Hey, everybody. Thank you for joining us. I'm Jesus Gonzalez Lopez, junior auto analyst here at JP Morgan, and I'm here with Arbe Robotics and Chief and CEO, Kobi Marenko . Go ahead.
Thank you. I'll try to do my presentation short and leave some time for questions. I'm Kobi Marenko. I'm the Co-Founder and CEO of Arbe. Arbe is my third venture as a Co-Founder and a CEO. My previous company went public on the London market more than 10 years ago. The name is Tremor, traded also now on the Nasdaq, and my previous company was merged into an American company called Digital Turbine. After that, those two companies were around advertising and mobile, and then I felt that I should do something different. We, we were, my Co-Founder and me were looking into problems of safety and navigation in automotive.
We came to the conclusion that any car without a sensor that can see around it in any weather and any lighting condition won't be safe, and the only sensor that can do it is a radar. So we began developing a chipset for a ultra-high-resolution radar. Seven years passed, and we are 100 people, mainly in our Tel Aviv office, but also in the U.S., China, and Germany, where we are supporting our customers. We have the chipset on the final stages of production that consists of three chips, transmitter, receiver, and a processor. Our processor is our core IP. We are well-funded.
Just recently, we raised a follow-on on top of the first $100 million that we raised when we were listed on the Nasdaq of another $23 million. We believe that we have sufficient cash in order to be profitable somewhere around early 2025. We have $40 million of preliminary orders for 2024, mainly from the Chinese market. Around 10 OEMs are in a final decision of adopting our technology. The first wins that we have are in China. China is right now the most advanced market in terms of EVs, electric vehicles adoption. They are adopting sensors faster than anywhere else.
We have a premium model that will go to production with our technology in early 2026. We were selected by major European premium brand for their China fleet, and we have 2 wins already with the L4 players that has a large fleet, AutoX, the largest robotaxi in China, and Didi, Didi's trucks. Basically, when we are looking on the automotive market, what we believe going to be the main and al- and most of it, the only business around is what we call L2+, L2++.
It's hands-free driving from point to point, and we designed a sensor that will enable perception for this functionality, that will work in any weather, any lighting condition, up to a very long range in ultra-high resolution and will generate a full free space mapping of the environment that works in 100% of time from one end and from the other end, won't generate any false targets, which is the main problems of many of today's sensors. We believe that hands-off and eyes-off, this is the main application in automotive, and also the analysts see it like that. The L4, that is called mind-off, is definitely, we won't be able to see major revenues from those kinds of application in the next 10 years.
Our chipset consists of three chips, transmitter, receiver, and a processor. Our core IP is our processor that offers the ability to process 48 by 48 radar channels that generating around 1 Tb of data per second. We are doing it with our proprietary IP that basically knows to squeeze the data, to crunch it, and to take this theoretical 1 Tb of data and generate from it a 1 Gb Ethernet point cloud that can be processed by the central computer of the car. We believe that 1 perception radar like we are producing is a must for L2+, L2++. L3 might be needed another L2 or L3 lower-end imaging radar, but still strong radars.
For L4, L5, customers are talking about six high-end radars per car. Our solution is the only solution that enable free space mapping for L2+ and L3 without LiDAR. It functions in any weather and any lighting condition, can see to a very long range in a very wide field of view, and it supports a mass production radar in a cost of $150 that basically can be adapted in almost any car and any model. This is a video showing our technology in action.
On the right side, you can see the point cloud that is generated by our radar in real time, and in the center is our AI stack that takes the point cloud and generating a full free space mapping of the environment, showing to the car what is drivable and what is not, where it can drive and where it cannot, where the road ends. Of course, if there is pedestrians, cars, motorcycles, bicycles, we are able to detect them easily and to make sure that the car will adopt the driving speed or turn to other lane in order to make sure that it won't hurt anything.
This our radar can work in real time, 20 frames per second and up, and generate this full picture of the environment in real time, especially in cases that the camera fails when the light is shining on the sensor or when we are getting into the tunnel and the camera hurts. Of course, the camera cannot work when there is problems of weather. The camera has a very limited range, but the radar solves them all of those problems. Basically, we believe that we are fit for L2+ and up, which is going to be a majority of the market in the next five to 10 years.
We believe that robotaxi and full level four will take long time, not sure that it will even come into a real mass production. The TAM of radar today is around $6.5 billion, the total radars that would be sold in 2030 are going to be around 17 million. The high-end imaging radar will take something like 20% of this market, we're going to be a big player out of it. Arbe is a Tier 2, which means that we are selling our chips and a reference design to the Tier 1.
The big auto manufacturing companies like Magna, Continental, and Bosch, and they're taking our radar, our chips, and building a full radar model out of it, doing all of the testing, qualification, production line that is needed for that, and taking it into production. We are engaged today with four leading Tier 1s, Magna, that both Veoneer. Veoneer was a major player in the radars market, the third largest player in radars. Magna bought them. Veoneer selected us almost a year and a half ago, and they're in the final stages of launching a B sample based on our radar.
