We'll now move over to our next phase, and that is autonomous driving. We start off with Jonas Ehinger, CEO of Gapwaves.
Thank you. My name is Jonas Ehinger. I'm the CEO of Gapwaves since six weeks. I've been engaged with Gapwaves for more than three and a half years as its chairman of the board. Thank you to Redeye and for everyone that has joined for this event today. I also have some colleagues with me. It's Lisa Törsäter from Gapwaves, who's the marketing and communication manager, and also Robert Berhof, our CFO. There's also some other familiar faces and close friends of Gapwaves and mine in the audience. Today I will try to focus on the trends, the macro trends that Redeye talked about in the beginning.
At Gapwaves, during my first six weeks, I'm very happy to have learned and experienced that there's a strong engagement for making a difference through our unique technology. One way to make a difference is to use a working clicker. Obviously, there's some delay here. One way to make a difference is to facilitate or enable autonomous driving or automated driving. I have been working in the medical industry, and safety is a big topic there. It's been reported last year, I think, from World Health Organization, that more than 1.3 million people die every year in and by traffic.
If we translate that into a more tangible number, like for the U.S. as a country, it's around 40,000 people every year that die in and by traffic from traffic. There's also around 50,000 people a year in the U.S. that are being injured, and 40,000 or 50,000, that's more than 100 people every day. There's huge gains in this perspective to be done. I'll show you some examples of how automated driving and driver support systems can improve this. Another interesting trend is of course within the transportation industry. It's been reported, I think it was, from McKinsey, that more than 50% of the total delivery cost is from the last mile of the delivery. These mega trends are now changing the market, as we've heard in other presentations also.
I will also describe how Gapwaves is contributing to this. The main area for us and for our unique antenna technology is of course within driving automation. There is also other areas for Gapwaves, which I will not go into detail about today, but it's also smart cities and how you make a city run efficiently in terms of transportation systems, but also traffic flow, et cetera. We're already working with companies that have products targeting these segments. Some recent examples from this transformation in the industry. You heard earlier in the presentation, I think you saw in the news like two weeks ago, about the new Volvo EX90 and their safety and autonomous setup, which will consist of one LiDAR unit, about five radars, eight cameras, and 16 ultrasonic sensors.
That is considered state-of-the-art right now. I think Volvo wants to position this car there. A few days ago, Waymo also published a report where they ran their system, their AI driver AI, versus a perfect human driver, a driver which is not tired, not driving under the influence, not fiddling around with their mobile phone or et cetera. Even in that optimal case, an optimal human driver, this AI system from Waymo performed significantly better in terms of avoiding collisions and reducing risk of injuries. I think that's quite interesting to see. Also, a few days ago, it was announced that now will Intel put their company that is developing self-driving technology on the market.
Initially, it was rumored at being $30 billion valuation, but I saw a more recent number, which is $24 billion. Still a pretty significant number. These are areas where Gapwaves can contribute. A question we often get will LiDAR or will another technology replace radar sensors? Because radar sensors is where Gapwaves can contribute through its antenna technology. This slide explains what is going on and what will happen as more and more cars and car manufacturers implement more and more driver assistance systems and also autonomous drive vehicles.
Currently, I would say, as you've heard in previous presentations, that we're probably at Level 2. It's my personal opinion, I would say that this EX90, which is considered state of the art, is probably at Level 2 plus or maybe Level 2 plus plus. It could probably be announced that it will go to Level 3, which means that in certain very specific situations, it's allowed for the driver to take their eyes off the road and do something else. There's also another car manufacturer who launched a car model with that functionality in Germany earlier this year. Level 4 and Level 5 is further away. However, as you can see, radar sensors or cameras will not be entirely replaced because the industry and the Tier 1s that we interact with, they strive for something, and they will have to accomplish something called functional safety.
There has to be redundancy in the system. There has to be different sensors and different technologies working in parallel, helping each other under certain conditions. Cameras are strong in some areas, but they have a problem, of course, if there's poor visibility or dirt on the camera. I didn't do anything. Do you want me to? Okay, thank you. LiDARs are bigger and more expensive, of course. There will be a combination, what we call a sensor suite. Of course, this need to be integrated in a system which you heard about in an earlier presentation. That is required to accomplish functional safety. We at Gapwaves, we're pretty convinced that there is a very strong future for radar sensors, and that's really where Gapwaves comes to its strength.
