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Self-Driving Car Development Crashes into Supply Shortages

Cars that drive themselves are emerging as one of the hottest selling points in the car industry. However, a short supply of lidar (light detection and ranging), an essential component in driverless cars that detects and scans a car’s surrounding objects, is causing bottlenecks in the development and production of autonomous driving systems. 

During the last few weeks, details about a lidar production shortfall have emerged. Suppliers and analysts EBN has contacted have confirmed Quanergy and Velodyne in the U.S., are struggling to deliver the component on time at a price $250 per-unit the systems builders, including Continental, Denso, and Ibeo, command. Eventually, the component makers must bring the price point below $150 per device to meet the suppliers’ demands, according to Frost & Sullivan data.

In the case of Velodyne, the backlog for its orders can be six months, the company has confirmed. 

The production shortfall is also indirectly mentioned in Uber response to Google’s Waymo lawsuit claiming Uber illegally procured driverless technology from Waymo for its driverless program. While Uber indirectly cited Velodyne, it wrote in its complaint that Uber “uses commercially available [lidar] technology from third parties, such as Velodyne, in all of its cars that are currently on the road.”

Waymo's lidar component is placed in a cone-shaped form factor on the roof of its self-driving cars, but lidarsin driverless cars of the future will be embedded in the front, back, and elsewhere in car models. Photo: Waymo.

Waymo's lidar component is placed in a cone-shaped form factor on the roof of its self-driving cars, but lidarsin driverless cars of the future will be embedded in the front, back, and elsewhere in car models. Photo: Waymo.

“Lidar technology cannot keep up with demand for the quantities needed for testing, much less for commercial use. In fact, the impetus for [Uber] to develop an in-house customized lidar was, in part, due to the difficulty in obtaining lidar sensors in sufficient quantities from commercial sources,” Uber wrote. “Uber’s primary supplier for the cars currently on the road, cannot meet the demand for its lidar.”

However, the lidar supply problems are not necessarily throttling the development of self-driving cars in research labs. Despite reports maintaining that the University of Waterloo’s self-driving car project was postponed for a few years because of the shortage, Ross McKenzie, managing director for the University of Waterloo’s WatCAR department, said the  University of Waterloo's self-driving car program was “not put on hold.” Ross told EBN that WatCAR’s five-year old Velodyne lidar unit stopped working but was replaced in April. The device used for research purposes is expected to function for an additional five years, he said.

Back in business  

Velodyne hopes to remedy the lidar production shortfall when its new lidar plant in San Jose is completed later this year. The company says it expects to sell 10,000 lidar units in 2017 after only selling less than a few thousand units last year.

“Lidar sensors are in high demand and Velodyne is diligently working to meet the growing needs of our customers, all while delivering the best product possible” a Velodyne spokesperson wrote in an email to EBN. “The recent opening of our mega-factory in San Jose is a big step forward in meeting this high global demand by significantly ramping up production…. Based on these efforts, and as high-volume manufacturing of autonomous vehicles ramps up in the next couple years, we expect to be in prime position to meet this growing demand while continuing to provide the quality products that our customers have grown to expect from us.”

OEMs unconcerned  

Despite the production glitches, Audi’s new A8 is expected to offer level 3 self-driving features later this year (although they could be deactivated pending legislation). Level 3 driving means the driver can rely on the car to pilot itself on a highway in certain driving conditions, although the driver must remain ready to assume control of the vehicle at any given moment. In addition to Audi, other carmaker, such as BMW, Mercedes-Benz, Tesla, and Volvo are expected to offer level 3 features in their cars in the near term and have plans to eventually offer level 4 self-driving capabilities, so that the driver is not required to resume control of the vehicle when prompted in limited driving conditions.

In the car-sharing space, Google’ Waymo, Uber, and likely Apple are preparing to offer self-driving cars that could essentially replace service-on-demand taxis. The lidar component is in short supply at the moment, as Uber described in its response to Waymo’s complaint, but the companies have not disclosed supply chain impediments to its long-term plans.   

Indeed, large-volume OEMs that EBN contacted directly including BMW, Renault-Nissan Alliance, and PSA/Peugeot-Citroen say their self-driving car plans remain on schedule. But at least in the immediate, the component required to offer these cars remains in short supply.

“Lidar is a required device in self-driving cars of the future,” Anirudh Venkitaraman, an analyst for Frost & Sullivan told EBN. “The technology is still in the nascent stages, which still must be taken into account. Things can go wrong.”

1 comment on “Self-Driving Car Development Crashes into Supply Shortages

  1. mickeymatte
    May 4, 2017

    Thanks for sharing the self-driving car development crashes into supply shortages.

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