Earnings Call Transcript
Hesai Group (HSAI)
Earnings Call Transcript - HSAI Q4 2023
Operator, Operator
Hello, everyone. Thank you for joining Hesai Group's Fourth Quarter and Full Year 2023 Earnings Conference Call. I will now hand the call over to our first speaker today, Yuanting Shi, the Investor Relations Director. Please proceed.
Yuanting Shi, Investor Relations Director
Thank you, operator. Hello, everyone. Thank you for joining Hesai Group's fourth quarter and full year 2023 earnings conference call. Our earnings release is now available on our IR website at investor.hesaitech.com, as well as via newswire services. Today, you will hear from our CEO, Dr. David Li, who will start the call with an overview of our recent updates. Next, our Global CFO, Mr. Louis Hsieh, will address our financial results before we open the call for questions. Before we continue, I refer you to the safe harbor statement in our earnings press release, which applies to this call, as we will make forward-looking statements. Please also note that the company will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release and SEC filings. With that, I'm pleased to turn over the call to our CEO, Dr. David Li. David, please go ahead.
David Li, CEO
Thank you, Yuanting, and thank you, everyone, for joining our call today. 2023 was a landmark year for Hesai. We not only continued to substantially outperform our LiDAR peers, but also extended our leading market share with stellar full year results across revenues, total shipments and the blended gross margin, all of which surpassed our previous expectations. Furthermore, we created a virtuous cycle of cost control and economies of scale and achieved multiple significant milestones on our path to profitability. For instance, our operating cash flow for the full year of 2023 reached positive territory, a feat unparalleled within the industry. These remarkable accomplishments reflect our unwavering commitment to sustainable and responsible growth to our mission of reducing accidents, saving lives and making global transportation safer for everyone. Let's delve into our fourth quarter business update. On the domestic side, we achieved a significant milestone in the fourth quarter by expanding our collaboration with one of the world's largest EV manufacturers based in China. Our extended cooperation encompasses another fresh lineup of vehicle models that are set to debut starting 2024. In addition, we were recently selected by Li Auto as the exclusive LiDAR provider for their MEGA MPV platform. Li Auto also may add our LiDAR as standard equipment on their popular L7 and L8 Pro versions, immediately adding hundreds of thousands of LiDAR units to Hesai's growing order book. We also recently forged new strategic partnerships with Great Wall Motor, one of China's largest auto brands, and Leapmotor, who has recently formed a joint venture with Stellantis to include joint research endeavors and the integration of a variety of LiDARs into their vehicle models with SOP scheduled to commence in 2024. We anticipate that our partnership with these prominent domestic OEMs will soon deepen even further. The EV revolution is in full swing, particularly in China. In 2023, the estimated NOA penetration rate in China stood at 10%. It is projected to increase to over 20% by 2025. OEMs are eager to distinguish themselves through intelligent NOA functions. For instance, as I just mentioned, Li Auto's L8 and L7 Pro models now feature our LiDAR as a standard configuration with an urban NOA function, which navigates from urban point A to point B with minimal driver intervention. Additionally, LiDAR is increasingly recognized as an essential safety feature just like airbags. Consequently, LiDAR has become a prerequisite for safety-cautious consumers seeking the highest safety standards. Moreover, as the industry advances towards L2+ and L3 autonomous driving systems, a transformative trend is emerging with ADAS systems equipped with LiDAR configurations making their way into passenger cars in a growing range of price categories. This evolution began with vehicles priced in the RMB 400,000 range in 2022 to RMB 300,000 range in 2023 and now has extended to models priced near RMB 150,000 range in 2024, as illustrated by the recent launch of Leapmotor's latest EV model. The widening accessibility of LiDAR technology across affordable price categories represents a transformative phenomenon for our industry, unveiling a mass market opportunity 10x to 20x larger than the previously served premium sector only. The catalyst signal is a key inflection point for ADAS and LiDAR adoption in China and the rest of the world. China has maintained its global leadership in EV production and sales for 9 consecutive years, commanding a majority market share exceeding 60% worldwide. Meanwhile, Chinese OEMs commenced mass EV production in 2021 and 2022, in contrast to the global OEM timeline, which mass EV production is anticipated to begin around 2025 and 2026. In other words, the China EV industry is approximately 5 years ahead of the global curve. We are