Commercialization of autonomous driving: Some go to ICU, some go for IPO.

Automatic Driving IPO Frenzy, Front-Loading Production Push?

Author: An Fujian

Since Baidu began developing unmanned vehicle projects in 2013, this year marks the tenth year for Chinese companies’ layout in autonomous driving. A group of companies have started to gather for IPOs.

In February of this year, after Hesai Technology won the title of “First Stock of LiDAR,” IPO financing has become a recent hot topic in the domestic autonomous driving industry, with at least four planned IPO events reported in the industry, including Momenta, Zhixing Technology, Wenyuan Zhixing, and IMa Technology.

Since 2021, many leading companies in the industry have experienced turmoil, involving changes in executives, layoffs, and closures.

In April 2021, former Waymo CEO John Krafcik resigned from Waymo. In March 2023, Hou Xiaodi, founder and technical core figure of TuSimple, announced his resignation from TuSimple’s board of directors and may permanently leave TuSimple.

Recently, Embark Trucks, an autonomous trucking company, announced its closure, becoming the first autonomous driving listed company to go bankrupt. Earlier, Argo AI, a self-driving star company with a valuation of over 7 billion U.S. dollars, was also closed down by Ford.

Autonomous driving leader Waymo announced layoffs of 137 employees in early March, with most of them concentrated in technical positions. According to statistics, since 2023, Waymo has seen a total of 209 employees laid off.

On the road to commercializing autonomous driving, some are going for IPOs, while others are going to the ICU.

Who will be the next?

Automatic Driving IPO Concentration, Front-loading Production Push?

In the secondary capital market, China’s autonomous driving industry has been sluggish for some time.

In April 2021, TuSimple was listed on NASDAQ and won the title of “Global First Autonomous Driving Stock”; in June of the same year, Didi’s data security issues caused a regulatory storm, and the IPO plans of and IMa Technology were stranded in the U.S.

In October 2022, according to overseas media Startribune, Wenyuan Zhixing’s listing and US IPO accelerated, and it was later publicly denied by official sources.

It was not until November last year that the industry haze gradually cleared. Atour Hotel landed on NASDAQ, and a turning point appeared in the US IPO market.In February this year, Hesai Technology successfully IPO’d in the US, becoming the largest Chinese company to go public in the past 18 months, and with a market value exceeding 2.6 billion US dollars, it has become the “first domestic LIDAR stock”. Since then, autonomous driving IPOs have emerged in March, with at least four IPO events reported this month.

On March 6, Momenta announced that it is likely to IPO in Hong Kong or the US this year, raising up to 1 billion US dollars. On March 13, according to Bloomberg, WeRide plans to IPO in the US, seeking to raise up to 500 million US dollars in funding in a confidential manner. It was previously reported that WeRide would go public in Hong Kong and raise 200-300 million US dollars. In addition, there are also reports that IMa Technology may restart its US IPO.

Despite the opinion that the industry is in a winter slump due to events such as Waymo’s first layoffs in over a decade, autonomous driving IPOs are still concentrated.

Overall, the driving force behind enterprise IPOs is the intersection of L2+ “mass production” in the autonomous driving field. Specifically, there are two important changes at both ends: ADAS is moving towards L2+ and L4-level autonomous driving companies are moving towards L2+. The catalyst behind this two-way swerve towards L2+ is the popularization of high power computing chips and LIDAR.

Previously, the two were not overlapping: ADAS was an auxiliary driving system with weaker dependence on artificial intelligence compared to L4-level autonomous driving. The rapid implementation of front-loading L2+ mass production plans is becoming a lifeline for commercializing autonomous driving.

According to data from CIC, it is estimated that by 2025, the penetration rate of intelligent vehicles with L2-level ADAS globally will reach 53.99%, while the penetration rate of autonomous vehicles with L3~L5 levels will only reach 1.36%. This data has become to some extent a “decoder” revealing this IPO boom. Due to technological and commercial bottlenecks, L4-level autonomous driving companies, which have been relying on financing for survival, are moving towards L2+ autonomous driving front-loading mass production.“`

Considering its purpose, one is to drive revenue scale through mass production to achieve profitability, while the other is to use IPO financing to drive revenue scale.

