Apr 29, 2023 34 min read adas

LiDAR Suppliers Gunning for Automotive OEM RFQs

2023 is the year of RFQs for automotive LiDAR, but don't take my word for it.

AEye

On 3/18/21 Stephen Lambright, Chief Marketing Officer (CMO) of AEye:

“This won’t be a winner-takes-all market,” Stephen Lambright, CMO of AEye, told us. Lambright noted that many lidar companies are still experimenting with numerous ideas, “much like a biotech industry.”

Of course, equating the lidar segment to biotech is hardly comforting.

But the automotive industry’s appetite for lidars is real. Lambright observed that in the ADAS world alone, his company is seeing 15 to 16 different lidar requests for quotation, all aimed at ADAS vehicles scheduled for production in 2025-26. Despite the diverging lidar market, Lambright noted, “Automotive companies are starting to place bets in the next 18 months on what they are deploying four or five years from now.”

https://www.eetimes.com/lidar-sweepstakes-draws-15-rfqs-but-no-frontrunner/

That means 15-16 contracts were slated to be awarded around September 2022 which did not occur.

Innoviz

7/2/2022:

CARIAD SE Selects Innoviz as Direct LiDAR Supplier for the Segment of Automated Vehicles Within the Volkswagen Brands, Cariad confirms deal but not financial details.

On 11/10/22:

According to rumors in the industry, Innoviz now has production wins with Mobileye and Qualcomm – two of the industry’s three major autonomous driving technology platform partners. The third one is NVIDIA. According to Omer Keilaf, CEO of Innoviz, the company now has 11 OEMs in the RFI and RFQ process, which collectively produce approximately 40 million vehicles per year. It also expects an additional 1-3 new decisions by OEMs in the next six months.

Around April 2023 expects 1-3 contracts awarded with 8-10 RFQs still open.

On 3/1/23 EC:

during the fourth quarter the Company saw further growth in its customer RFI/RFQ pipeline, including the addition of a multi-million unit LiDAR RFI. The Company’s pipeline for potential LiDAR orders is now over 20 million LIDAR units, and the Company believes the 10-15 programs currently in the pipeline represent an estimated opportunity to quote non-recurring engineering (NRE) bookings in the range of $150 to $250 million.

https://www.yolegroup.com/industry-news/innoviz-israel-updates-about-bmw-and-cariad-program/

Tangent on NREs: $150m/10programs = $15m/program, $250m/15programs =$16.7m/program, depending on Innoviz's "Tier 1" role one may expect these NRE values to be higher than what other suppliers say Cepton or Microvision would require.

On 4/5/23 PR issued:

announced that it has received a several hundred unit purchase order from a commercial vehicle original equipment manufacturer (OEM) for its InnovizTwo LiDAR as part of advanced discussions for a new series production award. The order will be delivered to the customer throughout 2023, beginning in the second quarter

On 4/6/23 Omer from Innoviz mentions recent win, "It's not an existing customer" and OEM is using platform from "One of the other two :)" in response to a question about OEM potentially using Nvidia platform

Another RFQ in the box. Innoviz was short listed with another major OEM $INVZ
— Omer Keilaf (@KeilafOmer) April 6, 2023

Valeo

6/14/2022:

Valeo is already world number one in advanced driver assistance systems (ADAS), equipping one in three new cars globally with its technologies. It was the first, and to date remains the only, company to produce an automotive LiDAR scanner on an industrial scale. More than 170,000 units have been produced and the technology is protected by more than 500 patents. The Group intends to accelerate even further in this field, as announced in February 2022 with the launch of its Move Up plan, the value creation strategy at the heart of the four megatrends disrupting mobility (electrification, ADAS, reinvention of the interior experience and lighting).

^These values are based on SCALA 1 and SCALA 2 orders.

Stellantis has chosen Valeo's third-generation LiDAR to equip multiple models of its different automotive brands from 2024. The Valeo SCALA 3 LiDAR will enable these vehicles to be certified for level 3 automation, allowing drivers to safely take their hands off the steering wheel and their eyes off the road.

Valeo’s third generation LiDAR chosen by Stellantis for its level 3 automation capability

Stellantis has chosen Valeo’s third-generation LiDAR to equip multiple models of its different automotive brands from 2024. The Valeo SCALA 3 LiDAR will enable these vehicles to be certified for level 3 automation, allowing drivers to safely take their hands off the steering wheel and their eyes off…

Valeocviale

10/7/2022:

Marc Vrecko: Thanks to Valeo’s 360-degree lidar cocoon, composed of 5 SCALA sensors and a central computing unit, Honda was able to achieve in Japan the first ever lv3 passenger vehicle in the world, for this achievement Valeo received a supplier award from Honda early in 2022, which is rather rare for non-Japanese suppliers.

