The archive · Hardware & Devices · Strategic decision · 2013–2026
Hesai's loss-funded lidar bet pays: Nasdaq IPO to Mercedes L3 and first profit
Hesai bet Chinese EV price wars would make lidar a standard ADAS sensor; years of losses bought scale, then 2025 brought first full-year profit.
Hesai Group (Hesai Technology / 禾赛科技)
What the business is
Hesai makes lidar sensors, the laser-based 3D perception hardware automakers and robot makers need for assisted and autonomous driving, selling devices plus perception software across China, Europe and the US.
Starting capital：$190M raised in its February 2023 Nasdaq IPO; its earlier STAR-board application, approved in January 2021 to raise over RMB 200M at a RMB 10B valuation, was withdrawn two months later.
How it started
Founded in Shanghai in 2013, according to TechCrunch, by engineers including Li Yifan, Hesai rode the autonomous-driving boom and by 2022 was already the largest lidar maker by shipments, shipping over 80,000 units that year and more than 100,000 cumulatively between 2017 and 2022.
What happened
Scale came at a price: net losses of RMB 120M in 2019, RMB 107M in 2020, RMB 245M in 2021 and RMB 165M in the first nine months of 2022, while a Chinese lidar price war cut gross margin from 57.5% in 2020 to 44% by late 2022 and US chip-export controls threatened its supply chain. Hesai still went public, raising an upsized $190M on Nasdaq in February 2023 and closing day one up nearly 11%, at a moment when Western rivals were collapsing — Quanergy had filed for bankruptcy and Ouster had merged with Velodyne. In 2024 shipments more than doubled to 501,889 units, the fourth straight year of doubling, and the company posted its first full-year non-GAAP profit of RMB 14M with Q4 2024 GAAP net income of RMB 147M.
How it ended up
Still scaling: Hesai reported 2025 full-year GAAP net income of RMB 435.9M, its first profitable year, and a 29.6% revenue rise to RMB 680.6M in Q1 2026, its fourth consecutive GAAP-profitable quarter. Management announced a Mercedes-Benz L3 autonomous-driving supply deal for Europe and China, with lidar produced at a new Thailand plant, plus a Toyota joint-venture order in China and a new "spatial intelligence" unit.
Background
Hesai, founded in Shanghai in 2013 and now Nasdaq-listed as HSAI, makes the lidar sensors that let cars and robots see in 3D. Its bet was contrarian for the hardware industry: instead of protecting margins on expensive robotaxi sensors, it chased volume from Chinese EV makers racing to sell smart driving, accepting years of losses to ride the price curve down.
The bet looked reckless in 2023. Frost & Sullivan had ranked Hesai the world's largest lidar maker by 2022 shipments, but the company lost RMB 245M in 2021 and was being squeezed by a price war that cut gross margin to 44% by late 2022, with US chip-export controls threatening its supply chain. Even so, it raised an upsized $190M Nasdaq IPO in February 2023 — the biggest Chinese listing in the US since Didi — while Western rivals Quanergy filed for bankruptcy and Ouster merged with Velodyne.
Volume then did the work the bet promised. 2024 shipments more than doubled for a fourth straight year to 501,889 units, with robotics lidar a fast-growing second market, and the company logged its first full-year non-GAAP profit of RMB 14M. In 2025 it reached full-year GAAP profitability, and by Q1 2026 it was profitable for a fourth straight quarter on RMB 680.6M of revenue, having won Mercedes-Benz L3 supply for Europe and China and a Toyota joint-venture order at home.
What has to be true
- Lidar was trapped in a niche until someone industrialized it; Hesai treated Chinese EV price wars as a subsidy for building that market.
- Losses were the price of the learning curve: each doubling of shipments pushed component costs down faster than rivals could match.
- The 2023 US listing was timed against Western consolidation, giving Hesai fresh capital exactly when competitors were out of money.
- Diversifying into robotics lidar in 2024–2026 turned a car-parts cycle into two growth curves and helped deliver the first profits.
What can be applied
When a sensor is becoming standard equipment, sell to scale even at a loss: volume bought the cost curve that made Hesai the first profitable lidar maker while rivals disappeared.
Aftermath
As of May 2026 Hesai is the industry's largest lidar maker and its first with sustained profitability: 2025 full-year GAAP net income was RMB 435.9M, and Q1 2026 revenue rose 29.6% to RMB 680.6M with shipments up 140.9% to 471,723 units. Confirmed programs include Mercedes-Benz L3 models for Europe and China, supplied from a new Thailand plant, and a Toyota joint-venture brand in China. Management also launched a "spatial intelligence" unit that is expected to add about RMB 100M of revenue this year. The company remains public and still scaling.
Sources
- Amid merger and bankruptcy in the West, lidar maker Hesai nails $190M IPO
- Hesai Group Reports Record Q4 and Full Year 2024 Financial Results with Significant Lidar Shipment Growth and First-Time Profitability
- Hesai to supply LiDARs to Toyota's joint venture in China
- Hesai sustains profitability as LiDAR shipments surge and secures Mercedes order
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