Hesai Technology is a typical case of achieving profitability by running mass production and going through IPO, but it also reflects the current dilemma of the autonomous driving industry.

As shown in the latest prospectus submitted by Hesai Technology, its net losses for the first nine months from 2019 to 2022 respectively reached 120 million yuan, 107 million yuan, 245 million yuan, and 165 million yuan.

From 2017 to the end of 2022, Hesai’s shipments of LiDAR sensors exceeded 103,000 units, with 80,400 units shipped last year alone. However, Hesai’s gross margin dropped from 70.3% in 2019 to 44% in the first three quarters of last year.

Why has the gross margin decreased while more LiDAR sensors are being purchased?

“As the sales volume of ADAS market products and export shipments increase, the average selling price of LiDAR sensors will decrease. In addition, the selling prices of ADAS products will decrease by about 10% to 20% each year,” Hesai wrote in the prospectus.

It can be seen that in the field of LiDAR sensors, ultra-low gross margin has become increasingly normalized as the selling price enters a downward trend.

For autonomous driving companies that have not yet formed a commercial closed loop, once external blood transfusion is interrupted, there is a risk of fund chain rupture.

After years of investment without return, when the money pit is essentially unable to continue, more investment institutions in the primary capital market choose to “observe coldly.”

When first-level market funds are difficult to find, autonomous driving companies on the brink of survival will enter the ICU if they do not go public to raise funds.

At this time, the priority of IPO is magnified. In the wave of L2+ pre-installed mass production, some enterprises that have basically run a commercial model have gained more confidence in entering the secondary capital market.

Therefore, two aspects have emerged in the commercialization of autonomous driving: some are undergoing IPO, while others are in the ICU.

Behind the industry reshuffle, the road to commercialization is a “double-edged sword.”

While a group of Chinese autonomous driving companies took an important step towards commercialization through L2+ pre-installed mass production, some leading foreign enterprises are experiencing a “cold winter”.


First hit by the capital winter are the L4 autonomous driving companies.

Around 2017, Waymo under Google and Cruise under General Motors launched Robotaxi services in some regions of the United States, the commercialization of L4 autonomous driving began to emerge, and to some extent, it promoted the domestic boom of autonomous driving startups.

Today, industry leaders are struggling to survive.

The American autonomous driving "giants" - Waymo has cut more than 8% of staff this year, and this is also the first time that Waymo has cut staff in more than 10 years since its establishment; after burning nearly 2 billion US dollars, Cruise announced recently that it will focus on cost cutting this year.

In addition, Aurora, a listed company that once acquired Uber's autonomous driving business, is considering selling itself to an OEM or technology giant.

Argo AI, backed by Ford and Volkswagen, announced the closure at the end of 2022 after burning up to 3.7 billion US dollars. The two founders of Argo AI recently revealed that they will start a new company again, or turn to autonomous driving freight.

The field of autonomous driving freight, which was once thought to be able to lead the commercialization, is also not doing well.

Embark Trucks, an autonomous driving truck company and former capital darling, recently announced its closure, becoming the first autonomous driving listed company to go bankrupt. The reason for the closure was that it had not been able to carry out substantial business operations after seven years of operation.

Compared with the IPO boom caused by WeRide's landing on the US stock market in China, in the field of lidar, including Velodyne, the pioneer of lidar, Quanergy, Ibeo, since 2022, they have fallen one after another, encountering the fate of merging, delisting, or closing.

The willingness of capital markets to give companies high valuations lies in their expectations for their technology realization. After several years of exploration, the lack of commercial success has led to a sudden drop in the winter of the autonomous driving industry when capital cannot wait.

And surviving through commercializing L2+ autonomous driving is becoming the main narrative of the autonomous driving industry.

After the closure of Argo AI by Ford and Volkswagen, they announced that "they will focus on providing more direct returns for driving assistance technology." On March 2, Ford announced the formation of a new company,, and hired 550 employees from Argo AI.



Country hot and cold.

Focusing on L2+ commercialization, overnight became the "hope of the whole village" for autonomous driving.

As early as last year,, WeRide, and all increased their L2+ autonomous driving efforts:

- In January, released its autonomous driving solution for forward installation production;
- In May, WeRide and Tire 1 supplier Bosch entered the game, jointly developing L2++ advanced intelligent driving projects that are expected to be mass-produced and listed in 2023;
- At the same time, announced its cooperation with Horizon Robotics, becoming a provider of "high-speed+urban" NOA assisted driving solutions based on the Horizon Journey 5 chip.