Mercedes has received type approval for its Drive Pilot system in Europe and Valeo has contributed significantly with our 2nd generation SCALA as well as system/software to achieve this certification. Other markets will follow. We will soon launch with an Asia-based global manufacturer, and you’ve surely followed our announcement on the global business win for our 3rd generation lidar with Stellantis.

About competition, there are many new lidar companies which have achieved important valuation levels but so far, apart from some Chinese players, none of them has ever delivered a lidar for a passenger vehicle.

We are used not to name our competitors… but if we would, we would answer Luminar, Innoviz & Cepton. Also, Hesai & Robosense if we include Chinese

Marc Vrecko: First I’d like to clarify the difference between mechanical lidar in which sender & receiver elements are in the rotor, and rotating mirror lidar in which only the mirror rotates leading to a very robust design, proven by Valeo with nearly 200.000 lidars on the road. The advantage of a spinning lidar is that it can provide a long detection range combined with a large field of view and a high resolution.

4/8/2023:

Valeo, the global leader in ADAS, has announced that its SCALA 3 LiDAR (light detection and ranging) has been chosen by a leading Asian manufacturer and an American robotaxi company. Valeo states that it has now registered orders worth more than a billion euros (Rs 8.788 crore) for SCALA 3.

Cepton

On 11/08/22 Q3 EC:

Mitch Hourtienne:

Thank you, Jun. Starting with our automotive programs, Cepton’s position to win additional automotive ADAS business has improved significantly since our last update. We completed the RFI process at two top 10 global OEMs and are in prime position to continue toward RFQ and eventual business awards. At both target OEMs, Koito maintains a leadership position on lighting products, and the recognition of Koito’s value as the Tier 1 is gaining traction among top automotive companies in North America and Japan.

Furthermore, we added one more major automotive program to our advanced engagement stage. This immediate program opportunity is another testament to the commercial validation of our lidar technology and solidified their competitive position as The Lidar winner in the industry.

Yes. Got it. And that was actually leads me to the next question you mentioned, you had two OEMs that you moved from the RFI process to the RFQ. And I'm just wondering, you know, what exactly does that mean? What does it look like? You know, what added activities are there with these two OEMs?

Hull Xu

Yes. I mean, these are two OEMs we've worked with for multiple years. So it's really about solidifying the specification for the exact target vehicles that they have planned. Whereas a few years ago it may have been more proof-of-concept data collection activities, now it's more about vehicle integration where does the part go on the car, exact cost, commercials, nailing down the timing. That's all done in the RFI phase. RFQ, you just -- that's a rubber stamp on all of those elements and a committed launch schedule in commercial.

Gus Richard

Got it. Got it. That's very helpful. And then the last one I was like to ask a question, nobody -- somebody won't answer. Can you give us a sense of your overall contract value where you think that stands at this point?

Jun Pei

Yes. We will answer that, befor that for the GM Ultra Cruise, program we based on our own estimates, which is fairly conservative at this point. It’s well over $1 billion with the current contract.

Gus Richard

With existing projects?

Jun Pei

With existing awarded that -- awarded vehicles.

Gus Richard

Got it. Got it. And, you know, these two OEMs, you're working with any sense of how big those contracts could be?

Hull Xu

They will be the same -- at least one of them will be the same or larger.

Gus Richard

Perfect. Got it. Alright, very good. Thank you so much.

Jun Pei

Yes. Thanks.

Mitch Hourtienne

Sure. I can start that one, Matt. This is Mitch, so I never want to say it's becoming less competitive. It's always competitive in automotive. But the number of competitors is you can count on one hand now versus even two years ago, it was still a couple dozen companies. So when you talk about top 10 automotive companies, it's down to definitely one hand, maybe just a couple of companies.

Richard Shannon

Hi, guys. Thanks for taking my questions as well. I think I'm going to follow-up on the topic of the two completed RFI processes that move on to RFQ? Do you know what they are? And can you talk about what the -- what if any competitors are still remaining in those processes?

Mitch Hourtienne

Yes. Hey Richard, this is Mitch. Just to clarify, what's your first question? You said, what do we know what they are competitors are?

Richard Shannon

Yes, do you know how many competitors?

Mitch Hourtienne

Yes, we know exactly the competitors at each of the three. So one of the three, there is no competitors. And the other two, there's two or three competitors.

Cepton focused on three more RFQs, with at least one RFQ being worth >$1bn.

Q4 2022 EC transcript (3/14/23):

Mitch Hourtienne: Thank you, Jun. Starting with our automotive programs, as Jun indicated, preproduction shipments started at the end of the previous year and have expanded to multiple vehicles in multiple vehicle manufacturing sites. We are in advanced discussions to expand our existing business award to additional vehicle models. GM kicked-off the announcement of the Celestiq late last year and followed up with a comprehensive announcement of the sensor suite in the Ultra Cruise system a week ago. We expect more announcements across additional models in the year ahead. Over the past year in the automotive industry, we have seen accelerated investments and focus on L2 plus ADAS offerings, as a result of Level 4 programs being pushed out.

