The Lidar Giant Quanergy to Build the World’s Largest Production Base in China
Self-driving car bring unlimited business opportunities, including laser radar which has attracted a lot of players. Quanergy just completed the construction of a new plant whose annual output is about one million units, will have another big move in China in 2018.
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Today, in EmTech China Summit, Louay Eldada, Quanergy co-founder and CEO, said in an exclusive interview with DT that Quanergy will construct its largest production base in China. By the end of the year, Quanergy will have been able to produce laser radars in Sensata’s, its strategic partner, factory in Changzhou, Jiangsu Province. The initial annual production capacity is expected to be 10 million units, and in the future, it will gradually increase to hundreds of millions of units at the demand of the market. As Quanergy shifts its focus to China, China will become the world’s largest production base for lidar.
In addition, Quanergy is likely to announce a new round of financing within three months, with the main investor coming from China. Louay Eldada told DT exclusively that the new round of funding would exceed the previous round, which is expected to hit a new high. Quanergy raised $90 million in the third quarter of 2016, and the total fund raised is $135 million. Quanergy is valued at $1.59 billion.
At present, Quanergy has produced S3 ladar at the SAN Jose plant in Silicon Valley, whose annual capacity is about 1 million units. However, the United States is not a key production base in the strategic layout of Quanergy, and Eldada has made clear that China is the first choice for Quanergy in the future for large-scale production and manufacturing planning.
“Quanergy is very bullish on the Chinese market, and the Chinese market is very large and grows very fast, so the outlook is very promising,” said Eldada, “That’s why we’re expanding in China.”
Louay Eldada is optimistic about the development prospects of China’s self-driving industry and cooperation with local auto supply chain. As Chinese market and investors welcome Quanergy, the company will recruit more talents locally. It has formed a good positive cycle. For instance, Quanergy has the built the second largest office in Shanghai, which is only smaller than the Silicon Valley headquarter.
“At the end of 2018, the initial capacity design of China’s factory is 10 million, and in a few years, we hope the capacity will reach 100 million,” Eldada said in an interview. This is because Level 4 self-driving car needs 5 laser radars, and the car plant has 5 types of self-driving vehicles. The plant produces about 100,000 cars per year for each model. So, it needs 2.5 million lidar every year. If 50 car factories cooperate with us, the demand is over 100 million. At the beginning, the capacity is 10 million ladar, and then it will expand to 100 million in line with the actual market demand.
In an interview, DT asked, “Quanergy completed A round of financing in 2014, and the second round in 2016. Now it is 2018, just two years after the last financing, will there be a new financing plan this year? Also, Eldada said that Quanergy planned to expand capacity in China, so would it be possible for Quanergy to raise capital in China?”
To which Eldada replied: “you guessed right, DT. This time, I was invited to speak at EmTech China. After that, I will stay in China for a week to discuss relevant issues with potential investors.”
When asked about the amount of financing, Eldada replied, “the amount will exceed the amount we raised last time, which is $90 million. In addition, the vast majority of investors are Chinese investors, and may even be all Chinese investors.”
The market of lidar has gradually matured, and it has been transformed from the niche market of oligopoly to the battle among hundreds of companies. Eldada remains confident about the challenges of market entrants.
He said, “even if I give them two more years, it will be at least 25 years before they catch up with me, because I’ve been trying for 27 years. In order to be able to create the best products, I developed a radar product for Delphi when I was studying for my PhD. And then I went through four business startups and four core teams for today.”
In fact, Velodyne announced that it would reach 1-million-unit production capacity in 2018. Other laser radars are also working hard. This means that the global laser radar market competition will enter the white heat in 2018.