in the right place at just the right time to capture the opportunity with cumulative shipments surpassing 300,000 LiDAR units by the end of 2023. Hesai has not only realized financial advantages through economies of scale but also significant technological expertise and a profound understanding of mass production and a quality management system. This serves as compelling evidence of our established proficiency for global OEMs, particularly those who may be more conservative in vendor selection due to past unsuccessful attempts with our U.S. and European peers. Armed with this strength, we are well-positioned to compete successfully on a global stage. Let me walk you through some of the specifics. First, Hesai's pioneering R&D initiatives are defining the LiDAR industry's product development trajectory. In January 2024, we unveiled AT512, our NextGen ultra-long-range flagship ADAS LiDAR scheduled for mass production in 2025. This cutting-edge technology is establishing new industry benchmarks, boasting the highest available detection range and resolution. It not only outperforms the industry's competitors by a significant degree but also challenges long-standing misconceptions about technical bottlenecks, including the notion that only LiDAR designed with 1550-nanometer wavelength can detect beyond 250 meters. Standing out with industry-leading performance across every key metric, AT512 greatly enhances the vehicle's perception capability by detecting objects at least twice as far away as competing LiDARs in its category, giving the intelligent driving system over 40% more reaction time to make safer decisions. As the CEO of a leading global OEM declared, when it comes to safety, the second best LiDAR isn't good enough. We firmly believe that investing in the development of the best LiDAR products that not only meet but exceed the dynamic demand of the market provides substantial long-term benefits to society, as well as to our company and stakeholders. We are seeing various new LiDAR debuts at the 2024 CES event in Las Vegas reflect a technological convergence towards our innovation direction. Several competitors, who have traditionally emphasized the use of the 1550-nanometer lasers or MEMS technologies are now unveiling products based on rotating mirror scanning systems for the 905-nanometer laser. This underscores a growing recognition of the benefits our technologies offer in terms of cost, performance, and reliability. Our leadership and innovation were recognized at the CES event, where our groundbreaking ultra-thin long-range in-cabin LiDAR ET25 won the prestigious 2024 Innovation Award at CES. Second, we firmly believe that mass production at scale is the only way to ensure sustained operation, effectively manage cost, and cultivate enduring trust with our customers. As of now, we operate 2 major factories, our Maxwell center in Shanghai, focusing on new product R&D and testing and our Hertz Center in Hangzhou, a facility dedicated to mass production, boasting an unprecedented automation rate of over 90%, unparalleled in the global LiDAR industry. By the end of 2023, we achieved an annualized production run rate of over 800,000 units, a figure we project to rise by the end of 2024. Meanwhile, we expect to accumulate and ship over 2 million LiDAR units to the market by the end of 2025. Third, beyond manufacturing capability, stable quality and reliability have emerged as crucial indicators for OEMs when considering the mass installation of LiDAR systems. LiDAR systems require the sophisticated integration of mechanics and electronics, as such, quality and precision are paramount. Amid intense competition and widespread adoption of ADAS systems, LiDAR products have become the primary concern for EV manufacturers. From an OEM's perspective, there's no better indicator of our products' superior quality and reliability than their outstanding long-term performance in real-life road conditions. Drawing upon these assets and know-how, we are confident in our ability to expand our domestic leadership to a global scale. We are beyond thrilled to announce that as of now, we have won over 60 ADAS series production EV models from 16 major OEMs and Tier 1 suppliers worldwide. We've been selected by 2 top global automotive OEMs for their new EV series production programs, and there are more. Our global RFI/RFQ lineup has expanded to include a total of 13 with 9 leading global OEMs from North America and Europe, and we're adding Asia ex-China to the mix. These major accomplishments mark a promising start to our global ADAS journey. Stay tuned for the updates. As we look ahead, the road ahead is filled with opportunity to broaden our impact. Our achievements thus far are just the beginning. With market-leading LiDAR technology and strategic partnerships worldwide, we are poised to capitalize on the evolution of intelligent driving, reducing accidents, saving lives, and creating a safer global transportation system. I'll now turn the call over to Louis to share more details on our financial performance and outlook. Louis, please go ahead.
