After the release of a revolutionary business plan, Hesai Group (NASDAQ: HSAI) stock price saw a sharp increase. HSAI shares surged 44.42% on Tuesday, closing at $6.86. This increase is a reflection of investor confidence in the company’s intentions to greatly expand lidar technology’s accessibility.
Ambitious Price Cuts to Accelerate Lidar Adoption
In order to increase its use in electric cars (EVs), Hesai unveiled that it will lower the price of its flagship lidar device by 50% in the upcoming year. HSAI CEO David Li stressed in a Reuters interview that cutting the price in half will make lidar a desirable choice, even for EVs that are more affordable and cost less than 150,000 yuan ($20,000).
The price cut is expected to raise the average adoption rates for EVs priced above this level to 40%, from the present rate, according to Gasgoo.com, of 24% for Chinese EVs and plug-in hybrids. Advanced driver assistance systems (ADAS) and self-driving technologies heavily rely on Lidar, a technology that uses lasers to provide three-dimensional (3D) images of a vehicle’s environment. Like airbags and seatbelts, HSAI wants lidar to become a standard safety feature in EVs.
Advanced Products and Manufacturing Expansion
Hesai’s forthcoming ATX lidar model for ADAS will retail for under $200, significantly cheaper than the current AT128 model. This cost reduction will be achieved through self-developed chips and optimized factory operations. Anticipating strong demand, Hesai plans to ramp up its Hangzhou plant’s annual production capacity to 1.5 million units.
The company, which supplies leading Chinese automakers such as Li Auto and BYD, reported a tripling of lidar sales to nearly 130,000 units in Q3. Buoyed by this growth, HSAI expects to achieve breakeven financial performance in the current quarter, reversing a Q3 net loss of 70.4 million yuan ($9.7 million).
Global Expansion Amid Trade Challenges
Hesai is actively pursuing opportunities to expand its footprint internationally and is in discussions with global automakers. To address potential trade barriers in markets like the U.S. and Europe, HSAI is exploring the establishment of overseas production facilities, aligning with local job creation and market access strategies.
