LiDAR (Light Detection and Ranging) technology is transforming industries, from autonomous driving to agriculture and urban planning. The market reflects this transformation, with the global LiDAR market projected to grow at a CAGR of 18.5% over the next decade. As the technology evolves, its cost continues to shift dramatically.
This article breaks down what can make LiDAR more affordable or more expensive and highlights how these components contribute to the overall cost of this critical sensor technology.
What Decreases the Price of LiDAR
1. Technology Maturity
As LiDAR technology has progressed, innovations in materials and manufacturing techniques have significantly lowered costs. The cost per unit has decreased by approximately 90% since 2015, with the most significant drops occurring in the automotive sector.
Earlier systems were complex and expensive to produce, but advancements in sensor components, optics, and signal processing have streamlined production and reduced overall expenses, helping manufacturers design more efficient systems at a lower cost, while contributing to LiDAR’s increasing affordability. The growing knowledge base around LiDAR has also led to faster iteration cycles, helping to further drive down costs over time.
2. Volume Production
Another major factor driving down the cost of LiDAR is economies of scale. When a technology becomes widely adopted across multiple industries, manufacturers can ramp-up production, reducing the cost per unit. The automotive industry’s growing demand for LiDAR, with projections suggesting has led to significant investments in mass production techniques. The more units produced, the cheaper each unit becomes, thus leading to a significant reduction in price over time.
BMW i7 available in mass production in Germany as of March 2024
Furthermore, global competition among manufacturers helps lower costs as companies innovate to deliver more affordable solutions. This competition benefits industries that rely on LiDAR, as it encourages faster innovation cycles and results in more affordable systems.
What Increases the Price of LiDAR
1. Performance Specifications
LiDAR systems are not one-size-fits-all. Performance specifications such as resolution, detection range, and frame rate directly affect the price. Higher-performance systems designed to detect objects over greater distances, capture finer details, or operate at faster speeds are inherently more complex and require more sophisticated components. These high-performance requirements lead to an increase in costs. For example, automotive-grade LiDAR used in autonomous vehicles must operate at long ranges (more than 200 meters) and provide high-resolution data to detect and classify objects accurately. Such performance demands higher-quality lasers, detectors, and more complex algorithms, all of which contribute to a higher price tag.
2. Application Requirements
The application for which a LiDAR system is designed also plays a critical role in determining its price. Systems used in autonomous vehicles, robotics, or advanced mapping often come with stringent performance requirements. These applications require high levels of precision, accuracy, and real-time data processing capabilities, all of which increase costs. For example, autonomous vehicle LiDARs need to operate reliably under various road conditions, including different lighting scenarios and extreme weather, while ensuring maximum safety.
On the other hand, less demanding applications, such as general surveying, may not require the same level of detail and precision, allowing for simpler, more affordable systems to be deployed.
3. Durability and Reliability
For some applications, the durability and reliability of the LiDAR system are crucial. Systems designed for use in harsh environments—such as those in the automotive, industrial, or defense sectors—need to be robust and capable of withstanding extreme temperatures, vibrations, and moisture. This need for durability leads to additional design and material considerations, including water-resistant casings, shock-absorption mechanisms, and reinforced components.
Some of the rigorous testing done on Innoviz’s LiDARs at the company’s HQ
These features add to the complexity of the system and raise manufacturing costs. The more extreme the conditions the system must endure, the higher the price will be. This is particularly relevant for automotive LiDAR systems, which must operate reliably in a range of weather conditions, from extreme heat to freezing temperatures.
4. Integration and Maintenance
The cost of integration also plays a role in determining the price of a LiDAR system. As a general rule, systems that are easier to integrate into existing platforms and infrastructure tend to be more affordable over time, even if their initial purchase price is higher. Complex integration processes, on the other hand, can require additional hardware or software and increase both setup time and labor costs.
Maintenance is another aspect that cannot be overlooked. Regular calibration, software updates, and the potential need for repairs or replacements can impact the overall cost of developing a LiDAR system. Systems designed for ease of maintenance can offer cost savings over time, though they may require a larger initial investment for unit purchasing and installation.
5. Availability and Adaptability
As previously highlighted, an often-overlooked factor in price is the system’s availability in different environmental conditions. Systems that offer advanced features to maintain accuracy in difficult conditions require higher-quality components, specialized sensors, and software capable of filtering noise from weather-related interference. These weather-resistant components add to the complexity of the system and therefore increase the overall cost.
Another critical need for LiDAR is to be adaptable to its environmental settings. For example, the ability to distinguish between temporary obstructions that prevent it from performing at maximum accuracy, such as dirt that needs removal versus water droplets that dissipate naturally. This granular diagnosis allows both drivers and autonomous systems to respond quickly and appropriately. Additionally, highly adaptable systems – such as Innoviz’s Perception Software – can assess how environmental conditions impact its range estimation. For instance, in adverse weather like heavy rain, it quantifies how much the LiDAR’s ability to measure distances is affected, ensuring more reliable performance in challenging conditions. This added feature also contributes to the product’s final cost.
Conclusion
As LiDAR technology continues to evolve, its pricing will reflect a balance between innovation and market demand. While advancements in technology and mass production have driven costs down, the need for high-performance, durable systems in demanding applications ensures that premium models will remain at a higher price point. Understanding these pricing factors helps industries and consumers make informed decisions when selecting the LiDAR provider fit for their needs, whether prioritizing affordability or performance. Ultimately, a LiDAR’s increasing affordability will make it more accessible across a broader range of applications and help to spur greater adoption of autonomous vehicles.
Innoviz is promoting LiDAR adoption with advanced innovative hardware and software designed to meet the growing demand for high-resolution, faster data processing in autonomous systems. Learn more about InnovizTwo™ LiDAR or contact our Sales team for additional information.