Looking forward, when will these new technologies reach significant volumes? In one of the latest automotive market research reports, it's been predicted that Level 3 and Level 4 cars will reach million unit volumes by 2028. We often get the question about Level 5, but it's further down the road, if I may use that expression. Probably we're looking at 2035 before they hit million unit levels in terms of vehicles. The radar market, here we're talking about 76–81 GHz band, is growing rapidly already now. There is a big requirement for these radar sensors, as you saw from the previous slides.
Probably, I think some people in this audience have a more accurate number, but I typically go with around 100 or 110 million cars being produced every year. If you multiply that with four or five, meaning the number of radar sensors, you can see that it's really big numbers that are starting to come out and being in production already now. Going forward, we're looking at a very strong growth rate. On the right side, there are some of the players in the field and some of them we have also announced our collaborations with. There is a lag somewhere. I have a different slide here than what is shown. Okay. Will you add time to my presentation then? Yeah.
You probably heard this before, that Gapwaves have a unique waveguide antenna technology, and it's based on this invention by Professor Per-Simon Kildal quite a few years ago. We use a specific, you can see it on the lower right, a specific pin structure that creates a magnetic field that guides the signal through the antenna. This means also that we have loose mechanical requirements or relaxed mechanical requirements on this antenna, which is a big advantage when it's going to be produced in big volumes. It's easier to produce. The number of failures or failed units will be less, which drives down the cost for the Tier 1 and obviously for the OEM in the end. It also has performance advantages. There is no leakage.
We see signal gains, quite significant signal gains versus other antenna types and competitors. A Tier 1 reported to us in a comparison they did with a traditional patch antenna that they observed 5 dB gain on a 77 GHz radar sensor. That translates into a number of things. 5 dB is 30% improvement in the detection area, or it can be used to see, let the radar see longer. If you gain 30 meters or 50 meters in an antenna, that's a huge number in terms of car safety and for the car and the system in terms of time to react. Coupling back to increased safety and reduced injuries from traffic.
We also get questions about the business model for Gapwaves and how does our business look in this automotive segment? Of course, you've heard before from the previous presentations. There's a sourcing and proof of concept process for the Tier 1 where they contact us or we contact them and that then it starts and there's a design win which then leads to a development phase. Of course, then the Tier 1 needs to have won the contract with the OEM and plan for production start. That takes time. As you've heard, there's a cycle time probably of three o five years between the development and finished development until the unit goes into volume production and gets into cars on the road.
Gapwaves' revenue streams, we make revenue both in the design and development phase, and sales of prototypes. There's quite a few number of prototypes that are being developed and sold and shipped to the Tier 1 during this process. Of course, in the production phase, the revenues become really significant. I also want to mention that Gapwaves is involved in developing production equipment and testing equipment for the Tier 1s and for our own production facility, in-house as well as external. There is also revenue from these equipments when they are being sold. Gapwaves is now moving from a technology and knowledge-based company into adding a strong production capability.
For those of you who have followed the company over the years, you know that in 2019 we signed a licensing agreement with Veoneer. They're producing, they're using our technology, they pay a license. Last year, we enter into an agreement with HELLA, which also means that they are a licensee of Gapwaves, and they also made an investment in the company, a fairly sizable investment. There is a number of prototype projects ongoing. We have discussions with a number of partners right now. We're also working with smartmicro, which is a company in Germany. They develop a fixed antenna for within the smart city segment for traffic surveillance. Another is developing imaging radars.
I actually have a sample with me here today that I can show later. Most recently, you probably saw the news that we have entered into a big agreement with Bosch. This agreement is really important, not only because it's Bosch, which is very good, but it's also a supply agreement. This is a stepping stone for Gapwaves to become a producer and a supplier of actual products and not only licensing our technology. You probably already know the case of Gapwaves, but as you've seen, it's now becoming an approved solution. It's not just a feasible technology. We also have very strong macro trends driving the market for us, which is a strength for Gapwaves. The technology is patented. We're now moving into high volume and manufacturing.