Of course, I'm always speaking about our target customers, leading global top 10 automotive OEMs. We expect additional OEMs to take a similar approach to GM on L2 plus or L3 system deployments with announcements in the near future. We remain in a very good position for additional production awards with our target OEMs. We are in advanced discussions with several global top 10 OEMs at this stage. As we have seen across the lidar industry over the past year, the competitive landscape is a smaller list of lidar companies that have existing automotive production awards. We have gained trust across the industry, having gone through an extensive development process and launch efforts with General Motors. This entire process spans over three years in both, hardware and software development, establishing Cepton as one of a few auto grade lidar suppliers for automotive OEMs. In 2023, we will direct efforts in winning series production awards toward our newly launched Vista X-120 Plus product.

Finally, we have a new autonomous ground vehicle project with a top 10 automotive OEM to announce. Cepton is supporting the safe deployment of Level 4 autonomous ground vehicles with our Nova near range lidar. Details of this customer and application will be forthcoming soon. So, stay tuned. I'll turn it back to Hull now.

Luminar

8/8/22 Q2 2022 EC:

David Kelley

Good afternoon, guys and thanks for taking my questions. Maybe starting with the commercial pipeline, you helped your outlook to essentially buy major commercial wins for the year. I believe you have the two, Nissan or Mercedes year-to-date. So maybe if you can update us on where we are in that process and maybe what's driving the increased conviction into the step-up into the back half of the year here?

Austin Russell

Yes, David. So we have two that we've already publicly announced for this year, which were Mercedes and Nissan. And when we kind of look at the existing pipeline that we have, we're very confident that we're going to get at least another three that we can announce by the end of the year. And so, the conversations we're having with our customers, both the new and existing are going very well from our perspective.

Tom Fennimore

Yes. And one important point as well on this, too, and I think this is a key distinction. And so what effectively every OEM will do is that, when they talk about -- I mean, people can talk about whatever they want ultimately, we knew when something is announced.

But the reality is just that, OEMs will start with a single program, usually with you as an option on this. And then, as you prove yourself out, as you do anything there. That was where we saw really, for the first time, us being standardized on, for example, the Volvo flagship vehicle.

What I think is particularly interesting, though, is that there's still so much opportunity even just for the new customers. There's actually -- even with the existing customers, like even with no new customers at all, we can achieve already our multibillion dollar revenue and EBITDA targets by the end of the decade, with just the existing customers by just equipping more programs on the vehicle side.

So that's part of the interesting part. And that's where there's just so much of a focus of how can you get additional, like, go from one program that's kind of a key launch program to multiple programs. And those wins can actually be just as valuable, if not even more valuable than a new OEM, because effectively, a lot of times as they start on a lower volume or something, and then that it goes in the higher volume. It depends on the OEM with something.

But it's sort of the -- you start with the gateway, obviously, working with the OEM in the first place, is very, very challenging, but as you prove yourself, that's an important one. And that's one that we're going to continue to be focused on as well.

Tom Fennimore

Sure. So I'll take the ECARX one first, Emmanuel. So for those that don't know what ECARX -- who ECARX is. ECARX is part of the broader Geely family. And we at Luminar view them as really the technology supplier and the technology gateway to the broader Geely family of brands, particularly those that have more of a China-centric focus. As you know, we're already working with certain brands that are a member of the broader Geely family, i.e., Volvo as well as Polestar, which are more of the more international-focused brands.

When we look at our China business, not only did we have SAIC and [indiscernible], but we view the opportunity to work given our pre-existing relationships with some of the brands within Geely with the broader Geely family in China. And in order to, I would say, do that in the most optimal way, partnering with ECARX to take our technology, integrate it with ECARXs technology and deploy it to the broader family of broader Geely family of vehicles. So that's the purpose of our strategic partnership with ECARX in order to kind of take that strategic partnership and add an economic element to it. We invested $15 million or we will invest $15 million and then as part of our going public process. We're planning to do that with our stock. So think of it more as kind of like a cross shareholder or a cross shareholder ownership between the two companies to do so. But we're doing it because we think there's going to be a very productive strategic partnership from the two of us working together. Do you want to take the Mercedes Benz, Tom?

Tom Fennimore

Yeah. I think I certainly say that. As I mentioned a little bit about Mercedes before too, but as we announced a partnership actually just earlier this year. I don't think that there's anything fundamental that you can share other than it's continuing to progress, and we have a great relationship with those guys. I mean, I think the key is that this is for their next-generation vehicle platform and launch. You guys may maybe familiar with Mercedes to-date, they have their current platform that they're looking to achieve Level 3 autonomy at just a little bit incrementally better safety with Valeo platform there with the LiDAR on the vehicle. And this is where we really come into provide the next generation beyond that, so that you can be able to enable proactive safety and highway economy-type capabilities that's there, going beyond just kind of more basic traffic jam pilot type capabilities on the vehicle.

