Hesai Group, the world’s largest maker of lidar sensors, plans to expand its manufacturing capacity fourfold this year amid surging demand for its products used in driver-assistance systems in cars. The Shanghai-based company would expand its capacity to manufacture the light detection and ranging sensors – which employ laser beams to measure distances to objects – to 2 million units in 2025, from about 502,000 units last year, according to David Li Yifan, the founder and CEO. “We can guarantee capacity expansion to 2 million units within a few months,” he said at a media briefing in Shanghai. “Supply chain will not be an issue. For us, it is just a matter of building more facilities.” The company, whose clients include Li Auto, mainland China’s largest maker of premium electric vehicles (EV), and Geely, owner of Volvo Cars, expected to deliver up to 1.5 million lidar sensors to its clients this year, he added. Li’s remarks came after Beijing tightened its oversight on driver-assistance systems, or preliminary autonomous driving technology, after a fatal accident involving a Xiaomi EV killed three people last month. The SU7, with its driver-assistance system in operating mode, crashed into a barrier at a high speed two seconds after the system alerted the driver to take control of the car. The crash triggered fears about the safety and reliability of cars fitted with driver-assistance systems, which have rapidly gained popularity on the mainland amid Chinese consumers’ willingness to embrace new technology. Hesai is expected to benefit from the heightened regulations since its lidar sensors are superior to cameras in detecting road conditions, according to analysts. Its ATX lidar sensors could identify conditions such as rain, fog and exhaust fumes in real time at a pixel level, filtering out most of the environmental noise, according to Hesai. Li said Hesai would begin making the AT1440 lidar sensors, designed for level 4 autonomous driving capability, in the second half of 2025. Most available self-driving -systems on the mainland are classified as either level 2 (L2) or L2+, both of which require drivers to keep their hands on the wheel at all times, according to standards set by US-based SAE International. Beijing has yet to legalise L3, also known as a “hands-off” system, while cars with L4 self-driving capability would allow drivers to take their eyes off the road. Hesai also supplies its sensors to robot makers and robotaxi firms. The Nasdaq-listed company had reduced the cost of its products to about US$200 per unit from thousands of dollars five years ago as production volume climbed, CFO Andrew Fan told the Post in an interview last month. According to research firm Yole Group, Hesai dominated the global robotaxi lidar business in 2023, accounting for 74 per cent of the US$124 million market. Two out of three new cars, or 15 million units, sold on the mainland this year would have L2 or higher autonomous driving -capability, according to Zhang Yongwei, general secretary of China EV100, a non-governmental organisation that counts most of the nation’s top EV executives as members.