January 20, 2022 -- InvestorsHub NewsWire -- NetworkNewsWire
Editorial Coverage: Mainstream fully autonomous vehicles are
not an if, they are a when. The bigger question is what it is going
to take from a technical end to get self-driving cars and trucks
safely maneuvering along every side street and highway. As one can
imagine, the 2022
Consumer Electronics Show in Las Vegas this month was once
again a hotbed of activity featuring the future of autonomous
vehicles. The opening keynote was presented by Mary Barra, chair
and CEO of General Motors, detailing the automaker’s vision of GM
leading the industry transformation underpinned by connectivity,
electrification and autonomy. How the industry reaches that end is
the subject of different business models, but it seems a safe bet
that it will include a confluence of technologies, including the
powers of LiDAR to make autonomous driving as commonplace as power
windows and brakes.
GM has partnered with the LiDAR experts at Cepton Technologies,
which plans to come public early this year via a highly anticipated
SPAC merger with Growth Capital Acquisition Corp.
(NASDAQ:
GCAC) (Profile). Cepton is in the thick of the
industry that provides investors exposure to autonomous vehicles
through multiple avenues, having engagements with all of the top 10
auto manufacturers. This list includes GM, which has
already chosen
Cepton’s LiDAR (Light Detection And Ranging) for its Ultra
Cruise; Ford Motors, with which Cepton already has a contract for
Smart Cities; Toyota Motor Corporation (NYSE: TM),
which is one of the biggest
shareholders of Cepton’s Tier 1 partner Koito; and
forward-looking Stellantis N.V. (NYSE: STLA). Cepton
may have the inside track on a few of these engagements, making it
a potential excellent play on the evolution of the automobile and
the driving experience. In addition, Qualcomm Incorporated (NASDAQ:
QCOM) is a part of this evolution, having
partnered with GM for its Ultra Cruise and with Cepton on its Smart
City Accelerator Program.
- Cepton Technologies, a Silicon Valley company purpose built to
mass produce next-generation LiDAR technology, is coming public via
SPAC with a $1.50 billion valuation.
- Cepton’s patented MMT(R) is redefining LiDAR technology with
superior performance and increased reliability at a lower cost than
the competing MEMS technology.
- Cepton LiDAR’s compact design enables it to be safely placed
behind the windshield requiring no design adaptation of the car
body, a huge plus for OEM mass adoption across models.
- Cepton is anticipating shipping more than 1 million units in
2025, generating revenue of $861 million (all listed LiDAR
companies are compared basis their expected results in 2025).
Click here to view the custom infographic of
the Growth Capital Acquisition
Corp. editorial.
LiDAR: Faster, Longer, Stronger
There is an ongoing debate in the autonomous driving world over
which technologies will dominate, as some companies maintain a
narrow focus with merely camera technology and others pack about
every type of tech possible into autonomous cars. As it goes today,
most companies are employing a mix of sonar and radar in their
warning systems, with LiDAR technology being the new kid on the
automotive block, which many believe to be superior to anything
existing with respect to four tenets of the future of driverless
cars: accuracy, speed, quality and range. The combination of all
three imaging tools working in tandem via advanced software and AI,
are indispensable in the ADAS (Advanced Driver Assistance Systems)
and AV (autonomous vehicles) world.
Originally developed by NASA to keep track of satellites and
measure distances in space, LiDAR technology involves sensors
emitting a succession of infrared light pulses. The tech has
traveled from space to Earth to become integral to the automotive
and other industries. Sensors on vehicles shoot infrared light
around vehicles, where the pulses bounce off objects and return to
the sensor where sophisticated calculations are made in a fraction
of a second to measure the travel time of the light; hence, the
name time-of-flight LiDAR. The result is a constantly updating 3D
map of the road and the surrounding area that directs actions
(i.e., stopping, turning, slowing, etc.) of an autonomous
vehicle.
The global LiDAR market is booming to the tune of 22.7% compound
annual growth, according to Fortune
Business Insights. Growth is being fueld by autonomous driving
and other applications that will result in the market size
increasing from $1.32 billion in 2018 to $6.71 billion by 2026.
Growth Capital Acquisition Corp. (NASDAQ:
GCAC) is a special purpose acquisition company
(“SPAC”) incorporated for the purpose of acquiring an operating
company with an enterprise value in the range of $400 million
to $1.5
billion. In the spring of 2021, an acquisition
target was identified in Cepton Technologies, an upstart
quickly building a reputation as a standout in LiDAR technology.
More specifically, Cepton found itself in the headlines after
forging an exclusive agreement with General Motors where Cepton
tech will be used in GM’s acclaimed Ultra Cruise ADAS.
The proposed merger between Cepton and GCAC was announced on
Aug. 5, 2021, and Wall Street is watching for the completion of the
transaction early this quarter, which will make Cepton a public
company trading on the NASDAQ under the ticker CPTN.
Founded less than six years ago, Cepton is a provider of high
performance, mass-market LiDAR products to a variety of industries.
The company has already launched innovative technology and built
relationships with some of the biggest names in the automotive
industry, including GM and Japan’s Koito Manufacturing, a global
automotive lighting equipment giant. Koito has a significant
interest in Cepton’s success after making a $50 million
investment in the company. This is just a bit of name
dropping for Cepton, who has more than 100 active customer projects
in smart infrastructure/smart cities, engagements with all top-10
automotive original equipment manufacturers (“OEMs”) and more than
160 opportunities in its pipeline.
10x Bigger Than All Other Auto LiDAR Contracts
Combined
In the simplest sense, LiDAR and its associated computing power
serve as the eyes and brain of an autonomous vehicle. Obviously,
engineers are facing incredible challenges as they work to
replicate the speed and accuracy of a human brain to collect,
process and respond to surrounding stimulus that is changing at 102
feet per second when traveling at 70 miles per hour. Broadly,
market barriers revolve around performance, integration,
reliability and costs.
