This market research report was originally published at the Yole Group’s website. It is reprinted here with the permission of the Yole Group.
There are today two distinct LiDAR markets: China and the rest of the world. In China, approximately 128 car models equipped with LiDAR are expected to be released by Chinese OEMs in 2024 or shortly thereafter. Meanwhile, Valeo stands out as the leading non-Chinese LiDAR manufacturer…
The LiDAR market for passenger cars is experiencing significant growth, with total revenues in 2023 reaching $414 million, more than doubling from 2022. While Chinese manufacturers currently dominate the market, Valeo, a global automotive Tier-1 supplier, stands out as the leading non-Chinese manufacturer capable of targeting OEMs worldwide.
Valeo has been a pioneer in the automotive LiDAR market since 2017. The Valeo SCALA™ 1 was the first LiDAR integrated into passenger cars by Audi, and since then, Valeo’s LiDAR performance has significantly improved, culminating in the advanced Valeo SCALA™ 3.
Pierrick Boulay, Senior Technology & Market Analyst, and Benjamin Pussat, Senior Analyst, Systems Teardown, both at Yole Group, spoke with Clément Nouvel, CTO of Valeo LiDAR Systems. Together, they reviewed the LiDAR industry, the current challenges, and highlighted the technology evolution at Valeo. They discussed Valeo’s strategy and its plans for technology development, especially Autonomous Driving (AD), AI, and software solutions.
Discover today this revealing conversation between Valeo LiDAR Systems and Yole Group.
Pierrick Boulay (PB): Could you please introduce yourself to our readers?
Clément Nouvel (CN): Thank you, Pierrick, for offering me this interview; I am delighted to discuss Valeo’s activities in the field of LiDAR sensing!
My name is Clément Nouvel and I am CTO of Valeo LiDAR Systems. As such, I am responsible for Valeo’s LiDAR product development and represent a global team spanning Business Development, Engineering, Technology Partnerships, and advanced developments. This includes LiDAR sensors (hardware) and perception stack (software and AI).
Prior to this role, I was in charge of Active Safety Business Development for five years at Valeo. I started my career working for Renault-Nissan Alliance in Research and Development around 20 years ago and held several positions focusing on innovation engineering and project management, both in France and in Korea.
Bringing innovations to the market has always been my passion, and the last twenty years have shown how the automotive industry has become an exciting – however always challenging – area to make an impact on people’s daily lives.
Autonomous Driving (AD) comes with great promise, hence great responsibility for all those involved in its development.
PB: The Valeo SCALATM 3 seems to be a major change compared to the previous generations. Can you tell us more about how you achieved this jump in Performance?
CN: Indeed, the Valeo SCALATM 3 is a clear breakthrough in performance on the market, from 255 thousand points per second to a staggering 12.5 million points per second (single echo).
This is an unprecedented resolution for an automotive-grade LiDAR sensor, developed to meet OEMs’ needs and tackle real-life corner use cases.
Customer challenges have been at the core of our technology choices. We learned about these challenges by iterations through 4 completed automotive programs from Valeo SCALATM 1 to Valeo SCALATM 2.
Valeo SCALA™ 3 Satellite sensor: Point cloud & passive image overlay
Valeo capitalized on the correct choices of technology that had the most potential to get to maturity midterm for automotive.
Actually, in 2024, Valeo received the PACE Award, industry recognition for the Valeo SCALATM 3 perception system; the recognition is not only for the hardware performance breakthrough but for the perception system approach, allowing Valeo to be in a unique position in the market.
Building on twelve years of continuous innovation and leadership in the LiDAR space, Valeo’s 3rd generation LiDAR perception system has been designed to deliver a breakthrough in performance and utilization, addressing major bottlenecks in Autonomous Vehicle scalability.
While Valeo SCALATM 1 and Valeo SCALATM 2 represented incremental steps in design and performance, they allowed Valeo to establish its leadership in LiDAR technology and deliver the world’s first automotive-grade LiDAR; it then rolled out, with customers such as Honda (in 2021), and Mercedes-Benz (in 2022) the first level 3 systems in the world.
With our 3rd generation LiDAR perception system, Valeo is leapfrogging in sensor performance and perception performance thanks to the add-on of a 4th dimension that allows leveraging camera-like AI.
Compared to the previous generation, the Valeo SCALATM 3 optical head delivers an outstanding 50x points per second (more than any other player in the industry) and adds a 4th sensing dimension (passive image) synchronized in time and space with the point cloud. This dual, very high-density output allows us to speak about LiDAR “images” and use Artificial Intelligence algorithms that were so far used for cameras, bringing LiDAR perception to an entirely new level, including low-level fusion.
Our software capabilities allow us to provide an extensive suite of modules and LiDAR functions, from point cloud classification, object tracking, blockage detection, rain & spray detection, online calibration and misalignment detection, guaranteeing unparalleled availability, safety, and reliability.
Accurately detecting debris, resolving unusual-shaped objects in 3D, and avoiding unknown objects thanks to the native 3D sensing enables a much wider (and valuable) level 3 availability that is compatible with robotaxis’ level 4 performance requirements using a series production sensor.
With these unique characteristics, the Valeo SCALATM 3 has the potential to bring Autonomous Driving to large-scale adoption.
In a nutshell, Valeo reinvented the classical approach with the lessons learned from the past generations and the increased technological progress of the suppliers (Let’s not forget about ecosystem development, the only viable way to success!),
Yole Group observed in its automotive Teardown Tracks in publications that some of your competitors are making or will make their own processing chips, whether it is ASIC or MCU.
Benjamin Pussat (PB). What would be the advantages of making your own chip? Would it be a solution to get rid of the costly FPGAs embedded in all LiDARs?
