Is there still a share of the lidar market for Innovusion?

On August 26th this year, an update on the official website of the Hong Kong Stock Exchange once again put Tudatong in the spotlight of the lidar industry. This company, which won the title of "the world's top passenger car lidar shipper" in 2023, is making its third attempt to enter the capital market.

Different from the successful listings of Hesai Technology and RoboSense, Tudatong's path to going public has been full of thorns.

In 2023, Tudatong's plan to list on the NASDAQ failed. Subsequently, its listing application on the Hong Kong Stock Exchange expired in February this year. Now, it has chosen the SPAC model (Special Purpose Acquisition Company) as a workaround, trying to compete again in the increasingly fierce lidar market with a valuation of HK$11.7 billion.

The Inappropriate 1550nm Technology

Judging from Tudatong's prospectus, the company's fundamentals present a mixed picture.

Previously, there was a significant improvement. Data shows that in the fourth quarter of last year, Tudatong's gross profit margin turned positive for the first time, reaching 5%, and then further increased to 12.6% in the first quarter of this year, achieving a gross profit of $3.197 million.

Although the turnaround of the company's gross profit margin from negative to positive is a meaningful milestone, from an industry perspective, it is no longer a new thing for lidar companies to achieve positive gross profit margins. Hesai Technology's gross profit margin reached 28% in 2024, and RoboSense's was close to 20%. Tudatong's 12.6% is just catching up with the industry benchmark.

(Source: Tudatong's prospectus)

The underlying reason is directly related to the cost pressure of Tudatong's technology route.

Tudatong's main product is the 1550nm lidar, whose core material is indium gallium arsenide. The cost of this technology is 2 - 3 times that of the 905nm route adopted by companies like Hesai and RoboSense. Although the 1550nm technology has advantages in detection range and anti - interference ability, in a market with intensifying price wars, high cost has become a constraint. The price of lidar has dropped from 20,000 - 30,000 yuan in 2022 to around 1,000 yuan in 2025. Tudatong's 1550nm products find it difficult to compete with rivals in terms of cost - effectiveness.

With high - cost and money - burning investments and not enough orders to generate cash flow, Tudatong is still in a loss state on the balance sheet. From 2022 to 2024, plus the first quarter of 2025, the company's cumulative losses exceeded $800 million, and the loss scale has been expanding from 2022 to 2024, reaching $188 million, $219 million, and $398 million respectively.

Meanwhile, Hesai achieved profitability last year, with a net profit of 44.1 million yuan in the second quarter of this year.

Tudatong has been criticized by the market for its over - reliance on a single large customer. As a "direct supplier" to NIO, from 2022 to 2024, the revenue from NIO accounted for 88.7%, 90.6%, and 91.6% of its total revenue in the same period respectively.

Such a high degree of dependence on a single large customer inevitably weakens Tudatong's bargaining power. During the reporting period, the unit price of the Falcon series products specially developed for NIO continued to decline, from $879 per unit in 2022 to $704 per unit in 2024.

(Source: Tudatong's prospectus)

In order to reduce this dependence, Tudatong has been actively expanding new customers in recent years. It has cooperated with Hongjing Zhijia, Zhitu Technology, and Pony AI to integrate lidar into commercial vehicles and logistics scenarios. However, the revenue share of these new customers has not been disclosed in the financial reports so far.

In May this year, Tudatong also announced a cooperation with a leading Chinese automotive group, obtaining the "exclusive supply right" for multiple models under its brands. The industry speculates that this customer could be SAIC or FAW. However, it should be noted that there is a time lag of one to one and a half years for orders in the automotive industry. That is, the orders signed now will not be mass - produced and delivered until the second half of next year at the earliest.

Meanwhile, Tudatong's cash flow is not abundant. As of the end of March 2025, the company's cash and cash equivalents were only $24.27 million, while its current liabilities reached $97.75 million, leaving a net current asset value of only $6.48 million.

(Source: Tudatong's prospectus)

However, the current market valuation of Tudatong is relatively reasonable. According to the merger and acquisition transaction disclosed by the Hong Kong Stock Exchange, the agreed valuation of Tudatong in the SPAC merger is approximately 10.9 billion yuan. The current market value of Hesai in the US stock market is about 25 billion yuan. In terms of R & D expenses, Tudatong's R & D expenses last year were about 460 million yuan, while Hesai's were 850 million yuan.

In terms of the ratio of valuation to R & D expenses, Tudatong's ratio is 23.7, while Hesai's is 29.4.

The Self - Rescue of the Fourth - Ranked Player in the Industry

After two failures, it is no surprise that Tudatong is eager to go public through the SPAC model.

Nowadays, lidar has changed from a rare auto part in the early days to a standard safety component. The industry has shifted from a technology competition to a competition of scale and cost. The leading players have established their dominant positions, and the industry has entered the middle - to - late stage of maturity. Naturally, Tudatong, the fourth - ranked player in the industry, has every reason to be anxious.

In terms of market share, as of last year, Tudatong's global market share in the passenger car lidar market had dropped to 12.8%, far lower than Hesai's 20.3%, Huawei's 19.1%, and RoboSense's 16.7%. The latter three account for nearly 60% of the global market.

(Source: Tudatong's prospectus)

In essence, Tudatong's lagging behind is due to the misalignment between its technology route and market demand. The 1550nm route it adheres to is more suitable for high - end ADAS/ADS, such as L4 - level autonomous driving. However, the current mainstream market demand is for L2+ - level assisted driving, which requires low - cost and highly reliable lidar. The 905nm products happen to meet this demand.

Looking at the industry as a whole, the lidar market has broad prospects. According to IDC data, the penetration rate of global smart cars will reach 45% in 2025. As the "eyes of ADAS", the penetration rate of lidar will increase from 10% in 2023 to 35% in 2025. The global lidar market size will grow from $3 billion in 2023 to $10 billion in 2025, with a compound annual growth rate of 77%.

However, behind the high - growth trend is the cruel price war. The price of lidar has dropped from 20,000 - 30,000 yuan in 2022 to around 1,000 yuan in 2025, significantly squeezing the profit margins of enterprises. Therefore, developing a second growth curve has become a common direction for lidar companies to maintain growth.

(Source: Tudatong's prospectus)

The core direction of the second growth curve is the robotics field. The growth rate in this field far exceeds that of the passenger car market.

In terms of the current progress, RoboSense shipped 46,300 lidars for robots in the first half of this year, a year - on - year increase of 400%. Hesai Technology delivered 98,300 units in the first half of this year, a year - on - year increase of 693%. Although Tudatong has won orders from companies such as Jiushi Intelligence and Zhongli Co., Ltd., its shipments of lidars for robots in the first half of 2025 were only 5,000 units, far behind its competitors in terms of scale.

It is worth noting that the leading lidar companies have shown a clear "dual - engine driving" structure.

Taking Hesai as an example, the ADAS business is undoubtedly the cornerstone business, contributing the vast majority of the company's revenue and gross profit. The high - growth rate of the robotics business currently contains a certain factor of a low base, and its revenue share in the same period is not high. In the short term, its contribution to the overall performance is limited, but it can improve the overall gross profit margin and raise the valuation ceiling.

Against this background, Tudatong is in a difficult situation in terms of generating profits. The expansion of its ADAS business is blocked in the price war, and it has become a red - ocean market. The monetization of its robotics business, a blue - ocean market, is far from reaching the explosive stage. After the SPAC listing, Tudatong's challenges are just beginning.

*Disclaimer:

The content of this article only represents the author's views.

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