PARIS (Reuters) - French car parts company Valeo has won 500 million euros ($564 million) worth of orders for its ‘Lidar’ car sensor products, Valeo executive Marc Vrecko told Reuters in an interview, highlighting the potential growth of Lidar.
“Those 500 million euros of orders with four major global auto groups will probably eventually represent between 1 to 1.5 billion worth of recurring business,” said Vrecko.
“It’s a business where the life-cycle can go up to 2024 or 2025,” added Vrecko.
The upbeat comments helped Valeo shares to rise by around 2% in early session trading.
Lidar is the laser imaging technology used increasingly in self-driving cars to generate precise pictures of the environment around the vehicles.
More than $1 billion in corporate and private investment has gone into some 50 Lidar startups over the past three years, including a record $420 million in 2018, according to a Reuters analysis of publicly available investment data in March.
Nevertheless, Lidar has been criticised by Tesla chief executive Elon Musk, who described Lidar in April as a “fools’ errand”. Tesla vehicles rely on cameras and radars as their vision system for self-driving.
Valeo’s Vrecko reckoned, however, that Musk would soon change his mind and would be won over to Lidar.
“I respect Elon Musk but I have to say, on that particular point, he is going against the consensus of opinion.”
Valeo has invested heavily to benefit from ever-tightening emissions regulations and increasing vehicle automation, although it has also faced headwinds from a broader auto-market slowdown and international trade disputes.
In April, France raised its stake in Valeo to just above 7%, making the French state’s shareholding in Valeo slightly higher than the one held by activist fund Harris Associates.
Reporting by Gilles Guillaume; Editing by Sudip Kar-Gupta