The products can actually be produced in a high volume setting, which is a strength also. We think that we can become a true market standard in high-resolution radars. The history of the company is that we were founded in 2011 by the professor, the late Professor Per-Simon Kildal. We were listed on the Nasdaq First North in 2016. There's currently around 7,500-8,000 shareholders. The technology is patented, and we're now in a strong commercialization phase. We're currently 30, just over 30 employees, and headquartered here in Gothenburg. I ran over a bit, but we had some technical problems. Sorry about that. Thank you.
Thanks for that presentation. We move into another panel discussion. I mean, you talked about the self-driving trend and so on, and some estimates about like when to move to autonomous driving, like level three. I mean, what has been the main hurdles to overcome? Like why these delays on autonomous driving? If you would start, Jonas.
I think I mentioned that already in my presentation. There's certain life cycles of products and cars, so it takes time. Also there's system development. You heard already about stronger and stronger computers that need to be designed into the cars, and you need a system architecture. Right now it's the life cycles for the cars as well as the Tier 1s to get their products and their systems into the cars.
Yeah. Do you have anything to add from your perspective?
Yeah. I think in autonomous, I mean, it has been underestimated the challenges, yeah? I think what we see now is sensor fusion. Same as Hugin, it will be a complement to other sensors and systems. All sensors working together to really create it. The problem we're seeing there is if one sensor reacts and it's waiting for confirmation from another sensor, then it's not fast enough. The whole integration there has been a challenge.
I mean, how dependent would you say that your various technologies are for the, I mean, increased adoption of higher grades of autonomy, if you start, Jonas?
I showed it also in the presentation. Not so dependent, but of course, the more autonomous driving on different levels as it progresses, the case for our technology and the utilization of our technology will be stronger, simply put. I totally agree with what you said before with the sensor fusion. That's a really important takeaway message. It will not be only one sensor technology. To accomplish functional safety, which I think is key, there will be a range of different technologies working together.
I also think what is great with autonomous product development is the product that are developed for autonomous can now be tested in driver-assisted vehicles first, so they do interlink.
Yeah. I mean, you obviously talked about it a little bit. I mean, as we move on to more autonomous cars, the different technologies that will be around. I mean, if you, , could talk about your thoughts about, like, how you see, like, imaging radar coping with LiDAR and your Hugin, for instance.
Yeah, I think, I mean, you did need different sensor for different purposes, right? Long distances, bad weather, dark, et cetera, right? There will be a need for different type of sensors, LiDAR, radar, cameras. Some OEMs prefer more one kind than some others, but most of them will use many. Again, I think Hugin will be a good complement, especially in urban areas, to react fast and very precise.
Do you see any indications from the I mean, you mentioned that you have some collaboration with Mercedes-Benz, for instance. Do you see, like, how do they think about the complementing technologies?
No, they like it a lot, per se. Come to us when you have it.
Okay. What are your thoughts? I mean, you talked about it obviously, but you don't see any threat from, like, LiDAR taking too much.
Absolutely not.
But you will be.
No. The key thing to accomplish is what I mentioned, functional safety. Otherwise, this trend and technologies, they will not fly, if I may use that expression. That's really why you need different sensors to handle different situations and conditions.
All right. Speaking about, like, your collaborations with the Tier 1s, like the middleman between you and the car makers, how do you think strategically on this? Do you want a broad portfolio of Tier 1s that you collaborate with or more specific partners? If you could start about, like, HELLA and so on.
Yeah, we're aiming high, so obviously we want to target and partner with the Tier 1s that have the strongest impact or market share, and that are also moving in the right direction, so for us. There's a lot of Tier 1s. We know the European ones and American ones, but there's another big country in the Far East, which has their entire own set of Tier 1s and car manufacturers, et cetera. We're focusing on the leading Tier 1s in our industry.
Just about, like, the Tier 1s in, like, say for instance in China, how do you think about, like, the IP risk there?
Yeah
The risk of stealing your technology, for instance.
Yeah. It's a topic that we're aware of and conscious about in Gapwaves. We're careful with that. We'll think twice before we partner up and give away technology knowhow. Products, physical products, that may be a different situation. However, we're not in a position where we have to make this decision now. We're clearly aware. I also want to bring up another risk which we're discussing when it comes to China, and there is also political risk with China. Now, some American companies are stepping away and moving out of China to other countries for their production, et cetera. We're trying to be very observant of these risks, both IP and copying as well as the political aspect.
What are your thoughts on the strategic choice of partnerships with the Tier 1s?
