Smart car push drives revenue up for Hesai

First quarter income hits record 429.9m yuan but high R&D costs result in net loss

Hesai Group, the world’s sixthlargest maker of sensors for smart cars, posted a record revenue in the first quarter of this year, benefiting from Chinese carmakers’ stepped-up efforts to make their electric vehicles more intelligent and capable of autonomous driving.

The Shanghai-based company reported revenue of 429.9 million yuan (HK$477.6 million) for the three months ended March 31, up 73 per cent year on year, according to an earnings report filed to the Nasdaq after the market closed on Tuesday.

Hesai said it shipped 28,195 advanced driver assistance system (ADAS) lidar (light detection and ranging) sensors – key components in vehicles with preliminary autonomous driving technology – between January and March, a 12,600 per cent increase compared to 222 units in the same period last year.

But Hesai, which counts Li Auto, Jidu and Lotus as clients, posted a net loss of 118.9 million yuan for the quarter due to high research and development costs, which jumped 99.2 per cent to 208.5 million yuan.

The company said it had secured orders for its lidar sensors from 11 car assemblers and it expected deliveries for use in smart vehicles to climb 40 per cent in the second quarter compared with the first quarter.

“Smart vehicles, particularly smart electric cars, with autonomous driving technology and digital cockpits, represent the trend of the automotive industry,” said Gao Shen, an independent analyst in Shanghai.

“Customers can benefit from lower cost of the sensors when a large volume of the products are made by lidar makers.”

Overall deliveries of all types of lidar sensors rose 403 per cent from a year ago to 34,834 units. The company’s non-ADAS lidar sensors are used in applications such as robotics and agricultural vehicles.

Louis Hsieh, chief financial officer of Hesai, said in a statement after the release of the first-quarter earnings that the company’s sales and a backlog of orders would help it maintain its leading position in the ADAS lidar segment.

China is the world’s largest car market overall and also the largest electric vehicle market, with deliveries of pure electric and plug-in hybrid cars expected to hit 8.8 million units in 2023, up 35 per cent on year, according to UBS analyst Paul Gong.

Up to 15 per cent of all new electric vehicles will have at least partial automation within the next three years, according to Baidu, China’s dominant internet search engine operator, which created an open-source autonomous driving platform in 2017.

That translates to about 400 million smart cars that can drive on highways as well as city roads, and park themselves with partial or conditional human intervention.

China supplies about 60 per cent of vehicle lidar sensors globally.