The Lidar U-Turn: Elon Musk’s “Fool’s Errand” Becomes Tesla’s Secret Weapon
- By Lachlan Colquhoun
- June 25, 2024
When Tesla boss Elon Musk attacked Lidar technology’s use of in-vehicle navigation as a “fool’s errand” back in 2019, this was seen as a major setback for the future use of the technology.
Musk’s continued comments on Lidar have been quoted many times. In 2020 he said that its use in cars was “freaking stupid.”
“It’s expensive and unnecessary,” he said. “You have expensive hardware that’s worthless on the car.”
Lidar stands for light detection and ranging, and while it was invented in the 1960s with the invention of lasers, it was in the development of autonomous vehicles that many hoped the technology would come into its own.
Negative comments from the leader of a visionary company that was also leading the world of autonomous vehicles were not what Lidar technology needed.
Tide is turning
A few years later, however, it was quietly revealed that Tesla had become the biggest customer of Luminar, a major Lidar manufacturer.
The Luminar earnings report released in May showed that Tesla contributed over 10% of the company’s first quarter 2024 revenues, totaling more than USD2 million.
Those numbers are not huge, but they could indicate that the tide is turning in Lidar’s favor.
“The emergence of Lidar in the lower-priced segments reflects the rapid fall in the cost of the technology.”
According to a recent report from analysts IDTechEx, the global market for automotive Lidar will reach USD9.5 billion by 2034, representing a CAGR of 19.5% compared with 2024.
It is not just the automotive industry that is using Lidar now.
Alongside the longstanding deployment of radar, Lidar is now finding some military applications with commercial implications.
Lidar systems mounted on drones, piloted aircraft and ground vehicles assist in target identification and tracking.
They deliver accurate distance measurements and detailed imagery, which help distinguish between objects, such as enemy personnel and equipment.
Civilian drones are also developing as a promising Lidar market. Japanese company Kudan announced in June that its SLAM lidar technology had been incorporated into the Terra Lidar Dual, launched by drone solutions provider Terra Drone.
This deal integrated the laser technology developed for drones by Terra Drone, making it possible to switch between ground and airborne measurements with a single device.
It also enables the SLAM Lidars to take measurements where drones cannot fly, such as under bridges, and integrate the data with the UAV laser.
Another positive development for Lidar is from tech giant Apple, which uses the technology in its iPhone cameras beginning with the 12 series introduced in 2020.
Lidar helps the camera take sharper photos, especially in dark conditions. The scanner also taps into augmented reality to combine the real and virtual worlds.
Chinese automakers lead the charge
Tesla is not the only player turning to Lidar in the car industry.
In 2023, more new cars were released with Lidar technology than in the previous four years, with Chinese manufacturers leading the charge.
Chinese manufacturers are set to release around 128 models with Lidar this year, according to analysts at the Yole Group.
“This makes it a far bigger market than Europe, where around 10 new car models are expected to be released, and the US with only two,” says Yole Group analysis.
Price, which has historically been Elon Musk’s bugbear, is also coming down.
Yole says that the average selling price for Chinese cars with Lidar is around USD450-500, a sharp decrease in 2022, while the price in the rest of the world averages between USD700-1000.
The global Lidar market for passenger cars, light commercial vehicles and robotaxis was estimated at USD538 million in 2023, representing a 79% year-on-year increase.
Right now, more passenger cars are being manufactured with Lidar than robotaxis, but this segment is set to grow, and that gap will decrease over time, representing another growth market.
At least three car platforms with Lidar are likely to be released by Japanese and South Korean OEMs in 2024 or soon after.
“The emergence of Lidar in the lower-priced segments reflects the rapid fall in the cost of the technology because if you have a lower price for the car, then all the equipment is much more cost-sensitive,” said Pierrick Boulay, senior analyst at Yole Group.
All of this shows that with some technologies, it takes time to mature, but growth can take off rapidly when they find their moment.
In Australia, QR code technology was never a thing before the COVID-19 lockdowns; now, it is everywhere.
Hollywood star Hedy Lamarr developed Bluetooth technology and filed a patent in 1941, but it is only in recent decades that it has become one of the bedrocks of connectivity.
At one time, Elon Musk was a fierce critic of Lidar. Now he’s installing it, although he has yet to come out with a ringing endorsement.
We’re still waiting for that.
Image credit: iStockphoto/Frank Armstrong
Lachlan Colquhoun
Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and the NextGenConnectivity editor. He remains fascinated with how businesses reinvent themselves through digital technology to solve existing issues and change their business models.