So that's ultimately what we're enabling, and we're moving full speed ahead, working with folks like Mercedes. They have the highest standards and a very intense and very strict capacity as part of the site probably anyone in the industry know the pinnacle of that. So the collaboration is great, and it's really helping on all sides to really drive, take them to the next level and also take Luminar for the next level for that matter as well.

Emmanuel Rosner

Thanks. That's great color. And actually, a great segue also for my next question, which is a little bit about capability and the competitive environment. So I think in the quarter, we've also seen a fairly major other European OEM allocate some pretty large LiDAR business to another LiDAR player. And I wanted to know if you could provide a little bit of color around, I guess, why not Luminar, not that I would assume that it would be a monopoly. But is it -- whether you're looking for different capabilities, was it on price? Like any color you can give us in terms of what it’s, sort of, like, where are they going, and why not you could have been a good fit?

Austin Russell

Yeah. So I think that this is actually -- funnily enough, this is actually not too dissimilar from what orders are subscribing there, too, like in the Mercedes case, if you have the initial vehicle program that's focused on traffic jam pilot type scenarios for vehicle model, and then taking cape from there on out.

So I'll say this is that you actually don't need Luminar level capabilities to be on a vehicle or on a model or on anything to be able to achieve a lower speed traffic jam pilot type capability that's on the vehicle. Really where we come into play is when you talk about next-generation proactive safety, highway autonomy and improving those capabilities on the vehicle, kind of, like what Mercedes, Volvo, SAIC, Polestar, Daimler Truck, like those guys are doing.

But I think what's interesting here is that even cases like that, we're all ported. Actually, I think it's a data point that people are willing to have LiDAR on the vehicle, like in that case, a 905 example. They're on a model, even for just the Traffic Jam Pilot type use case -- on that trips -- of that kind of capability. So that makes it, yes, that makes it interesting. Obviously, we continue to be able to look forward to focusing on what we do best.

And I think what you'll see is that effectively all or nearly all of the kinds of scenario setups that we have are roof-line integrated for enabling those capabilities. In fact, when you see kind of bumper type of integrations for these different vehicle programs there too, that's more suited towards the Traffic Jam Pilot type use cases as well that will work for lower speed applications for this.

So that maybe adds a little bit of color from that side of it from what we see from a market perspective there too. It's kind of that next level deeper. So the more Traffic Jam Pilot step out there, that's great for value assigned to LiDAR more generally.

Current partnerships with Volvo and Nissan, potentially three more design wins by EOY, likely with Polestar, MB / Daimler Trucking, SAIC?

11/2/2022 Q3 EC:

Austin Russell

So this is certainly a monumental quarter for Luminar with a bunch of different things converging at the same time. And to name really the five things that are happening here is, number one, achieving start of production with Iris, a huge convergence over the past 10 years leading up to that.

But at the same time, number two, the debut of SAIC’s RISING AUTO R7 in China, which is really the first vehicle of its kind from the large automaker in China.

Number three, Volvo’s vision for standard safety with Luminar is materializing with the unveiling of EX90, now one week from today on November 9th.

Number four, Polestar next generation vehicle, the Polestar 3 was introduced a couple of weeks ago and is successfully launching with Luminar available to order on vehicles beginning in Q2 next year.

We also have a slide deck available with a few different graphics that we can share and is available as well for you guys online on our IR website. You can see that, okay. So SAIC, as you heard in the video, SAIC is the number one Chinese automaker in the world’s largest auto market and is now launching with Luminar in the series production vehicles in China starting with the R7.

Mark Delaney

Yeah. Good afternoon and thank you very much for taking the questions and congratulations on getting into the startup series production. My first question was on the expansion potential within customers and I think it’s one of the big opportunities you guys have highlighted in some of the past calls and discussing again today. Maybe you could elaborate a bit more on that and talk about what do you think some of these OEMs would want to see before deciding to put your products on more of their vehicles, right? I mean you are on a model with SAIC and Volvo. I mean, do you think they want to see vehicles on road and kind of see how that goes for some period of time, or perhaps, could they come and place orders to put your products on more vehicles more quickly than that?

Tom Fennimore

Yeah. So I think, Mark, it varies by customer. Getting your foot in the door with these -- with the initial win with each of the customers tends to be the most difficult task. As we talked about in the past and you, like, if look at Volvo, we started off as an option on their most premium vehicle, the EX90, then you kind of move to standardization, then you kind of move on to the other vehicle platforms. So, step one, you got to get in the door.

Step two, you got to execute, right? You got to do what you promise and deliver to the customer what you promised. And once you start building up that credibility with that customer, building up the confidence, they have the faith to give you more business and then it needs to align with their specific platform development schedule.

When you introduce this new technology, you either do it at the start of a new platform or at a mid-cycle refresh. So you have to align the timing of all that. But those are the three things that usually need to go in there to win new vehicle programs at these customers. It’s something we are really gaining a lot of momentum on where we showed some early signs of success and I think you are going to see more signs of that at some point in the future here from Luminar.