Now, we are talki ng to all Tier 1s, we're talking to all OEMs. If you also look at autonomous, there's a lot of new players as well, right? We talk to all of them because we see that our solutions will actually help all of them and complement, yeah. To comment also on the China aspect there as well, of course, we have a patent in as a foundation and a global license for that. Also, I think, I have the best team in the world. You know, we continuously work on our algorithms and AI and so, yeah, I'm not worried.
Yeah. I would actually agree. To move the innovation constantly is really important over time. Otherwise, there will be copies, be it in China or elsewhere.
I get it. I was also thinking about, I mean, because there are a lot of, like other Tier 1 types that will complement your technology. Is there a need for your technologies to perhaps be packaged with other technologies, if you will start, Magnus ?
No, absolutely. I mean, of course, already now we are looking at what do we need to do to fit into the Tier 1s and in the packaging the vehicles, both on cost, but also on integration possibilities. Also the trend that we heard here today about larger computers and how it's processed. Absolutely, that's something we have included already now.
What do you think? Is there a need or?
Yeah.
For the packages?
Yeah, I think there will be a need. Again, the Tier 1s will have to deliver a system, so obviously we have to adapt according to that.
Do you see any need of like you teaming up with other potential, say, other types of Tier 2 suppliers?
Potentially.
Yeah.
Potentially.
What types would that be?
It could be companies that develop novel chip technologies, for instance.
Mm-hmm. All right.
Which are needed in the radar sensors?
Okay. In our last panel discussions, we talked a lot about the regulatory drivers increasing the adoption of the ongoing technologies. What have you seen anything from the NCAPs or any other regulatory bodies that are starting to mandating your technologies? If you will start.
Yeah, definitely. I think it's impossible to get the highest rating in Euro NCAP, for instance, without certain emergency braking systems and driver assistance systems already today, and this will continue.
Do you see like, on the Euro NCAP schedule that is already today, like the 2023 or 2025, do you see any signs of this or like your technology specifically being included?
No, it will probably not, unfortunately. Gapwaves need to be included. Definitely the trend is moving in the right direction for us, requiring these type of systems that I explained.
Yeah.
Also other presenters.
Yeah.
Yeah, I also think, I mean, there are underlying drivers here from EU and United Nations about Vision Zero and traffic safety, right? That's very high on the agenda there. I believe Euro NCAP will hopefully follow that as well, right?
I mean, in the last panel, we also talked about the ongoing consolidation in the industry. How do you see that play out? Is there a need, or are there any moves for your kinds of technologies for consolidation?
For Gapwaves? Not right now.
No?
No, but I think it's very interesting to see what's happening in the industry, right? We talked earlier about the automotive, the history, how they've been working with their processes, and now meeting IT and technology, which is totally different. Soon you will have IT on wheels, right? That shift is. It's a lot of things happening in the market. Of course, we're monitoring different opportunities.
I get it. Just talking generally about the automotive industry being so slow and like slow-changing, what would you say are like the most important things for succeeding in the automotive industry? If you will start, Jonas.
Yeah. We heard it also in other presentations, where it starts with design wins to get in there with the, in our case, the Tier 1s that supply these systems to the OEMs. So that's the most important aspect, so we get into the process. I don't think we can change or shorten cycles that much, being a Tier 2, you know, supplier to the Tier 1s.
All right. What do you see as the most critical success factor?
Trust, I would say.
Yeah.
Walk the talk. That they see that the solution works, and they are trustworthy.
Yeah. 'Cause I mean, that has been an issue for many Tier 1s, like, because of the automotive industry being so slow, like some companies tend to get impatient and move on to another application areas. I mean, have you seen any actors like in your space that, I mean, kind of be impatient and losing momentum in the automotive industry because of that? If you would start.
No. I think on the contrary, given what I've shown in terms of, the growth of the market, there will probably be more people stepping into our segment instead.
Okay.
I think it's a very attractive space, and the future for us, for radar sensors and thereby for us is very strong.
Yeah. , do you see other upcoming technologies which are similar to yours entering the industry?
No, of course there's things happening all the time, right? I think still we believe that we are the fastest, and we are the more precise on the market, right? We also have a special technique and the patents in the bottom, so we feel very comfortable.
Great. We don't have time for any more questions, but thank you so much for taking the time, both of you.
Thank you.
Thank you.