a special purpose acquisition company (SPAC), which valued the combined entity at USD 3.4 billion (August 2020).
LiDAR and other sensors:
Safety and driving assist tools:
Autonomous passenger vehicles:
Most incumbents in the auto tech space develop autonomous passenger vehicles and safety and driving assist tools. Well-established automakers such as Tesla, Toyota, and General Motors (GM) and tech giants like Google, Apple, Nvidia, and Amazon alike operate in these segments.
Several incumbents operate across multiple segments in the auto tech industry, likely driven by the interrelated nature of the tech. Players like Bosch, Tesla, Toyota, Nvidia, and GM operate in as many as three to six segments. Only a few incumbents—Velodyne LiDAR, Apple, Amazon, Bridgestone Americas, and Intertrust—appear to specialize in a specific technology and operate in a single segment.
Acquisitions represent a popular means for incumbents to enter the auto tech space or strengthen their offering by acquiring related tech startups that can complement in-house product development efforts. In fact, several well-known incumbents such as Amazon, Intel, and Samsung only entered the auto tech space after acquiring related startups—Amazon via the acquisition of Zoox, Intel via Mobileye, and Samsung via the addition of Harman International Industries. Meanwhile, companies such as Google, GM, Tesla, Toyota, and Apple engage in in-house product development, coupled with inorganic growth to support tech development.
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