Louis Hsieh, CFO
Thank you, David, and hello, everyone. Let's go through our operating and financial figures for the fourth quarter and full year 2023. To be mindful of the length of our earnings call today, I encourage listeners to refer to the fourth quarter earnings release for further details. In the fourth quarter and full year of 2023, we achieved a host of remarkable milestones that underscore our leadership in the global LiDAR industry. In Q4, our net revenues exceeded RMB 561 million, an increase of 37.1% year-over-year and 25.9% sequentially. Quarterly total LiDAR shipments reached 87,736 units, an increase of 84.6% year-over-year and 84.9% sequentially. Our fourth quarter 2023 shipments alone surpassed our combined total for the full year 2022. Even more exciting, for full year 2023, our net revenues increased by 56.1% year-over-year to a new high of RMB 1.877 billion with a full year blended gross margin of 35.2%, above the top end of our guidance range of 30% to 35%. Our 2023 total LiDAR shipments topped 222,000, up 176% year-over-year. Meanwhile, our cumulative LiDAR shipments exceeded 300,000 units by the end of 2023, making Hesai the first automotive LiDAR company worldwide to reach this mark. We remain focused on enhancing revenue scalability and cost efficiency and delivered positive operating cash flow for the first year, underscoring our clear path to profitability. Heartened by these stellar results, we have set ambitious targets for the first quarter and full year of 2024. We anticipate revenues in the range of RMB 320 million to RMB 350 million and total shipments to exceed 50,000 units in the first quarter. This muted guidance is attributable to 2 main factors: first, a significant slowdown in our robotaxi business compared to last year. It is crucial to note that given the reasonable price discount granted to a certain large robotaxi customer, the suspension of deliveries to that customer will not hinder our ability to meet our gross margin target. Despite this setback, demand for the rest of our AM line LiDAR products remains strong. Second, the first quarter of the year traditionally marks the slow season for China's automotive industry. Due to the New Year's holiday, both OEMs and suppliers strategically pulled forward production and deliveries to the fourth quarter of the preceding year. As ADAS LiDAR shipments accelerate, our revenue mix will transition from autonomous mobility-led, including robotaxi and industrial robotics to ADAS-led in 2024. ADAS revenues are projected to increase from below 40% of our revenues in 2023 to approximately 60% in 2024. The first quarter of 2024 will be a transitional quarter with steady growth in robotics and strong growth in ADAS accompanied by a drop in robotaxi contribution. Thereafter, our outlook for 2024 is highly optimistic with a significant uptick in revenues and shipments expected in the second quarter of 2024. This optimism is bolstered by the addition of 13 SOP vehicle models and 6 SOP ADAS OEMs in the second quarter alone. We believe this will lead to an approximate 3x quarter-over-quarter increase in total LiDAR shipments or about 150,000 units in the second quarter of 2024. By the end of Q2 2024, we anticipate SOP for 26 vehicle models from 12 ADAS OEMs. We are poised for an even greater surge in shipment figures in the second half of 2024. We expect over 200,000 LiDAR shipments per quarter in the second half of 2024, as we expect 12 OEMs representing approximately 40 vehicle models to SOP by the end of this year. These projections are based on current customer forecasts and may be subject to change. Our revenue guidance for the full year 2024 stands firm in the range of USD 400 million to USD 450 million, an increase of 50% to 70% year-over-year. Meanwhile, we expect to maintain a blended gross margin within the 30% to 35% range for the full year of 2024, a testament to our robust cost management systems and growing economies of scale. Furthermore, we expect our commitment to operational excellence and prudent expense management strategies to help us achieve profitability in the fourth quarter of 2024. To wrap up, Hesai is defined by our unwavering commitment to reducing traffic accidents, saving lives and making global transportation safer for everyone. We are firmly committed to delivering on our promise to our customers, partners, and shareholders. This concludes our prepared remarks for today. Operator, we are now ready to take questions.
Operator, Operator
Your first question comes from Cindy Huang with Morgan Stanley.
Cindy Huang, Analyst
Congratulations on splendid results. So my first question is regarding the dispute with the U.S. DoD. Is there any update on the development? And will there be any impact in terms of working with U.S. OEMs?
