Horizon Robotics: Assessing Revenue Growth Amid Persistent Losses in the Autonomous Driving Sector

The autonomous driving sector is a high-stakes arena where technological innovation and financial discipline collide. Horizon Robotics (9660.HK), a Chinese leader in advanced driver-assistance systems (ADAS) and autonomous driving (AD) solutions, has carved out a unique position through its proprietary hardware-software stack and deep partnerships with domestic automakers. Yet, as the company transitions from niche ADAS offerings to mass-market autonomous driving systems, it faces a critical juncture: balancing aggressive R&D investment with profitability. This article evaluates Horizon's long-term strategic positioning, technological edge, and financial sustainability in a market poised for explosive growth.

Revenue Growth and Strategic Shift to Autonomous Driving

Horizon's 2025 financial projections underscore a dramatic shift in its business model. Total revenue is expected to rise 47% year-over-year to CNY 3.5 billion, driven by its Automated Driving Systems (ADS) segment, which is forecast to generate CNY 1.3 billion—nearly five times its 2024 revenue. By 2030, ADS is projected to account for over 70% of total revenue, up from 12% in 2024. This pivot reflects a broader industry trend: automakers are prioritizing full autonomy over incremental ADAS upgrades.

The company's shipment volumes for ADS are set to surge from 450 units in 2024 to over 13,000 by 2030, fueled by demand from partners like BYD and Volkswagen. Meanwhile, the ADAS segment, once a growth engine, is expected to decline in revenue and unit shipments, signaling Horizon's strategic realignment. This shift is not without risk—ADS development requires substantial capital, and the path to profitability remains distant. Horizon's net loss is projected to narrow gradually, with a turnaround expected by 2027, but EBITDA and EBIT remain negative through 2025.

Technological Edge: Proprietary Chips and Ecosystem Integration

Horizon's competitive advantage lies in its vertically integrated technology stack. The Journey™ series of system-on-chip (SoC) platforms, including the Journey 5 and Journey 6, are designed for energy efficiency and high computational power (up to 128 TOPS at 30W). These chips power Horizon's SuperDrive™ AD solution, which replicates human-like driving behavior in complex urban environments. The company's co-optimization of hardware and software—such as its BPU (Brain Processing Unit) and AI algorithms—enables seamless perception, planning, and control, a critical differentiator in a market dominated by external chip providers.

Moreover, Horizon's ecosystem-building efforts, including platforms like Horizon OpenExplorer and TogetheROS, allow OEMs and developers to customize and iterate rapidly. This approach fosters collaboration and accelerates time-to-market for partners. Strategic alliances, such as its joint venture with Volkswagen (Carizon) and a 2025 partnership with DENSO, further solidify its position in global supply chains.

Competitive Landscape and Long-Term Challenges

While Horizon dominates the Chinese ADAS market (35.9% share in H1 2024), it faces mounting pressure from global players like NVIDIA and Mobileye. NVIDIA's DRIVE Orin and Thor platforms, already adopted by Li Auto and Xiaomi, offer comparable compute power and global validation. However, Horizon's deep integration with domestic OEMs and alignment with China's policy-driven push for self-reliance in smart driving technology provide a buffer.

The company's long-term success hinges on its ability to scale higher-level autonomy (Level 4/5) and maintain cost advantages. Its focus on vision-based systems, which minimize reliance on expensive LiDAR, positions it to offer cost-effective solutions for mass-market EVs. Yet, as automakers demand more advanced capabilities, Horizon must continue to innovate in AI software stacks and sensor fusion to stay ahead.

Financial Sustainability and Investment Considerations

Horizon's liquidity profile remains robust, with a current ratio of 13.5x in 2024, reflecting strong balance sheet discipline. However, its path to profitability is contingent on R&D execution and market adoption. The company's 2027 net profit forecast of CNY 1.58 billion hinges on ADS revenue growth and cost optimization. Investors must weigh the risks of prolonged losses against the potential for market leadership in a sector expected to generate $300–400 billion in revenue by 2035.

Conclusion: A High-Conviction Bet on China's Autonomous Future

Horizon Robotics is a compelling case study in the trade-offs between innovation and profitability. Its strategic pivot to ADS, coupled with a vertically integrated tech stack and strong domestic partnerships, positions it to dominate China's autonomous driving ecosystem. While global competition and near-term losses pose risks, the company's first-mover advantage, policy tailwinds, and ecosystem-building efforts justify a long-term investment thesis. For investors with a 5–7 year horizon, Horizon represents a high-conviction opportunity to capitalize on the next phase of China's smart mobility revolution.

Investment Advice:
- Buy for long-term growth: Horizon's ADS roadmap and R&D focus align with the trajectory of the autonomous driving market.
- Monitor R&D efficiency: Track how effectively the company scales its Journey chip series and reduces per-unit costs.
- Diversify exposure: Consider pairing Horizon with global players like NVIDIA to hedge against regional risks.

In an industry where patience is a virtue, Horizon Robotics offers a rare blend of technological ambition and market execution—a recipe for outperforming in the long run.