CN: We are closely following the vertical integration trends, especially in China, where it is an answer to the ongoing price war. This commoditization trend is not taking place uniformly across regions, leading to a substantially fragmented market. In addition, the LiDAR offering is evolving rapidly, quickly leaving products irrelevant to meeting customer needs.
The industry, from OEMs to Tier 2 suppliers, is still learning how best to use LiDAR on vehicles and how best to develop LiDAR components.
In such a market landscape, vertical integration might be tempting but often results in costly development costs, very risky ROI, and a heavy burden on a product roadmap that has to remain flexible.
Rather than betting on unpredictable volumes and standards, we are driving these changes today with the necessary agility that some components and solutions allow, especially coming from reliable, best-in-class automotive partners.
Synergies across products, however, make sense for us as a system provider and a global leader in ADAS. In that sense, using common processing solutions between ADAS applications definitely brings a competitive advantage.
Additionally, our products follow the larger Valeo strategy in terms of data processing centralization and the Software Defined Vehicle. For LiDAR perception, this means that most of the processing will likely migrate to a central computing unit, making the LiDAR a satellite sensor. This will come with new business models and will facilitate a wider adoption of LiDAR on vehicles.
Integration of LiDAR is still a strong topic for OEMs and Tier-1s as it can affect the design of a car.
PB: Can slim LiDAR be the right solution to ease the integration on the roof or behind the windshield? Can you tell us more about the challenges linked to reducing the size of LiDARs?
CN: Whatever position is chosen in the vehicle, integrating a LiDAR smoothly in a car remains an extra challenge for all OEMs that have limited experience with it today.
With the Valeo SCALATM 3 Satellite, Valeo has indeed moved to bring a slimmer design to the market to ease that challenge for our customers.
Valeo SCALA™ 3 Satellite
Our specific design allows us to integrate the sensor with a passive cooling concept and therefore provides a lot more freedom when it comes to integration and flexibility without compromising performance.
The same sensor can be equipped within the front fascia of the vehicle or on the roof, according to an OEM’s design preferences.
When it comes to behind windshield positioning, other challenges are added. Indeed, the glass manufacturer must then be part of the discussions; all cars have different angles, making it not as straightforward. Technical challenges can be overcome, but a strong alignment with OEM, glass manufacturer, and Lidar supplier is necessary to ensure success.
Overall, standardization is a challenge today, as many parameters are at stake, and the right balance must be found. Bringing further fixed sensor position across OEMs, or some convergence, would allow us to further enhance the performance of software and algorithms.
It is quite straightforward: the more standardized the mounting position is, the more dataset and validation campaigns we will have completed, the more experience and AI training of our best-in-class algorithms can be done! Hardware is the tip of the iceberg, but to increase the Operational Domain Design of end-user functions delivered by OEMs, any modifications must be considered with software, perception, and system view in mind.
FMCW LiDARs are just emerging and used in niche markets as of today. Automotive could be targeted by the end of the decade.
PB: How do you see this technology at Valeo? Could you see FMCW LiDARs coming in addition to ToF LiDAR in a car (like Aurora is doing), or do you expect they will replace ToF LiDARs?
CN: Valeo has been investing in FMCW LiDAR technology since early on, with the ambition of preparing for the next LiDAR sensing generation. With velocity information, FMCW LiDARs bring another dimension of richness per point that will allow us to improve the perception capability, especially in a number of critical corner cases (for example, in maneuvering operations). We have no doubt about the potential of this technology in terms of compactness and pricing.
Furthermore, Valeo has extensive experience in FMCW with more than two decades of experience in radar development.
As an ADAS Leader across sensor technologies, we believe that mastering silicon photonics integration is a must to continue thriving in the future and follow the same path as radar sensors but in the photonics domain. Our assessment of the maturity of the technology shows that FMCW LiDAR could be introduced in the automotive market with the right level of quality and scalability toward the end of this decade. We are actively preparing for this introduction and strongly believe in the cohabitation with ToF LiDAR sensors that have proven high performance, reliability, and cost-effectiveness.
We do not see a ramp-down of ToF systems, such as the Valeo SCALATM 3, before 2035 and will work with potential early adopters of the FMCW technology before 2030.
PB: We have seen that Chinese LiDAR manufacturers can now offer much lower prices to their customers. How is Valeo addressing the cost challenges? Is it only a question of volume?
CN: Today, the end customer value of LiDAR sensing is seen very differently across customers and regions. Some regions have introduced this technology leveraging its technical value (the missing part to achieve driving delegation), while others have rather used its marketing value first.
This “value equation” is now converging across all players around the basics: a safety-enhancing innovative technology that can suffer no compromise when it comes to quality and reliability, whatever the convenience features the end customer is buying.
Valeo has been excelling in this convergence, leading to the introduction of the historical first level-3 systems in Europe and the USA. To scale up this market, one of the drivers to make these systems affordable is efficient production, reliable software, and best-in-class perception performance to provide an attractive end-customer experience – all capabilities Valeo has, with a proven track record.
PB: Would you like to add any closing thoughts for our readers?
CN: Our LiDAR technology development journey is a great illustration of Valeo’s position in the automotive industry today: finely curated innovation delivered to the market following our automotive DNA. No compromise on reliability or performance and a constant focus on price to make a social impact. Over the years, Valeo has developed a unique leadership in parking, driving, and in-cabin experience that will profoundly transform the way people move – either using their own vehicle or automated taxis – and goods being transported.
Most of our engineers who have been developing our sensors with great passion since the Valeo SCALATM 1 know it: the potential of LiDAR technology is fascinating and yet still largely untapped. Whether we proceed with incremental technology steps or leapfrog to new concepts, we assert that LiDAR sensing will keep supporting our customers’ challenges and excite end-customers for many years to come!
