• In a series of tweets, Cruise President Kyle Vogt said recent valuations of lidar firms that have cut deals to go public with SPACs are overvalued.
• Vogt is former CEO and co-founder of Cruise, General Motors' majority-owned autonomous vehicle subsidiary.
• He specifically named lidar companies AEVA, Innoviz, Ouster, Velodyne Lidar and Luminar Technologies, all of which have announced SPAC deals.

The co-founder and president of Cruise, General Motors' majority-owned autonomous vehicle subsidiary, is predicting a consolidation/collapse of the lidar industry, specifically regarding companies that have gone public or plan to do so through deals with blank check companies.

In a series of tweets earlier this week, Kyle Vogt, who also serves as Cruise's chief technology officer, said recent valuations of companies that have cut deals to go public with such firms, also known as special purpose acquisition companies (SPACS), are overvalued.

"Interesting thing happening in the LIDAR industry right now. 5+ companies will soon or have SPAC'd," he said Wednesday afternoon. "Their value is based on *projected* revenue that comes from *entirely overlapping* potential customers, with very little discount applied to future projections. Is this bad?"

1/ Interesting thing happening in the LIDAR industry right now. 5+ companies will soon or have SPAC'd. Their value is based on *projected* revenue that comes from *entirely overlapping* potential customers, with very little discount applied to future projections. Is this bad?

— Kyle Vogt (@kvogt) January 6, 2021

Vogt continued by discussing the SPAC model and says one of the companies – specifically naming AEVA, Innoviz, Ouster, Velodyne Lidar and Luminar Technologies – may be able to meet such high valuations, but not all of them. The first three companies have announced SPAC deals but have not yet gone public.

"Of course, it's certainly not unusual for startups to be valued based on future revenue projections, even in a highly competitive space," Vogt tweeted. "But I typically see private markets put a much larger discount on these future projections than what we see with these SPACs."

Cameras help autonomous vehicles read street signs and the color of traffic lights. But lidars, or light detection and ranging systems, do the important work of sensing and helping cars avoid obstacles, whether that's a fallen tree, drunk driver, or a child running out into the road. Lidar also has applications in defense, robotics, aviation and, more recently, personal electronic devices such as Apple's iPhone.

Luminar went public last month through a SPAC deal with an enterprise value of $2.9 billion. Its current market cap is $10.7 billion. It's a similar story with Velodyne, which went public in September with a $1.8 billion valuation despite recording a net loss of $67.2 million on revenue of $101.4 million in 2019. It has a market cap of $4 billion.

"Robotaxis will have an enormous positive impact on society, so it's critical to see progress here," tweeted Vogt, saying he respects all of the companies. "But we saw a consolidation / collapse of the robotaxi space over the last 24 months (down to a handful of players), and LIDAR is next. This probably means lower market caps for most of these co's, which sucks for everyone involved, but may the best product win!"

Outside of Tesla CEO Elon Musk, who has criticized lidar, many consider the technology essential for self-driving vehicles. Lidar works by using laser beams to create a 3D environment of its surroundings for onboard computer systems.

Cruise acquired a lidar start-up called Strobe in 2017. The company is continuing to build its own self-driving sensor technology internally as well as "watching to see what comes from the marketplace," according to a Cruise spokesman.

"As we begin to commercialize, we're going to make our decision based entirely on making sure our customers and communities are safe, and that we get the price of the technology down to a point where it's accessible to everyone," he said in an emailed statement.