Louis Hsieh, CFO
Thank you, Cindy. This is Louis. I'll take that first, and then David can chime in. Yes, for the 1260, as we had said in our statement, after January 31st, when we were put on the DoD list, we don't know why. So we're trying to ascertain that. As we've said very clearly in the past to our investors and to the whole world, we do not work with the Chinese military. Our LiDARs cannot do surveillance, do not store data, and we are only for civilian use and commercial use only. So we made that very, very clear. So we have now asked the DoD for information as to why we're on the list. We have moved forward with the legal proceedings. But at this point, we don't want to comment further given the sensitivity of litigation, but that's where it stands. As far as effects on U.S. OEMs, it certainly has a reputational effect, and it has impacted us negatively. So we continue to monitor it. We're still in discussions with our OEM customers, but it's certainly not something that we want to happen, and we will do everything we can to get removed from that list. We don't believe it's justified. David, do you want anything else?
David Li, CEO
Yes. Thank you, Louis. I think Louis has made our position very clear. And we are not a military company, and those accusations are false. So I will not repeat that. I think what I'll try to add are 2 things: First, it is true that it's becoming an increasing concern, especially for U.S. OEMs, and geopolitics is becoming part of the equation, and it is hurting us. Of course, this is not a company-specific issue; it's becoming a global issue that any U.S. OEMs will have concerns about using parts directly from China. So that's why we are working very diligently with them, hopefully, to resolve the issue. On top of that, what I'd like to comment is that it is also becoming clear that because geopolitics is going to become an issue, and remember, those European and American OEMs, the premium brands, they also have significant market sizes in China, and sometimes up to 50%. For those cars, we become a preferred vendor because they like us anyways, but they definitely want to use us or a Chinese brand in China for obvious reasons. So on the flip side, it is not great that geopolitics is becoming an issue across the border, and it is impacting our U.S. business, for sure. But they also build cars in China, and it's a significant volume. For that, we don't have any problems, and that is not a concern. So that is also part of the equation that I think is important to us.
Louis Hsieh, CFO
Did that answer your question, Cindy?
Cindy Huang, Analyst
Thank you, David. And my second question is related to our shipment forecast. The new model launches in the pipeline and demand and model sales are super volatile. Does Hesai apply any adjustment to OEMs' order forecast? And how would you respond to a rapid order change?
Louis Hsieh, CFO
You mean order change for the positive or the negative?
Cindy Huang, Analyst
Both ways.
Louis Hsieh, CFO
Okay. I believe you all have known me for many years; I always include a discount in our forecasts. Therefore, our actual orders are significantly higher than the figures we provide. This is already accounted for. Regarding potential upside surprises, our manufacturing facility is capable of meeting almost any level of demand due to our efficiency and automation, as well as our access to raw materials. Upside is certainly positive. We are very pleased to have teamed up with Li Auto, where the MEGA standard equipment and LiDARs were recently launched on their MPV. Their new L7 and L8 Pro models will now include Hesai LiDARs as standard equipment, which was previously reserved for the Max version. This change alone could increase the take rate from around 30% to possibly 60% to 80%, translating to hundreds of thousands of orders over the next few years. Thus, we are well-prepared for any potential upside surprises. Additionally, we can manage any downside surprises because we factor in discounts for our LiDAR delivery numbers.
David Li, CEO
So again, let me talk about this topic from a technical standpoint. So one thing worth noting is that we actually built a standard product. We always call that AT128. It is not specific to any customers because it's the same LiDAR. The only difference is some of the communication software, which is a minimal change. It means that, yes, you're absolutely right. There are ups and downs across some 40, 50 car models that we're expecting to ship and it's impossible to predict 6 months down the road. But if you look at the aggregate effect, it is not very difficult to understand how many of the units will be needed across the entire especially price category, right? What we are happy to see is that it used to be more in the premium category. And now it's penetrating down to the RMB 150,000 level, which is a much bigger market, given that we have many car models now in a more cheaper part of the bracket. And we're actually more confident that with the blended volume, it will be a very robust and steadily growing volume this year.
Cindy Huang, Analyst
That's very clear. And can I follow up with one more question on next-generation product? So how do we bridge the gap, the transition from AT128 to AT512?
