Key Takeaways
Hesai Group is moving to unify lidar and camera functions with a single chip, a direct challenge to existing machine perception architectures, as it confirmed a strategic supply deal with Mercedes-Benz for its Level 3 autonomous driving programs. The company’s new Picasso, a 6D full-color SPAD-SoC, aims to solve long-standing edge cases where vision-based systems struggle by fusing RGB color and precise 3D geometry at the chip level.
"2026 marks a transformative chapter for us as we initiate a strategic paradigm shift evolving from spatial perception to spatial intelligence," Yifan Li, Chief Executive Officer of Hesai Group, said during the company’s earnings call. "For the first time, we are delivering a unified perception stack in a single chip, bringing both worlds together and taking a real leap in how machines perceive and understand the physical world."
The announcement came as Hesai reported first-quarter net revenue of RMB 681 million ($99 million), a 30 percent increase from a year earlier, marking its eighth consecutive quarter of year-over-year growth. Total lidar shipments exceeded 471,000 units. The company posted a GAAP net income of RMB 18 million and reaffirmed its full-year shipment guidance of 3 million to 3.5 million units. To reflect its new strategy, Hesai created a "Strategic Growth Initiatives" (SGI) segment which recorded an operating loss of RMB 51 million on R&D investments, while the core lidar business generated an operating profit of RMB 42 million.
The strategic shift is aimed at capturing more value as automakers transition to Level 3 autonomy, which drives sensor content per vehicle from roughly $200 to between $350 and $1,000. Hesai’s Picasso-powered ETX lidar supports up to 4,320 channels with a 600-meter range, a significant step-up in performance designed to justify higher content value. This chip-level fusion differentiates Hesai from competitors who package separate camera and lidar units, a potentially more integrated and cost-effective solution for automakers like Mercedes-Benz, Li Auto, and Xiaomi.
The new supply agreement with Mercedes-Benz will support programs in Europe and China, with production handled by Hesai’s new Galileo manufacturing center in Thailand. The company is also expanding its global footprint through partnerships with Chinese automakers expanding overseas and joint ventures, securing a design win with GAC Toyota for its 2026 bZ3X model, marking an entry into the Japanese auto ecosystem.
Beyond its core lidar business, Hesai is investing heavily in its SGI segment to build what it calls the "eyes and muscles of physical AI." This includes Kosmo, an AI-integrated device for generating photorealistic 3D environments, and a new robotic actuation module business. CFO Peng Fan stated that the SGI segment is expected to generate approximately RMB 100 million in revenue in 2026, with a goal to scale to around RMB 500 million by 2027.
The company believes its deep experience in developing automotive-grade motors and encoders for its lidar systems provides a natural pathway into the robotic actuator market. While few details were disclosed, management noted that key performance metrics for its actuators are already reaching among the industry's highest levels, positioning Hesai to supply components for the growing humanoid robotics market, a sector targeted by companies like Nvidia and Tesla.
This article is for informational purposes only and does not constitute investment advice.