Samik Chatterjee

Okay. And for the second one if I can just sort of ask you about the competitive landscape here. We have seen, I think, just you highlighted your cash position, but we have also seen certain LiDAR companies sort of go bankrupt in the -- from what we can see from press reports. Are you starting to see some narrowing of the field already in terms of sort of considerations from automakers, some automakers starting to sort of change track in terms of which companies they are evaluating, any sort of changes that you are seeing yet or sort of more of that to come and thanks for taking the questions.

Tom Fennimore

Yeah. So, Samik, I think, we are in the early stages of rationalization, not only of the LiDAR industry, but I think the broader autonomy landscape. I think as you mentioned, there has been some bankruptcies and restructuring of some LiDAR companies recently. We are -- there’s also been some kind of bailout financings.

And look, we also monitor the cash levels and the kind of the cash burn rates and we know that our OEM customers are doing that as well, because it takes anywhere between two years or three years between when you win a piece of business and the development work you need to do just to get to series production.

And when you win that piece of business and you need to do the investments in engineering, in the manufacturing and buying all the equipment. But we know it firsthand, we are doing it in multiple ways now, it’s expensive and that cash burn rate tends to go up.

And these OEMs want to make sure that if they are making a long-term commitment that that company is going to be around to deliver on that. Luckily for Luminar and the strength of that balance sheet, we easily address those questions.

Jared Maymon

Yeah. Thanks for taking the question, guys, and obviously, congrats on getting the production milestone. Austin, one question, but kind of two parts. So, first of all, can you -- I know right, but first of all, can you help us better understand how your forward-facing order book is calculated alongside the customer? And then do you see any risk from take rates from macro factors that could impact light vehicle production or consumer demand trends like rising financing rates?

Tom Fennimore

Sure. So let me try to address your two-part question there Jared with one answer. I will give you a refresher in terms of how we calculate our forward-looking order book and we tried to be conservative in terms of how we calculate it.

So for example, for Volvo, we only have the EX90 in it. Volvo has said publicly their plan is to eventually put our LiDAR on every vehicle that they produce. We don’t have all the vehicles of Volvo in our order book. We don’t assume some probability in our order book that we are going to get the non-EX90 business. We only have the EX90 in there.

Same thing with SAIC, right? They are -- the only thing that’s in there is a very conservative take rate assumption for the R7. We are not assuming standardization of the R7, we are assuming zero of any other business at SAIC.

Nissan has said publicly that this system that we are jointly developing with them is something they are going to deploy on virtually every vehicle that they make at the end of this decade. Nissan makes 4 million vehicles. At the end of last year, we had zero in there for Nissan. So we take a very conservative approach in what we put in there.

David Kelley

Hey. Good afternoon, guys. Just a quick one for me and a follow-up the -- on the RISING AUTO R7s specifically, any color you can give us on how the Luminar LiDAR option is going to be priced in to that vehicle?

Austin Russell

You can go to their website now and take a look.

Tom Fennimore

It’s an option, David. It’s the U.S. dollar equivalent from memory is somewhere in the mid-to-high $2,000 range. You can actually go -- if you are Chinese proficient, actually go to the website.

1/5/2023 Q3 2022 EC

Unidentified Analyst

Okay. The second part of that in sort of the announcements that you had is obviously the strong 4Q that you had in terms of helping you meet your -- with your order book targets, your commercial wins. And I know one of your competitors has said that most of the wins on the LiDAR with major automakers are going to be decided within sort of by the end of 2023.

So, how do you sort of compare that to where the investor sort of sentiment is today where 2023 is perceived to be a tough year? A lot -- there are sort of this underlying expectation that automakers will push out decisions given the tough macro. So, maybe compare -- help us think through that.

Tom Fennimore

Yeah. And we're going to talk more about these wins in the near-term here. We -- because we set out these four major milestones for 2022 and 2022 now over, we wanted to be in a position that we met them. What I would say is these wins that we have, these were non-RFQ processes. These were when we were in there working directly with the OEM. They didn't do a marketed process to other LiDAR companies. So, it doesn't surprise me that other companies were unaware of this. And we can -- I think once we unveil who they are, we can go in a lot more detail on why that is the case.

Austin Russell

But I think the key thing is, is that after you hit SOP is the momentum keeps building. I mean, if you take a look at it, it took us, what, seven years, eight years to get our first series production win. And then now we have, what, a dozen major commercial wins that all happen in the following 18 to 24 months. So, it kind of -- again, it kind of snowballs in terms of that effect. It's just a ton of upfront work and investment. So, anyone that's trying to do this today, I mean, basically, you're talking about closer to a 2030 timeline by the time you could have some kind of industrialized product that's scalable, that implements all of that.