David Li, CEO
Yes. This is a great question. Thank you. So I think there are 2 parts of the strategy. First, if you remember our overarching thesis has always been a simple term called Moore's Law. If you look at it what Moore's Law does is that there are actually 2 ways of using Moore's Law. One way is that you try to keep the price range. It's like your CPU, right? But then your performance almost doubles every 18 months or so. So that's one of the ways we're doing. Essentially, this is the path, the AT512 is taking in the sense that AT512 will always stay at the range of the AT128 on the price. But as you can already tell, it is 8x more resolution and roughly 50% more on the range at a similar price range. So this is exactly what Moore's Law did to a lot of the consumer electronics, right? Your CPU didn't just have its price over time, right? It becomes 0, right. Of course, that happens. Having said that, we also recognize that for LiDARs to be widely deployed to more vehicles, not just hundreds of thousands of them, but tens of millions of them, the mass market needs a cheaper LiDAR, and that's possible too via Moore's Law. Of course, if we try to build a more affordable version of it, it wouldn't have the full performance of the AT512. It will still be reasonably good, especially better than AT128, but it could be cheaper over time if you don't need the full performance of AT512. That is the direction we're looking at. We're not quite there yet. And we will release information as they become available, but this will definitely be another trend, especially for the Chinese market that people want, and we know we have a technology platform to support that.
Operator, Operator
Your next question comes from Tina Hou with Goldman Sachs.
Tina Hou, Analyst
Congratulations on the results and the strong gross margin. I have a question. David, you mentioned that by 2025, you will cumulatively ship 2 million LIDARs, which equates to about 1.7 million in 2024 and 2025 combined. I'm curious if that figure is a conservative estimate, like a bear-case scenario, or if it represents more of a base-case scenario.
Louis Hsieh, CFO
Thank you, Tina. I'll take that since given it's a numbers question. I think the 2 million cumulative figure is realistic and probably leaning towards the bear side. So I think, as David mentioned in his remarks, the demand for LiDAR as it moves down to the affordable car midrange and lower range, the adoption of LiDAR in new EV vehicles is just going to explode. I think as there was a holy grail mentioned in 2020 by all the LiDAR makers in the world, reaching 1 million units by 2025, I believe Hesai will be the only company to actually do so by next year. So yes, if you add the 300,000 we've done now, 600,000 or 700,000 for this year, and we expect to ship over 1 million units in 2025. And that's partly because of what David discussed, a market where we have high-end AT512 and we have lower-end versions for the mass market cars that are more affordable. Those 2 together, you'll have to wait to hear the details, but those 2 together will generate expected units of well over 1 million for 2025.
David Li, CEO
I also believe this could be on the more conservative side for another reason. The consumer market, especially the car market in China, moves very fast. Everyone is observing each other and what they do, and they try to incorporate something into their car models that will be rolled out in the next 18 months. Today's projection is definitely based on the numbers we already have. If you closely follow the media, especially in the past month or two, everyone is mentioning LiDAR. Looking at all the car releases, they are now only mentioning a few specific things. One of them is LiDAR, another is the 800-volt charging, and I can't remember the third one. I think it's one of the top three things mentioned across every car release. Many of the OEMs are now claiming they will make it standard because this has become the benchmark for the level of intelligent driving, and that's not a competition we're losing. I believe this snowball effect will start, and it is ramping up quickly. That's why I consider the current best estimate from the bottom-up numbers could be on the conservative side.
Louis Hsieh, CFO
Yes, as we enter this year, our LiDAR technology will become the standard for several leading OEMs globally. This means it will be significant in volume, and the platform will be integrated into a new range of electric vehicles, regardless of whether they are entry-level or premium models, although they may use different LiDAR systems all sourced from Hesai. This is why David mentioned potential growth; the figures could be much larger, particularly if our technology becomes standard equipment across all EV models, which I expect will occur within the next few years with many major automakers.
David Li, CEO
Yes. The third one, the competing factor is like aerodynamics coefficient. Yes, I remember. Yes.
Tina Hou, Analyst
That's really helpful and comprehensive. Yes, yes. And I do agree that it's definitely one of the top, if not the top functions that gets mentioned by the OEMs recently. And then can I have a follow-up question in terms of the OpEx? So wondering what is our SG&A and R&D as well as CapEx budget for 2024? And also, do we have like an estimated time of non-GAAP net profit breakeven?