Expected to be on the third quarter of this year, and full production of radar based on our chipset in early 2025, mainly for Europe, U.S., and the rest of the world. In China, we are engaged with HiRain and Weifu. HiRain is the largest ADAS leader in China. Weifu is a multi-billion Chinese Tier 1, partly owned by Bosch. Weifu already showed to the market a full B sample and a production line based on our radar. HiRain are in the final stages, and we believe that by Q3, they will have also a full production line with our chips, and will go to production.
We also have a partner for non-automotive application called Qamcom, and they are taking our technology for commercial vehicles, for off-road and so on, not for automotive applications. When we are looking today on the competition, the radar today is a business that is controlled by NXP, TI, and Infineon. None of them has a solution that can go into the high level of channels that we believe that is a must in order to generate a picture that is safe enough and can really make it for L2+, a real safe L2+, L2++, or L3. The only player today that is trying to compete with us on the same performance is Mobileye that developing a radar.
They are between two to three years after us in terms of their ability to bring a sensor to the market. We also believe that their solution would be more expensive and not fit for a real mass market of L2+, L2++ cars. Worth mentioning also Ambarella, that they bought a company called Oculii. We haven't seen any traction for this product since they bought them 1.5 years ago, but we're still counting them as a competitor. We are engaged today, as I mentioned, mainly with car manufacturers through the Tier 1s, but also with the car manufacturers themselves.
The car manufacturers basically buying from us a full radar sample in order to start collecting data and to train their perception, their, their perception stack, and the full mass production is coming from the Tier 1s. Where the Tier 1s will be ready, all of our Tier 1s will be ready with full production radar in Q3. Q4, we begin chipset production, and next year we're gonna be in a full mass production of radars based on our chipset, mainly in China and in 2025 in Europe and in U.S. Basically, our revenues in 2024 are mainly based on China. 2025, it will be something like 50/50%, 60%-30% split. 2026, it's gonna be something like 50% China, 50% Europe and U.S.
Our guidance for this year is winning two significant U.S. European OEMs for active programs and two new Chinese OEMs. On top of it, five non-retail automotive partners like trucks, robotaxis, or infrastructure. We just recently won a Didi for trucks, and we won a big project with the HiRain for China infrastructure. Starting of automotive grade production by the end of Q4, and revenues are between $5 million-$7 million this year. The team is very experienced. Our Chief Business Officer is coming from automotive, spent his last position in TI, managing their sales to automotive companies. My co-founder, Noam Arkind, did his PhD in applied mathematics on autonomous movements of robots.
Last year, came to us, joined us, Gonen Barkan, he's our Chief Radar Officer, working on the strategy of our radar, and our next generation is coming from GM. Worth also mentioning, Shay, that is not here, that is our VP Operation, coming from 25 years of experience in taking chips into production in automotive, which is a very, very, very complicated task. This is the... It is an intro, I would love to answer your questions.
Yeah. No, thank you so much for the presentation. I think I have a question to start off on the broader industry. You know, given your closer proximity to semiconductor manufacturers than most auto parts suppliers, you know, can you provide any color on supply and pricing environment and how that's tracking you to date?
Which, our supply?
Yeah, your supply of semiconductors.
Yeah. We're basically, we're engaged with GlobalFoundries is our fab. We are one of their top three strategic clients, and the first company to go into production with their automotive process. GlobalFoundries is also doing for us all of the testing and management of inventory from their facility in Vermont. The fab itself is in Germany, in Dresden, and we have a capacity that they is saving for us for 2024 and 2025. This is part of the lessons from the problems of supply chain.
Basically, for each car company that we are doing an, that we are submitting an RFP, GlobalFoundries submitting a comfort letter that they will supply the chips on the volume on and the timeline that the OEM wants.
Gotcha. Thank you. Just in terms of pricing, what are you guys seeing for semiconductors and the overall inflationary environment there?
First of all, we see a pressure. The automotive industry is under real pressure. The EV is expensive, the margins are low, Tesla pushing the prices down, and the only way for car manufacturers to generate more profit is from, I think, ADAS features. They are trying to maximize it by pushing down their prices as much as they can, and also using the sensors that are cost and effective. I think that we have a very good solution for that.
Our chipset, as I, as I mentioned, basically, enable Magna and our supplier and our Tier 1 partners to sell a full radar model in $150, which is a very attractive price point, definitely as opposed to LiDAR, that costs thousands of dollars and up.
Yeah. No, I think you kinda hit my next question right on the head, but, you know, given OEM's focus on reducing costs across both EVs and ICE vehicles, you know, do you expect to see increased quote activity for your radar solution as the industry kinda realizes the cost benefit you can bring?
Yeah. Definitely, this is right now the case. The car manufacturers are looking for new ways to generate revenues, ADAS and L2+, L2++, or point-to-point driving, hands-free driving... I think is the only way for them to generate more revenues from services. This is, I think, gonna be their focus for the next five to 10 years.