Microvision

10/27/2022 / Q3 2022 EC:

Sumit Sharma

As we approach the end of calendar 2022, MicroVision is better positioned than ever and offers a complete hardware and software solution that exceeds the expectations and requirements of OEMs for their planned RFQs in 2023 and beyond

This is a very big step towards potentially being selected by automakers as a partner to power their next-generation safety programs. These samples will allow OEMs to continue to evaluate our solution in their own test environments, as they look towards RFQs expected in the first half of 2023. I will elaborate on this later in the call.

Finally, one of our big accomplishments to-date has been traveling nearly 7,000 kilometers to promote our technology to OEMs across Europe. These relationships have allowed us to gather meaningful feedback and to align our program milestones with their upcoming RFQs in 2023. We are on track with our samples and development to participate in these RFQs

This positions us well for the next phase of OEM RFQs requiring LiDAR. To put it simply, our current hardware meets or exceeds all requirements and puts us in a leadership position to compete in the 2023 RFQs.

I would now like to move our focus to talking about the key features OEMs are looking for in 2023 and beyond in LiDAR technology, and how MicroVision is positioned as best-in-class. First, we understand that OEMs are looking for a low profile sensor with low power requirements for roofline mounting without ugly sheet metal bump-outs.

Finally, object level perception software running on a custom ASIC will be another important criteria for OEMs in their 2023 RFQs. This capability gives them an efficient and scalable approach to building new and differentiated safety features in a timely way. Only MicroVision solution is built from the ground up with this approach in mind.

Our fully pipelined LiDAR means that control of the entire system is happening in the custom ASIC in real-time. This unlocks massive opportunities for lower cost solutions that’s reliable, secure and delivers high performance allowing all the systems to operate in parallel. I am more confident than ever -- I have ever been that MicroVision is positioned for success in 2023 and beyond.

As I look ahead to 2023, we have several focus areas for customer acquisition and continuing to advance our technology and manufacturing capabilities. From the customer acquisition standpoint, we are focused on several OEM RFQs targeted for first half 2023. This is based on their timeline.

Before handing the call over to Anubhav, I’d like to sum up these key thoughts. We continue to offer the best-in-class sensor ready for OEM RFQs expected in 2023. We have visibility into multiple customer programs where low-profile and low-power sensors are required to allow mounting along the roofline.

Sumit Sharma

I think -- I will take that one, Anubhav. I think for remainder of the year, I think, we are just building out samples for our A-sample sales that we have talked about, but as Anubhav mentioned, they are limited.

They are targeted primarily towards folks that are going to be evaluating for RFQ, which OEMs have their own timeline and the RFQs are in first half 2023 timeframe. It’s not solid, right, but they have a process they are going to start with.

So our priority of course is getting those samples ready and having them -- getting them access to them. It makes it much easier now because we can make handful of samples here in Redmond and the balance of course as we scale, we are going to talk about that a little bit in a few seconds here.

As far as next year, our primary focus is of course these RFQs and achieving them, but as you can imagine, right, there’s not a milestone that we can discuss milestone will be. If there’s an award, we are going to announce to the market.

So we will update on the earnings call how things are going as we go along, right, if we are allowed to and if we can actually give any clarity on the process. But as you can imagine, right, it’s a long-drawn-out process. You have to become very comfortable with the company, the technology roadmap, manufacturability and we just have to go through the process. And I am pretty confident that we are going to get through it.

Andres Sheppard

Yeah. No. Absolutely. That’s very thorough and insightful. Thanks, Sumit. Appreciate it. Maybe a quick follow-up there is, you are reaffirming guidance -- cumulative guidance, which includes securing more than two partnerships with OEMs by 2030. So I guess my question is, when do you think -- what’s the earliest that we could see an OEM partnership announcement?

Sumit Sharma

I think that’s -- really based on that process it will be hard for me to comment, but I can give you a general idea. If I had a specific time I would be more specific. But I think we expect some time process to start, and based on their timeline and their comfort level is that they will make a design win nomination sometime in the summer. So I think that’s the best I can give you right now without divulging too much.

Anubhav Verma

Thanks, Chad. All right, so I think the first question we have is, what does the company have to say about the Cariad Group recent announcement for selecting a partner for some of their brands and similarly Stellantis’ selection, is MicroVision too late?

Sumit Sharma

All right. I will take that.

Anubhav Verma

Sumit, do you want to take that. Yeah.

Sumit Sharma

Yeah. I will take that. So that’s a great question. I think I get this is quite often, most recently in Seattle airport. So I think we have kind of answered this before, but let me just highlight this and get a little bit deeper today.

So if you go just do public data search where you will understand it, what they have actually selected is a single software platform and there’s no guarantee or applicable across all platforms. As you can imagine, a OEM of that size for every vehicle or different classes of vehicle, they are different software platform and they have not unified all their software platforms under one.

