Baidu- and Ford-backed lidar sensor company Velodyne Lidar is planning to lay off more than 20 employees in its Beijing office and discontinue the direct sale of its lidar sensors in China, reported by local media outlet Huxiu.
Sources said that Velodyne’s CEO David Hall had decided to dismiss the sales team and scale down the technology support team, while keeping a few employees of after-sale services for key clients and sales channels. The company will later on adopt an agency to sell its products in China.
“(The layoff) is partly because the prices of Velodyne’s products are less competitive in China’s market. Also, the autonomous driving industry in China has faced many hurdles this year,” a source close to the matter told Huxiu.
Weng Wei, Velodyne’s Executive Director APAC, said the Beijing office is operating normally when contacted by 36Kr. However, several employees from Velodyne China confirmed the downsizing and said the number of people being let go was around ten.
Light detection and ranging, also known as lidar, is a technology that uses eye-safe laser beams to create a 3D representation of the surveyed environment. Lidar sensors are among vital components in self-driving autonomous vehicles with a Level 3 automation or above.
As one of the earliest entrants into the lidar industry, California-based Velodyne has established an unshakeable leadership in the global market. The company disclosed in March that it had shipped over 30,000 lidar sensors since 2007 with the sales reaching over USD 500 million. It also received a joint investment of USD 150 million from Chinese internet giant Baidu and American automaker Ford in 2016, and started its operation in China in the same year.
However, the lidar sensor market has been changed completely in recent years. Many new players emerged in this sector including Chinese startups Robosense and Hesai, as autonomous driving has become a hot area for investments during the past few years.
Velodyne has lost its competence in China to newly-emerged startups as it fails to lower the price of the sensors. A Robosense 16-channel unit will cost only 50% of the price for Velodyne models with the same number of channel units, Huxiu learned from a Velodyne source. Baidu, one of Velodyne’s investors and key clients, has reportedly replaced Velodyne’s 64-channel lidar sensors with Hesai’s 40-channel units.
Velodyne filed a lawsuit against Robosense and Hesai in August by saying the two startups have “threatened Velodyne and its business” by copying its flagship technology. It also asked both Chinese startups to stop selling the allegedly copied products, which include all the major lidar products listed on the Chinese companies’ sites. The case is still unsettled.
The downsizing could also be a result of the fact that Chinese automakers are losing interest in autonomous driving solutions as the commercialization progress is extremely slow. As a key element of the technology, lidar sensors also bear the brunt. “We do not have many new clients for our products recently. We will receive orders from self-driving platforms only if they are enlarging the fleets for trial rides,” a Velodyne employee told Huxiu.
The recent reshuffle in Baidu’s autonomous driving business also reflects this trend. The Chinese tech giant merged the autonomous driving unit (ADU) and the intelligent vehicle unit (IVU) under its intelligent driving group (IDG) to consolidate resources and reduce redundancy in response to lackluster market demand. After the restructuring, Baidu will put more focus on the operation and commercialization of its self-driving robotaxis in addition to other L4 solutions coming from its ADU team.
36Kr is KrASIA’s parent company.