Gotcha. No, that's helpful color. Then lastly, on the ADAS side, a lot of OEMs have talked about pushing out their timeline for full autonomous driving. You know, Ford announced that they're shutting down Argo. Given that L2 is probably gonna have a longer ramp, a longer, like, life cycle, do you expect to see increased revenue from that market, or is the big opportunity for your company still L4?
I don't. From the beginning, my co-founder, when we started the company, wanted to do a full autonomous driving. I told him that I'm supporting his hobby, but it will, it won't be a business in the next 10 or 15 years. We designed the chipset that, by the end of the day, can support L4, but the main benefit, and it fits from cost perspective also to L2+ plus L3. I think that L4 as a mass market is something that will take 15 years, maybe, until it will mature. So it's not.
To, to put a robotaxi in, in one city, with an hardware that costs $200,000 per car, I don't see how it scale up to being a business, or definitely not for us.
No. Got it. Thank you. Makes sense. Then I think we had some audience questions in the back.
Yeah. Hey, I wanted to find out, of your early customers, are they... What, what kind of sensors are they using? Are they planning to use your sensor in lieu of LiDAR or in addition? I'm assuming cameras are part of it, or am I wrong there?
Yeah. Camera is mandatory, so, there's no, there's no way to build any kind of service without, you can say 10 to eight to 11 cameras. Everyone has their own configuration, and, and majority of those cameras are short range, only part of them are long range, that is, are more expensive. Camera is given, so, vision only can take you far away. I, I, I would bet around 90%-95% of the problem. The main issue is that on the last 5%, you might kill people. The last 5% is the most problematic, and, for that, I think radar, and especially imaging radar, is the solution. As much as redundancies you want, you should add, also LiDAR. LiDAR-
LiDAR has a huge advantage in L4. If you want to do a full autonomous driving and you need to do a real-time mapping, I think LiDAR is the way to go, but since L4 is far away, I am not sure how much business there is in L4. For, L2+ and L2++ , I think that the problem can be solved as long as the driver is still in a way ready to take action. I'm not sure that LiDAR is needed. For L3, I don't see a car company taking the responsibility without putting a LiDAR, just in any case that they will be sued, they can say that they have everything.
Seriously, I think for the beginning, collecting data with the LiDAR and the radar, having the LiDAR as a ground truth for, for the radar and training the algorithms is the way to go, and maybe over time for L3, not for L2++, you can consider whether a LiDAR is needed or not. I, I, I think most of the customers that working with us, combining radar and LiDAR right now.
For that extra cost, what are they achieving with?
Sorry?
With the additional cost of radar and LiDAR, what are they achieving?
They are achieving a With extra cost of radar and LiDAR, they can achieve a real point-to-point driving without- with a hands-free, and even, I would say, m- a bit of eyes-off. You cannot get to sleep, but you can relax, and maybe in a, in a situation that something went wrong, the car will tell you, "Please take control.
Yeah, the LiDAR vendors are indicating they can do that without radar. That's what I'm asking. With the addition of your radar, what are they achieving?
I haven't seen a service doing it without a. I haven't seen anyone doing it without radar.
Okay. Thank you.
I haven't seen such a system working, and to be honest, I don't think that it will work because of the range, because of problems of. The LiDAR, by the end of the day, is vulnerable to the same problems as the camera. If the sun is shining on the sensor, the range of the LiDAR got reduced dramatically. If there is rain, the LiDAR has an issues. I don't think that the LiDAR can compensate on some of the problems of the camera, but not on all of them.
Do you have any other questions from the audience, or? Yeah, I mean, just kind of since your production is supposed to ramp at the end of Q4 going into 2024, what's your view on light vehicle production across the geographies you have business in, you know, 2024, 2025, and you can give me color on that?
As I, as I mentioned, 2024, we will start, we have preliminary orders of around $40 million from the Chinese market, and we believe that this is the first market that we will start shipping chips and see revenues. 2025, the mix will start change to support our European and U.S. customers, and in 2026, it's going to be something like 50/50.
Got it. Thank you. In terms of like the structural cost benefits an OEM can realize with using your system versus your competitors or, pure LiDAR system, can you kind of like quantify that, and in terms of like what that would mean as they're ramping production?
If you're trying to compare imaging radar, our imaging an imaging radar that is based on our chips to the next imaging radar in the market, that is based on TI chips and NXP chips, basically, our radar has 10 times more radar channels, and in radar, channels is like pixels. It has 10, 10 times better pixels and more or less of the same price as the next. If we're trying to compare it with the low-end radar, if, for example, our radar is around-- radar based on our chips is around 150, today's front radar, regular front radar, that is doing pure adaptive cruise control, is a radar of sub $100, something like that.
The extra cost for the car company to adopt imaging radar is just $50, because the 100 radar is already there.
Got it. No, thank you. That's all I had in terms of questions. I don't know if the audience has anything else they want to ask? No. Well, yeah, thank you so much for your presentation.
Thank you.