Louis Hsieh, CFO
OpEx was higher in 2023 due to significant expansion activities. We built the Hertz Center and the Maxwell R&D Innovation Center, and launched several new ADAS programs. After a series of layoffs in 2022, we ended 2023 with just over 1,100 employees, which we expect to stabilize. Hiring in R&D and G&A will not see much increase, while sales and marketing will grow. Overall, the increase in OpEx will be significantly lower than the increase in revenue. As long as we maintain a gross margin of 30% to 35%, if we achieve between $550 million and $600 million in revenue, we will be profitable on a GAAP basis. On a non-GAAP basis, we anticipate being very close to breakeven or potentially achieving it in the latter half of this year, as volumes reach over 200,000 per quarter. For the fourth quarter of 2024, we aim to be GAAP profitable, recognizing that Q1 2025 is typically our slowest quarter. However, we expect to be GAAP profitable in 2025.
Operator, Operator
Your next question comes from Jessie Lo with Bank of America.
Jessie Lo, Analyst
My first question will be related to our shipment orders. So apart from Li Auto, could you also shed some light on who will be the top other 4 clients? And how would the volume look like in 2024?
David Li, CEO
Yes. I think we don't have the right to mention their names. But Li Auto is roughly going to be more than half of our total volume, but the rest of the top 5 customers, they will each take at least 20,000 units to 30,000 units. And I think you probably will be able to figure out the names as some of them have already been disclosed, but we won't be able to associate those numbers directly with them. So essentially, this is roughly half from Li Auto and half from the rest of the top players. Yes. Jessie, without disclosing names, the top 5 automakers in China will start shipping with our LiDAR this year. That's why the numbers go up. Okay.
Jessie Lo, Analyst
My second question is about the adjustment or negotiation of the average selling price with the OEMs. Given the revenue guidance of USD 400 million to USD 450 million, along with our shipment or delivery expectations, it seems that the ADAS LiDAR average selling price decrease will not reach 10%. Could you provide some details on how you're engaging with our clients regarding the average selling price? Additionally, we are heavily focused on Li Auto, and we are also expecting increased shipments of the FT series.
Louis Hsieh, CFO
Yes, most of the product is in the AT series for ADAS. It's negotiated by contract, and typically, the price remains relatively stable throughout the year. The ASP decline for 2024 is more than 10%, actually closer to 20%. However, our costs are decreasing even faster, allowing us to maintain margins on a blended basis. We still have a high gross margin business with robotaxi and robotics, so our gross margin remains strong at 30% to 35%. We can absorb negotiated price reductions better than anyone else in the market, giving us the flexibility to lower prices, even if we prefer not to. The price decrease is expected to be a bit higher than 10%.
Jessie Lo, Analyst
And finally, just follow up...
David Li, CEO
I want to quickly add my comments on this. Remember, this is also due to a strong effect of economies of scale. It is true that the average selling price is declining probably faster than we expected. But more importantly, the total volume growth is much faster. You need to combine those factors to understand the situation.
Louis Hsieh, CFO
I mean, Jessie, you can just look at Q4, and you can see that once we start manufacturing in high volume, the economies of scale really kicks in on the gross margin.
Jessie Lo, Analyst
So also, I want to follow up on top of that fourth quarter gross margin, so previously, we were still doing the transition. So how was that transition on the AT series? And then are we having any further product or cost upgrade or improvement in 2024?
David Li, CEO
Sorry, can you...
Louis Hsieh, CFO
The transition from AT is smooth, right? No issues, right?
David Li, CEO
Yes, that is nearing completion and it is a solid upgrade. It has undergone more validation than previous versions, making the transition very smooth.
Louis Hsieh, CFO
I believe there are a few cars, just one or two this year, that were still shipped with the old AT because it was validated last year, but those numbers are very low. So I expect the new AT will certainly account for 95% to 97% of the...
David Li, CEO
And it has been agreed that we will finish the transition very smoothly. So yes, I think this is a very smooth transition.
Louis Hsieh, CFO
And FT is rolling out. The numbers aren't huge yet, but it is getting some traction. And then, of course, ET comes out next year in SOP form. And also AT512.
Operator, Operator
Your next question comes from Bin Wang with Deutsche Bank.
Bin Wang, Analyst
I have two questions. The first concerns costs. What is your volume forecast for this year's impact and next year's volume? The second question pertains to the gross margin in the fourth quarter, which was significantly high despite a deteriorating product mix that included more ADAS LiDAR. How did you achieve a margin increase of over 10 percentage points, and what changes occurred in the first quarter, considering the product mix appears to be similar in the upcoming quarter?