L4 autonomous driving companies begin to show a trend towards a comprehensive turn.

However,, WeRide,, and other highly regarded L4 autonomous driving companies have been slow to transition to L2+ advanced intelligent driving.

Since its inception in 2016, Momenta has proposed the concept of "walking on two legs" (mass production of autonomous driving and L4 autonomous driving). In 2021, Momenta, whose business model has been validated, has become a popular newcomer in capital and raised **1 billion US dollars** led by SAIC Group.

As early as 2018, Zong Yang, CEO of WeRide Technologies, publicly stated that "L5-level autonomous driving technology that can meet all scenarios will not be possible within ten years." WeRide Technologies is also a company that entered the L2 mass production level of autonomous driving solutions early on.

The early bird catches the worm.

Momenta has obtained orders from SAIC and achieved delivery in Ji L7. SAIC Group, who is unwilling to hand over the "soul" of autonomous driving, is deeply bound to Momenta;

After receiving more than 100,000 orders for JiKe 001 from Zeekrxueyuan in October 2021, WeRide Technologies successively obtained mass production orders for multiple models from many first-tier automakers, including Great Wall, Chery, Geely, Smart, etc.

At first glance, the commercialization of companies that entered mass production first seems smooth.

In fact, the distance between ICU and IPO is much shorter than the outside world imagines.

Behind the "two-faced" situation of autonomous driving at home and abroad is actually two different interpretations of the same fate.


Who Will Be the Next IPO?

In the L2+ commercialization wave, who will be the next IPO in the field of autonomous driving?

During the landing process of L2+ front-loading mass production plans, the direct beneficiaries come from the three major fields of L2+ front-loading mass production plan provider, lidar manufacturer, and autonomous driving chip and computing power provider.

A batch of IPO enterprises in the field of autonomous driving is on the way.

Recently, Zongmu Technology’s STAR Market (​上海证券交易所科创板) IPO has resumed “inquired” status.

Previously, Zongmu Technology’s review was once in a “suspended” state: In November 2022, it submitted a prospectus to the STAR Market, and 4 months later, it was suspended because the financial information in the prospectus had expired.

Zongmu Technology has established cooperation with many domestic mainstream automakers in the production of intelligent parking technology projects, including Changan Automobile, etc.

Zongmu Technology raised more than 1 billion yuan in financing last year.

Furuiteck has also completed the financing at this level. On January 31st of this year, Furuiteck completed the B round series financing quota within 3 months, with a cumulative amount of nearly 1 billion yuan, and is currently planning to declare IPO landing on the STAR Market in 2023.

The commercialization of the lidar field, which plays a catalytic role in the mass production of L2+ autonomous driving, is relatively smooth.

After listing, Hesai Technology once exceeded Luminar and became the market value leader of listed lidar companies.

In the year 2022, which is regarded as the first year of mass production of lidar, the shipment volume of lidar carried by domestic passenger cars is about 160,000 pieces.

Among them, the combined share of Hesai Technology, Tudatong, and Suteng Juchuang is 96.9\%. The news of IPO has been spread from the latter two.

Huatai Securities predicts that the shipment volume of lidar used for ADAS will increase 20 times from 2023 to 2027. Due to the rapid iteration of lidar technology, latecomers have the opportunity to surpass others. The companies such as Yijing Technology, Tandev Technology, and Liangdao Intelligence have completed financing.

In the field of in-car AI chips, in August last year, Horizon Robotics announced plans to raise $100 million to $200 million and consider listing on the Hong Kong Stock Exchange.

This January, HeiZhiMa Intelligence announced its plan to go public in Hong Kong, with a fundraising goal of approximately USD 200 million.

These companies, which have made progress in commercial exploration, have successfully come to the threshold of IPO.

Without a complete and reliable commercialization path, completing an IPO is just a stopgap measure, a temporary “reprieve”.

According to Guidehouse’s forecast, of the dozens of self-driving companies currently, no more than 10 will be able to survive until 2030.

At least for now, self-driving companies need to develop a sound business model and increase profitability in order to make a wise plan for the future.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email