The future of Lidar Technology is interesting because it is a bread-and-butter tech for future automated vehicles. However, what’s particularly interesting is that the barriers to entry are not particularly high. Let’s break it down:
Lidar hardware is replicable, and the inclusion of costly components, such as laser scanners, navigation systems, and high-resolution 3D cameras, drove early costs up; however, Chinese firms like Hesai have solved this issue. Hesai shipped its millionth sensor in 2025 and is now winning deals with Mercedes outside of China, proof that commodity sensors are already a race to the bottom for Western players.
The real play with Lidar is the software the companies have. Let’s take AEVA, for example, they have made advancements in range and velocity with their FMCW physics. But this alone is not a guarantee that a company like Mercedes or Tesla won’t come in and hit it out the park with their own software at a fraction of the cost.
Lidar stocks right now need to be treated as high risk, and short-term plays. We have the benefit of a major sector rotation, but ultimately, money tends to trickle out of these plays and concentrate more into names that have solid business models. The best thing to do is always find the stocks with strongests moats and concentrate the bulk of your portfolio there.
These smaller-cap stocks are good to take a punt when the market is hot, but to hold long-term is always very high risk. Because their moats tend to limit what their future earning capacities can become, given the barriers to entry are not impossibly high, and can be replicated over a short enough time frame.
Example: Early LiDAR tech used certain laser tech that cost $75,000; that same tech has now been produced at a 99% reduced cost of around $50 - extremely drastic cost reduction.
Names to look out for in Lidar Sector:
$AEVA, $INVZ and $OUST. I’m thinking to invest 5% of my portfolio in $AEVA and seeing where it goes (Not Financial Advice).
Yours forever, Heavens Banker…