Louis Hsieh, CFO
Thank you, Wang Bin. I think we don't discuss individual customers.
David Li, CEO
Yes. I think it's important to note that we cannot comment on specific individual customers without their consent. However, you are correct that we are observing a significant slowdown in the robotaxi market. It is challenging to determine whether this is due to technical issues or economic factors, but the decline and slowdown in some orders is accurate. On the positive side, we are witnessing better momentum on the ADAS front, particularly in terms of penetration rates and unit shipments, which are exceeding our expectations along with new car models being introduced. These developments balance each other out, allowing us to sustain strong growth for the year. Again, we are not strictly a robotaxi LiDAR company nor solely an ADAS LiDAR company; we are a LiDAR company with robust semiconductor and manufacturing capabilities. It's true that during the rapid growth of the robotaxi sector, we captured a significant portion of the market. Now that it is slowing down, we can continue to concentrate on the much faster-growing segment, which is ADAS.
Louis Hsieh, CFO
So Wang Bin, when we forecasted our revenue for this year at $400 million to $450 million, our ADAS LiDAR count was around 400,000. It has now increased to over 600,000. I kept the revenue estimate at $400 million to $450 million to remain conservative due to the slowdown in robotaxi, so we did not raise the number.
David Li, CEO
Yes.
Louis Hsieh, CFO
But that shows you that because David said it kind of evens itself out. And as your question on the gross margin for Q4, you have to remember, that's our busiest quarter, and that's at a time when we still had the higher pricing from 2023.
David Li, CEO
And also, on top of it, so the slowdown of the robotaxi really is starting this year. So last Q4 was still a good quarter. So we do expect this year not to be able to ship high gross margin large volume robotaxi LiDARs. I think that has been already factored in and disclosed to everyone. But I think last Q4 was still very strong for both of the segments.
Louis Hsieh, CFO
Yes. I believe the robotics sector continues to grow, with the market expected to increase by 30% to 40% this year. Additionally, the Advanced Driver Assistance Systems (ADAS) market is projected to grow by over 100% this year. Overall, we anticipate strong revenue growth in the range of 50% to 70% year-over-year. Furthermore, shipment numbers are consistently rising, having increased from 400,000 to 600,000 and continuing to climb. Did that address both your questions, Wang Bin?
Operator, Operator
Your next question comes from an unidentified source.
Unidentified Analyst, Analyst
Can you hear my voice?
Louis Hsieh, CFO
Yes. Go ahead.
Unidentified Analyst, Analyst
So my first question is about robotaxi and robots. We noticed that the demand for robotaxi has slowed down perhaps the humanoid robots are developing really fast this year. Could you give us guidance for the shipment for the robotaxi and robots this year? Also, do we have any intent to launch a specific LiDAR for the humanoid robots in the future?
David Li, CEO
The second question is a bit of a surprise because it seems to relate to a different industry. This is an exciting field, and at some point, it will require a significant number of LiDARs. Regarding your question about building a humanoid robot this year, as far as I am aware, we do not have concrete plans for constructing the robot at this moment. However, it could utilize various types of our LiDAR technology, and I hope this clarifies your inquiry.
Louis Hsieh, CFO
In response to your first question regarding the number of units for robotaxi and robotics, the total units for PandarXT and QT last year was about 27,000. We anticipate that this number will continue to rise. Overall, it's not decreasing. However, due to price reductions and a potential shift towards lower-priced Pandar or XT products, revenue growth may be limited. While robotics will see growth, robotaxi numbers are projected to decline year-over-year. Nonetheless, the actual number of units is expected to increase.
Unidentified Analyst, Analyst
Okay. May I have another question? I want to ask about the cooperation with the global OEM. Where should we expect your ramp-up in the sales from the global OEMs' orders?
Louis Hsieh, CFO
Depending on which one, but it's a substantial volume. And so, we don't have the specific numbers to announce yet. It is slower than the rest of the China EV market.
David Li, CEO
The two that are mentioned in our earnings release will be in 2025, not 2024.
Operator, Operator
Your next question comes from Michelle Jing with Haitong International.
Michelle Jing, Analyst
I have a few questions. First, regarding your estimation for ADAS shipments, do you have an idea about the total ADAS shipments for the industry in 2024?
