Hesai Group: Pioneering China’s LiDAR Standard and Dominating the Autonomous Driving Revolution

The automotive industry’s shift toward autonomy and advanced driver-assistance systems (ADAS) has created a critical need for standardized technologies. Among these, LiDAR—long a bottleneck due to inconsistent performance and safety standards—has now found a path forward in China. Hesai Group’s leadership in launching the country’s first automotive LiDAR standard (GB/T 45500-2025) marks a turning point, positioning the company as a global leader in shaping the future of autonomous driving.

The LiDAR Standard: A Blueprint for Industry Growth

The GB/T 45500-2025 standard, finalized in 2024 after a three-year collaboration involving over 50 LiDAR producers and automakers, establishes rigorous benchmarks for ranging accuracy, angular resolution, environmental durability, and anti-interference capabilities. By unifying testing methodologies and safety requirements, the standard eliminates fragmentation and accelerates adoption of LiDAR in ADAS and autonomous vehicles. Its adoption by the American National Standards Institute (ANSI) in 2024 further underscores its global relevance, with partnerships from industry giants like Intel, Bosch, and Continental ensuring alignment with international safety and cybersecurity protocols.

This standard is not just a regulatory milestone—it’s a market catalyst. By reducing technical uncertainty, it lowers barriers for automakers to integrate LiDAR, a key component for achieving Level 3–5 autonomy. Hesai’s role in leading this effort solidifies its reputation as a trusted innovator, enabling partnerships with top-tier automakers like BYD, GAC Aion, and Didi Autonomous Driving.

Product Innovation and Market Penetration

Hesai’s Infinity Eye lidar solution, unveiled in 2024, exemplifies its technical prowess. This modular system supports autonomy levels from L2 to L4, with configurations tailored for different use cases:
- Infinity Eye A (L4): Combines four AT1440 ultra-high-definition lidars (1,440 channels, 34 million points/sec) and four FTX fully solid-state blind spot lidars for 360° coverage.
- Infinity Eye B (L3): Features the ETX ultra-long-range lidar (400m range at 10% reflectivity) and FTX units.
- Infinity Eye C (L2): Uses the ATX lidar (200m range, 256 channels), already selected by 11 OEMs and with 50,000 units delivered by mid-2024.

The OT128 lidar, launched at the 2024 IAA Transportation Fair, further extends Hesai’s reach. A 360° mechanical, automotive-grade sensor with a 200m detection range, it shares 95% of components with its best-selling AT128P, ensuring cost efficiency. This design philosophy—85% component commonality across products—drives scalability, enabling Hesai to project 1.2–1.5 million lidar deliveries in 2025, backed by a 2 million-unit annual production capacity.

Financial Momentum and Operational Excellence

Hesai’s Q3 2024 results reveal a company on fire:
- Net revenue: RMB539.4 million (US$76.9 million), up 21.1% YoY, driven by ADAS demand and high-margin NRE services.
- Lidar shipments: 134,208 units (up 182.9% YoY), with ADAS shipments surging 220% YoY to 129,913 units.
- Gross margin: Improved to 47.7% (vs. 30.6% in 2023), reflecting cost optimization and economies of scale.
- Net loss reduction: Narrowed to RMB70.4 million (US$10 million), a 50.4% improvement YoY, with full-year non-GAAP profitability expected in 2024—a first for the automotive LiDAR sector.

Hesai’s cash reserves (RMB2.53 billion as of Q3 2024) and its strategic hires, including CFO Andrew Fan, signal confidence in scaling operations and R&D.

Competitive Position and Future Outlook

Hesai’s 100+ design wins across 22 automotive OEMs by early 2025, including partnerships with SAIC Volkswagen and a Top 3 Japanese automaker, highlight its global reach. Its collaboration with Didi Autonomous Driving and GAC Aion to launch China’s first production-ready L4 Robotaxi by 2026 further cements its leadership in high-autonomy applications.

Risks and Considerations

While Hesai’s trajectory is compelling, risks remain. Intense competition from rivals like Luminar and Aeva could pressure margins. Additionally, delays in autonomous vehicle adoption or regulatory changes might slow demand. However, Hesai’s standard-setting influence, production scale, and OEM partnerships mitigate these risks, positioning it as a low-cost, high-quality supplier with defensible market share.

Conclusion: Hesai’s Dominance in LiDAR is a Buy Signal

Hesai’s leadership in China’s first automotive LiDAR standard, paired with its production capacity (projected 2 million units/year by 2025) and financial turnaround, makes it a standout investment in the autonomous driving ecosystem. With 1.2–1.5 million lidar deliveries expected in 2025, a 200,000-unit Q4 2024 target, and partnerships securing its place in 75 vehicle models globally, Hesai is poised to capture a growing LiDAR market projected to exceed USD 5 billion by 2030.

The company’s ability to achieve non-GAAP profitability in 2024, despite a historically capital-intensive industry, signals strong execution. Investors should take note: Hesai isn’t just a supplier—it’s the architect of a new era in autonomous driving, and its stock (if listed) would likely reflect this dominance. Until then, its performance metrics serve as a proxy for its rising value.

In a sector where standards define winners, Hesai has already written its name in gold.