With Ouster and Velodyne merger done, CEO says automotive lidar needs to be solid state and cheaper

The auto industry needs lidar to become less expensive and solid state.

That’s the assessment of Ouster CEO Angus Pacala as he starts to integrate the operations of the Velodyne lidar business following the closer of a $355 million merger of the two companies last week.

The merger between the two companies will provide laser-based sensor technology to a combined 850 customers across 50 countries in the automotive, industrial, robotics and smart infrastructure industries. It will trade on the New York Stock Exchange as Ouster.

The merger will help the combined company survive a consolidation in the lidar industry, said Ouster CEO Angus Pacala.

Lidar developers Quanergy Systems of Sunnyvale, Calif., and Ibeo Automotive Systems of Hamburg, Germany, both filed for bankruptcy reorganization last year.

Pacala said the Ouster-Velodyne combination “is really about providing a future for tech development and building a business that’s financially secure.”

The merger is expected to save $75 million on annual operating costs.

“But there’s still more work to be done, specifically with digital lidar silicon chip-based products and solid-state lidar that will make it affordable enough that it can go in every car and go in every streetlight and you name it,” he told Automotive News.

Lidar products will have to be solid state and cost automakers in the “low hundred dollars,” Pacala said.

Other sensor systems such as cameras and radars have made similar technological and cost reduction leaps, he said. The radar cost reductions came from “silicon integration and semiconductor integration onto a very reduced number of chip sets,” he said.

Lidar technology can get to the price point of automotive radar because it has only three cost centers: the silicon receiver chip, laser and glass optics, Pacala said.

“Those requisite parts at volume should be in the low, low, low hundred dollar technology at ultra-premium performance points,” he said.

However, there are challenges to achieving that goal. Global supply chains continued to be roiled by geopolitical turmoil and the fallout from the COVID-19 pandemic. And the the nascent robotaxi business, once viewed as a major customer base for lidar, has suffered from declining capital availability.

Problems also remain with the semiconductor supply chains.

“It’s painful, it’s increased prices 25 percent globally across semiconductors. But that’s still way below any kind of other alternative technology for lidar out there,” Pacala said.

While the robotaxi business has taken a step back, there is an opportunity to bring lidar technology to the industrial sector, including forklifts, commecial vehicles and other equipment, Pacala said.

“I think that this merger is a big deal for the industry,” Pacala said. “The combined company is a powerhouse in lidar. We’re here to stay, we have the resources to build the best customer-facing organization in the world.”