Louis Hsieh, CFO
About the whole industry for ADAS shipments?
David Li, CEO
Oh, the entire market.
Louis Hsieh, CFO
Yes. The market.
Michelle Jing, Analyst
Yes.
David Li, CEO
I think you probably have to refer to the third-party reports because we don't have the full projection for some of the OEMs that we don't directly work with. My very rough estimate is probably a little more than double our volume. That's my guess.
Louis Hsieh, CFO
We are likely very close to 50% of the global market, if not slightly more. If we look at it without considering geography, I believe that China will probably exceed 50% of the global market in the coming years. Given our position as the market leader in China, we should be close to or even above 50% of the global market for ADAS LiDAR, although there are other categories like ADAS automotive.
Michelle Jing, Analyst
And my second question would be for products. So, for the AT512, do you guys have any orders yet? Did you receive any orders?
David Li, CEO
That will be the future Level 3 products for the global OEMs. We have openly disclosed that we have a significant number of RFIs and RFQs, with some in very late stages. There has been strong interest in the 512, but only samples are currently available. Therefore, orders won't come in until those samples are evaluated and contracts are negotiated. Typically, orders will arrive either the year before or in the same year they actually ship as firm orders.
Operator, Operator
Your next question comes from an unidentified source.
Unidentified Analyst, Analyst
So I have some questions regarding demand side. So apart from, have you observed any demand from other OEMs for equipping vehicles priced below RMB 200,000 with LiDAR systems? And how much longer do you anticipate it would take for LiDAR products to further penetrate the market for vehicles under this price point? And also, with the projection that LiDAR sales will exceed 1 million units by 2025, is it taking into account that this volume will include sales driven by this category of vehicles and besides Linkpower?
David Li, CEO
I didn't fully understand the last question, but I'll address the first one first. Yes, we have several models in the pipeline that will be priced at or below RMB 200,000. We're seeing an increasing number of requests to consider including LiDAR as standard in more car models within that price range. This creates a snowball effect. The Chinese market is always evolving, and when customers see others doing it, they ask OEMs why they can't have the same features. This leads them to question whether cars without LiDAR are inferior in terms of intelligent driving compared to competitors. This demand is growing rapidly, and we are already witnessing it. For the negotiations we have scheduled for next year, we expect delivery will occur in 2025 and 2026. As for the second question, I didn’t quite catch...
Louis Hsieh, CFO
On the second question, remember that globally, electric vehicles in China exceeded 8 million last year, and that number is still rising. It's reasonable to anticipate it reaching 10 million or 12 million this year and next. As we mentioned earlier, the adoption of intelligent driving systems at Level 2+ and 3 will continue to increase, even in mass-market vehicles priced below RMB 200,000. Additionally, as David noted, there is a growing demand for intelligent driving systems equipped with LiDAR. We have already discussed this with original equipment manufacturers, who are likely to standardize this technology across all their EVs. These two trends will create a momentum that could easily push us past 1 million units by 2025, based on our ongoing conversations with OEMs.
David Li, CEO
Yes. So I think a year ago, this was a much more heated topic when everyone was saying that we know the competition is difficult in China. Everyone is cutting costs. What makes you think that people will take more LiDARs as opposed to fewer? And my answer stands; if price is the only differentiating factor people consider, we should all go back to the past and make a car with no ADAS, right? Why would we even talk about ADAS at all? The reason is that just because of competition, they need to use the best for the buck. So a buck is a buck, but the demand is defined differently based on the market. It used to be focused on the big entertainment screen, now it's really the charging and the LiDAR. So everyone is asking about it, then this becomes demand for the buck. So that's why I think it's becoming more popular that people realize with this little investment, your vehicle can stand out or at least not fall behind. So that's the rationale.
Louis Hsieh, CFO
And it's all similar to airbags. It's all about safety and actually making your drive more pleasurable, where the car helps take the stress off having to be full attention on the road all the time. So it's safety, convenience, and driving enjoyment that's pushing the LiDAR development.
Operator, Operator
Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.
Yuanting Shi, Investor Relations Director
Thank you once again for joining us today. If you have further questions, please feel free to contact our IR team. This concludes today's call, and we look forward to speaking to you again next quarter. Thank you, and goodbye.
Operator, Operator
This concludes today's conference call. You may now disconnect your lines. Thank you.