According to the Zhito Finance APP, Sinolink has released a Research Report stating that as the cost of Lidar continues to decrease, the technology matures, and autonomous driving capabilities improve, the number of vehicles equipped with Lidar is expected to increase in the coming years, further boosting the growth potential of Lidar. According to data from YOLE, in 2023, Chinese manufacturers dominate the global market for automotive Lidar, collectively accounting for 88% of the global market share. At the same time, the Industry cost curve is steep, and with the subsequent increase in product delivery volumes, cost reduction in procurement, improved efficiency in production processes, dilution of fixed costs through economies of scale, and stabilization of research and sales personnel, profitability is expected to improve significantly. Price deflation is easing, gross margin is trending upwards, and the profitability inflection point for leading companies is imminent.

Sinolink Securities' main points are as follows:

Demand: High-level intelligent driving from 1-N, Robotaxi from 0-1, the Lidar market is experiencing an explosion.

High-level intelligent driving from 1-N, Robotaxi from 0-1. 1. It is expected that the penetration rate of high-level intelligent driving will reach 15% by 2025. Under the conditions of policy easing, cost reduction, high computational power chips on vehicles, and software advancements toward end-to-end trends, the penetration rate of high-level intelligent driving is expected to reach 5% in 2024, and with about 0.2 million vehicles being concentrated for installation, it is expected to reach 15% by 2025. 2. The Robotaxi solution is expected to reach a commercial inflection point. The Robotaxi industry is accelerating changes, with multiple forces from policy, technology, and Operation driving costs per kilometer to rapidly align with Online Car-hailing costs, and large-scale operations are likely to lead to a turning point.

Lidar has become a mainstream solution, with the majority of domestic high-level intelligent driving vehicles equipped with Lidar, and Robotaxis generally come standard with multiple Lidar units. Lidar has high environmental perception accuracy, can directly obtain information such as distance, angle, reflection intensity, and speed of targets, and has strong anti-interference capability. Most domestic OEMs adopt a multi-sensor fusion technology route, especially for models targeting advanced NOA functions that commonly feature Lidar. Only a few automakers are exploring visual solutions by emulating Tesla's approach of removing Lidar, relying on millimeter-wave radar and cameras for perception: as the cost of Lidar continues to decrease, the technology matures, and autonomous driving capabilities improve, the number of vehicles equipped with Lidar is expected to increase in the coming years, further boosting the growth potential of Lidar.

The installation volume of Lidar is in a high growth period, and the market space is vast. Sinolink predicts that by 2029, the Lidar market will reach 3.631 billion USD, with a CAGR of 39.4%. Among them, the Lidar market for Passenger Vehicles and light Commercial Vehicles will be 2.993 billion USD, with a CAGR of 65%; the Lidar market for Robotaxi will be 0.638 billion USD, with a CAGR of 19.1%. The application fields of Lidar include not only vehicles but also robotics and industrial sectors. Leading players in the Lidar market are also planning products targeting robotics, further expanding the long-term growth potential.

Technical route: The 905nm + one-dimensional rotating mirror scheme is the current optimal solution.

ToF (Time of Flight) and FMCW (Frequency Modulated Continuous Wave) are the two main working principles, while the structural design of the Lidar revolves around four major modules: transmission, scanning, receiving, and control. Meanwhile, the three main technical routes of mechanical, hybrid solid-state, and pure solid-state form the core competitive landscape of Lidar in the market. In the transmission module, the 905nm wavelength is the current mainstream choice. The use of a 905nm wavelength light source with EEL lasers is the prevailing solution, achieving a good balance between cost and performance, suitable for medium to short-range detection. Fiber lasers typically employ a 1550nm wavelength light source, which offers higher power output and longer detection distance, but at a higher cost, mainly used in high-end autonomous driving scenarios; regarding the scanning scheme, the one-dimensional rotating mirror scheme has stable performance and lower manufacturing costs.

The four modules of Lidar are interrelated and collectively determine the overall performance and application effects. The combination of the 905nm wavelength laser and the one-dimensional rotating mirror scanning scheme achieves the best balance of performance, cost, and reliability under current technical conditions, becoming the mainstream technical route choice.

Leading companies will benefit first from the industry boom, focusing on both complete machines and supply chain leading companies.

Complete machine end: The market concentration is relatively high, and cost steepness is significant, leading companies are on the verge of profitability. Latecomers have swiftly risen. According to YOLE data, in 2023, looking at the global market for vehicle-mounted Lidar suppliers, Chinese manufacturers dominate, accounting for 88% of the global vehicle-mounted Lidar market. At the same time, the industry cost curve is steep; as product delivery volumes rise, purchasing cost reductions, production process efficiency improvements, scale effects diluting fixed costs, and stable R&D and sales personnel will significantly enhance profitability. Price deflation has slowed down, and there is a trend of gross margin recovery, indicating leading companies are close to a profitability inflection point. Therefore, in the complete machine track, focus on leading Lidar manufacturers such as Hesai Technology and Suoteng Juchuang, relying on stronger R&D strength, a broader downstream customer base, and continuous cost reduction brought by scaled delivery, leading companies will capture a larger market share.

Supply chain: The BOM cost of optical and electronic systems takes a high percentage, suggesting attention to Ningbo Yong Xin Optics and Sunny Optical. The cost share of lasers and optical components exceeds 60%, with the upstream components of Lidar primarily being optical components and electronic components, which can be broken down into four parts: transmission, detection, scanning, and processing systems; the core components mainly include lasers, scanners, optical components, photoelectric detectors, and receiving chips, with a key focus on optical devices.

Regarding Symbol.

It is recommended to focus on the leading complete machine producer Hesai Technology (HSAI.US), and suggest paying attention to Suoteng Juchuang (02498), Ningbo Yong Xin Optics (603297.SH), and Sunny Optical (02382).

Risk Warning

The competition in the auto industry has intensified, regulatory progress has not met expectations, advancements in autonomous driving technology have fallen short of expectations, and product prices have declined more than expected.