As you can imagine, they have endeavored to do that but in several years, I mean, a CEO recently got fired from that company. So kind of just puts in context that -- those brands, all the different brands under the big umbrella, they all have their own software platforms. So it’s not so straightforward.

Now, I think, I will allow other people to say what they want to say on their earnings call and describe the market. I think at least our shareholders know a little bit about me. I tend to be pretty straight about these things. I am not going to be cute about it. These are the facts and they cannot be disputed, plain and simple is public data, all right?

And if you think about it, the other -- you mentioned Stellantis as well, right, and of course, Cariad. You think about these other sensors that are publicly announced, they have like high profile and when I say high profile is the front face is kind of tall. There’s only one location it can be mounted, somewhat lower to the ground so it can be blended into the body of the vehicle.

And that presents a lot of challenges for the next generation what they are looking for. I can clearly tell you personally, I have been in the room, what they are looking for is high-speed highway pilot, roofline mounting, range, extremely high resolution at a very, very low latency, plain and simple. And this means, if you think about roofline mounting, without any big ugly bump-outs that make a nice-looking car into like a taxi-looking that requires a low profile.

So if you think about it, right, anything that’s been done so far, even OEMs they mature their product, they mature their need. Every year they have a new need. So when you think about RFQ cycles that happen every year or every so often. There’s new requirements that come in. So we took a little bit longer to develop our product, but the benefit we have is we have baked in a lot of the features ahead of everything.

2/28/2023 (Q4 2022 EC):

Sumit Sharma

Thank you, Drew. Welcome everyone to this review of our 2022 fourth quarter and full year results.

2022 was an exciting and eventful year for MicroVision, and I expect 2023 to be an even more pivotal year in our journey. I would like to update you on three areas. First, our product portfolio. Second, our momentum for partnerships and revenue. And third, our competitive outlook.

First, let's dive into our product portfolio for 2023. 2022 was the most important year in MicroVision's history. With relentless execution, our team matured our MAVIN product to align to automotive OEM expectations for high volume RFQs happening in 2023. We also executed on our strategy to become a full spectrum ADAS solutions company by joining forces with Ibeo automotive and acquiring assets. The combination of MAVIN and our balance sheet puts the combined company in the best position to help realize the true potential of the Ibeo team.

Let me start with MAVIN update. For long range LiDAR, MAVIN meet and exceed OEM expectations for seamless roofline integration for high-speed highway pilot. Nobody is offering a mature product with the size, performance or cost. We challenge MAVIN best-in-class status period. Let's just put any speculation to rest. Roofline integration is the dominant requirement across RFQ for long range LiDAR for 2023. While our competition is starting these design cycles to deliver on size, cost and performance, we are ready with the product now that goes to production over the next several years.

Programs announced by competitors years ago are still not shipping either from their own factories or their tier one partners in any meaningful volumes. As I look at the RFQ in-flight across Europe, North America and Asia, we are engaged in multiple RFI, RFQ opportunities, with outlook for more than 20 million long and short range LiDARs by the end of this decade. These opportunities while massive represent less than 10% of the entire fleet expected to ship globally by the end of decade with a LiDAR.

OEMs are publicly embracing LiDAR as the future of ADAS. Automotive OEMs in Europe, North America and Asia are looking for a long-range LiDAR that is ready for roofline integration, as well as a cost competitive solution for short range LiDAR.

MicroVision is the only company that will offer both. The current cycle is significantly higher in volume than the early small volume partnerships announced to-date by all OEMs combined. None of the current partnerships are exclusive, as evident in the multiple solutions being announced yearly by OEMs. This current high-volume opportunity is just the level of big price we have developed our sensor for. With billions of dollars of revenue potential, the review of technology and partnerships takes a long time. But I'm confident that things will start converging in 2023 for a 2026 production readiness for long range LiDAR and 2025 for short range LiDAR.

I expect 2023 to be an exciting year of partnerships for this product. In the current RFQ cycle, recurring revenues for this product is likely to start arriving in 2026, 2027 based on several OEM programs. I can't emphasize enough how well we are positioned with MAVIN with current RFQ.

Third source of revenue, automotive short-range LiDAR. With the current ASIC development for flash sensor, we expect to offer a 180-degree field of view short-range LiDAR sensor in a compact format or RFQ from multiple automotive OEMs in 2023. Long-term this product would have higher volume than MAVIN at a lower ASP. I expect this product to run an existing manufacturing line with some customization. Several OEMs on multiple continents have RFQ opportunities in 2023 for this product. I'm very excited about this LiDAR product and the revenue opportunities made possible with our asset to acquisition.

Andres Sheppard

Got it. Thanks, Anubhav. And maybe just one last question maybe for Sumit. Can you give us an update on potential partnerships with OEMs? Any updates there and when do you expect you might have a partnership materialized? Thank you.

