With costs falling for some of the most expensive autonomous driving technology parts, self-driving cars at a reasonable price point may be here sooner than investors may realize.
Pricing for the P5 isn’t available, but the new lidar sensor included from Livox won’t break the bank. Pricing should be available at the Shanghai Auto Show and shouldn’t be out of line with other XPeng models.
XPeng calls its autonomous driving technology XPILOT. The P5 will be equipped with version 3.5, which includes 32 sensors: two lidars (short for laser-based radar), 12 ultrasonic sensors, five radars, and 13 high-resolution cameras. XPILOT 3.5 also has a “high-precision positioning unit” and “dual perception fusion” that provides a 360° view.
It sounds complicated because it is. It’s important, however. Vehicles need a 360°, 3-D view to operate autonomously in a safe manner. And those sensors are only one part of the system. XPeng uses the Snapdragon auto-grade computing platform from Qualcomm (QCOM) as well as the company’s own proprietary software to process the information those sensors are collecting to make decisions in the blink of an eye.
Lidar appears to be a key enabler of autonomous vehicles as well, partly because of the technology’s ability to generate a 3-D picture. Lidar can also spot difficult-to-see objects that can be missed by cameras and traditional radar.
One of the problems for lidar is that the technology, to this point, has been too expensive. Complete systems can cost $100,000, meaning the vehicle needs to be generating revenue in order to justify the price for the average consumer. That’s why autonomous vehicles are being piloted in limited quantities as robotaxis. Waymo, for instance, is running a robotaxi fleet in Arizona called Waymo One. Its vehicles have what looks like an old-fashioned police light sitting on their roofs. That bump is essentially many lidar sensors generating a 3-D picture of the world.
Other companies, however, are driving down the cost of Lidar and taking a different approach from the spinning roof rack. Innoviz Technologies(INVZ) announced this week it has driven down the cost of its sensors by 70%. Livox, XPeng’s lidar supplier, boasts sensors that cost less than $600.
Falling costs have led to more recent lidar announcements from other auto makers. Volvo will have a Luminar Technologies (LAZR) sensor in production by 2022. BMW ( BMW . Germany) is using Lidar systems from Innoviz and Magna International (MGA). Porshe (PAH3.Germany) backed lidar start-up Aeva Technologies (AEVA). All the partnerships and investments are designed to get higher levels of autonomous driving on the roads in the next few years.
Tesla (TSL), however, isn’t using lidar despite having its sights set on full autonomy. Tesla uses a mix of cameras, ultrasonic, and radar sensors, along with its computing platform and software. Elon Musk‘s company is launching updated versions of its full self-driving software and believes it will achieve fully autonomous driving as soon as the end of 2021.
Some level of autonomous driving will be available for purchase to Tesla drivers soon. And based on the other announcements from lidar companies and auto makers, others may not be far behind. That would allow drivers to text and drive–safely–as soon as 2023.
Autonomous-driving and electric-vehicle stocks are struggling these days as money rotates out of more speculative growth stocks. Shares of XPeng, the company with the most recent lidar news, are down about 10% for the week and now down about 28% year to date. Shares of publicly traded lidar companies are down more than 50% from their 52-week highs. The Defiance Next Gen SPAC Derived ETF (SPAK) is down about 28% from its February 52-week high. The Dow Jones Industrial Average, home to many large, old-economy stocks, is up about 9% over the same span.
Tesla shares, are the notable exception and are up about 5% year to date. Still, even Tesla stock is 17% from its January 52-week high.