Sumit Sharma

I think as I iterated through the entire call, right, 2023 is a year of convergence. I think they're all settled in, most of them have settled in and all the products that are going to need, the RFQ cycles are ongoing. Where do we end up converge, I think it'd be pretty hard to say like, we're going to sign by this date that would be impossible like that, I'll give an example. There was something specific like nothing big right with an OEM for the auto-annotation software, they were expected to close for this call. And for reasons because of some of the bureaucracy within the company, that delayed, that's something that I feel confident sharing that it's going to happen, but you can't nail down the time. They control the momentum, let's be honest. But I feel very, very confident that for them to get, if you look at the schedules, the multiple schedules I've looked at, they have a launch schedule, and you work backwards from them. The launch schedules are set all the way out, they need industrialization by this day, so on and so forth. Those decisions have to get made in 2023. And these are big decisions with big volume. So, the look is extensive, but I feel very, very confident that 2023 is going to be a conversion path.

In summary:

According to AEye and Innoviz there's 8-16 RFQs for 2025-2027 model year vehicles.

Innoviz has previously awarded contract with BMW for their Innoviz One sensor for 7 series models ($95k base MSRP), mounted behind grille, and won another deal with Cariad/VW that could be worth up to $4bn for their Innoviz Two sensor and perception software, mind you this is "forward-looking order book" and VW declined to comment on financial aspect of deal.

Valeo is the first supplier to produce sensors at scale (hundreds of thousands of units, more specifically over 200k) from SCALA 1 and SCALA 2, Hesai (reached 100k units in 2022) and Robosense ("higher than Hesai" when speaking with them at CES 2023) are giving them a run for their money. Current orders for SCALA 3 have reached $1bn euros for Asian OEM and American robotaxi company. SCALA 3 sensor dimensions are similar to Innoviz, thick, which makes roof-line integration difficult without a "bump."

Cepton has deal with GM for their flagship Cadillac Celestiq (behind windshield), priced ~$300k, believe GM's Ultra Cruise offering on future premium vehicles will likely include their lidar as well (behind windshield)(source). In 2023 heavy focus on three RFQs, one of which is worth >$1bn, believe they have two or three real competitors.

Luminar has won contracts and entering SOP for Volvo EX90 (standard with LiDAR, $80k base MSRP), Polestar 3 ($85k base MSRP, +$5000 for pilot pack with LiDAR), SAIC / Rising Auto R7 ($43000 base MSRP, LAZR claims ~$2000 for LiDAR package), all with roof-line integration + bump.

Luminar also appears to have won or likely to win a series production contract with Mercedes-Benz for the next version of their DRIVE PILOT system, current version uses Valeo Scala 2 sensors. Details around Luminar's partnership with Nissan and their Pro Pilot system slatted for virtually all vehicles by 2030 are still unclear. Management has mentioned they believe opportunities with existing customers and partnerships are sufficient for meeting current revenue guidance without any new "RFQs" as Tom Fennimore puts it:

Even with the existing customers, like even with no new customers at all, we can achieve already our multibillion dollar revenue and EBITDA targets by the end of the decade, with just the existing customers by just equipping more programs on the vehicle side.

What I would say is these wins that we have, these were non-RFQ processes. These were when we were in there working directly with the OEM. They didn't do a marketed process to other LiDAR companies. So, it doesn't surprise me that other companies were unaware of this.

Is this the red herring for no 2023 RFQ wins for high volume, or simply extreme confidence? Time will tell.

Microvision has not yet announced any design wins or partnerships for their MAVIN long range LiDAR sensor, however they "inherited" production contracts and software sales based on acquisition of Ibeo. They expect to win at least one RFQ by end of 2023 for high volume supply (millions of units), to date no awarded contract has been of this size or at least specifically stated in SEC filings.

Overall there appears to be a trend with LiDAR sensor integration in roof-line or behind the windshield over grille or bumper, this is likely due to improved visibility for sensing at longer distances which is needed for highway speed ADAS features.

How important the aesthetics of the vehicle (bump) is to consumers is still unknown, some say it's a deal breaker, so far that hasn't been the case but up until now OEMs have had little choice.

Not covered: Ouster, AEye + Continental, Bosch, Hesai, Robosense, MobilEye, not for any particular reason other than this post is already too long.

List of next posts considering to write in no particular order:

SWAP-C claims (it'll be light, I'm not an optical engineer)
Recap of Luminar's Investor Day as well as Microvision's
Financials of Innoviz, Luminar, Cepton, Microvision
Perception software, who is offering what, when, and how does it fit in with the rest of the ADAS platform

AEye

That means 15-16 contracts were slated to be awarded around September 2022 which did not occur.

Innoviz

Around April 2023 expects 1-3 contracts awarded with 8-10 RFQs still open.

Valeo

Cepton

Cepton focused on three more RFQs, with at least one RFQ being worth >$1bn.

Luminar

Current partnerships with Volvo and Nissan, potentially three more design wins by EOY, likely with Polestar, MB / Daimler Trucking, SAIC?

Microvision

In summary:

Speeeeedislife