Cepton kept all these obstacles in mind with its bespoke team
and tech, developing a turnkey LiDAR solution platform using its
patented Micro Motion Technology (“MMT”) for ADAS autonomous
driving and smart infrastructure applications. MMT is Cepton
innovation at work, replacing microscopic mirrors used in
competitors’ micro-electro-mechanical-systems (“MEMS”) technology.
The benefits of Cepton technology are both functional and
economical, as the crystal-like materials provide superior
performance and use less power all while costing less. Lower cost
and less power consumption without sacrificing performance —
perhaps improving it — are sweet spots for electric vehicle (“EV”)
manufacturers where every effort is made to conserve battery
power.
Cepton has proven the merits of its MMT technology in multiple
instances, including developmental use in automated shuttles and
now the pact with General Motors. The contract represents the
biggest automotive industry LiDAR design win in history, topping
the aggregate of all other auto LiDAR awards by a factor of
approximately 10.
Per the design award, GM will be using Cepton LiDARs in up to
nine different GM models that offer Ultra Cruise ADAS autonomous
driving platform beginning next year with an initial contract
length through 2027. GM is being touted by the company and analysts
alike for accommodating hands-free driving on about 95% of all the
roads in North America, compared to GM’s Super Cruise technology,
which only allows hands-free driving on highways.
One Million Units on Tap
As Cepton’s first major production client, GM gets Silicon
Valley-based Cepton moving in the right direction to meet its goal
to be the world’s
first LiDAR company to go mass market across multiple
vehicle platforms. The Koito relationship paid strong dividends as
the Tokyo-based company made the new GM contract possible. Cepton
has provided a nonexclusive license to Koito to manufacture a
version of Cepton’s MMT-based, Vista(R)-X90 automotive grade LiDAR,
using key components and technologies from Cepton. These are the
sensors that GM will be using in vehicles equipped with its ADAS
platform.
“We founded Cepton in 2016 with an emphasis on ADAS and centered
our LiDAR innovation around the goal of making LiDAR an essential
automotive safety sensor in everyday passenger cars. We are now
focused on delivering a safer and more enjoyable driving experience
to consumers within the next few years,” said Cepton
CEO and cofounder Dr. Jun Pei.
Owing to its robust properties and solid price point, Cepton
anticipates strong market adoption from auto OEMs and others where
LiDAR is becoming prominent. The company says it expects to ship
more than one million of its LiDAR units in 2025 as momentum builds
and a flywheel
effect results, where the technology becomes embedded in
different manufacturing infrastructures, which in turn fuels volume
production and lower costs, which leads to more uptake and a repeat
of the cycle.
The SPAC Terms
Growth Capital Acquisition Corp. is a SPAC with
approximately $231
million of pro forma cash on the balance sheet, broken
down into $172.5 million in cash and $58.5 million raised via a
private investment in public entity (“PIPE”) anchored by the Koito
investment. The SPAC was assembled with the purpose of targeting a
company valued at up to $1.5 billion, and Cepton tracks essentially
at that based upon these figures, which equate to a pro forma firm
value of $1.50 billion. That’s roughly 1.8 times estimated 2025
revenue of $861 million.
Existing shareholders have the lion’s share (~85%) of the
shareholding, while SPAC IPO and founder shares account for about
12% and PIPE investors make up the other 3%. Cepton currently
employs 116 people, including 51 engineers and 21 PhDs focused on
developing state-of-the-art, intelligent, LiDAR-based solutions for
a range of markets, such as automotive, smart cities, smart spaces
and smart industrial applications. The initial emphasis is on ADAS,
the largest-end market for LiDAR.
Autonomous Vehicles in Sight
Safe to say that the world is speeding towards a day when roads
feature more autonomous vehicles than those where a driver is
facing forward intently gripping the steering wheel. The world is
getting small doses of hands-free driving, but full autonomy is
definitely in the cards eventually. Those that have read a report
from the Victoria
Transport Policy Institute understand that the group is
extremely bullish on the notion, calling for safe, reliable
autonomous cars in as few as three years. It’s certainly imaginable
that once the ball gets rolling, the acceleration will be at
lighting speed, shepherded along by a diverse group of companies
that are already headlong into the space.
Qualcomm Incorporated (NASDAQ:
QCOM) announced at CES 2022 its Snapdragon
Ride Vision System, an expansion to the product portfolio
featuring an open, scalable and modular computer vision software
stack built on an industry-leading four-nanometer (4nm) processing
node. The company also
announced a collaboration to bring the latest advancements
in driver assistance technologies along with products of its
Snapdragon Ride Platform to BMW Group’s next generation of ADAS and
automated driving (“AD”) platforms.
Toyota Motor Corporation’s (NYSE:
TM) development
philosophy for automated driving is the Mobility Teammate
Concept (“MTC”), an approach built on the belief that people and
vehicles can work together in the service of safe, convenient and
efficient mobility. Rather than removing humans from any engagement
with their mobility, MTC allows them to enjoy the freedom and joy
of driving if they choose, while also benefiting from the
capabilities of automated driving when they need or wish.
Stellantis N.V. (NYSE: STLA) is
a multinational automotive manufacturing corporation formed in 2021
on the basis of a 50-50 cross-border merger between the
Italian-American conglomerate Fiat Chrysler Automobiles and the
French PSA Group. The company owns an iconic brand portfolio and
had a presence at CES 2022 where demonstrations of its advanced electrification,
cockpit technology, autonomy and connectivity displays provided
tangible examples of Stellantis’ transition to a sustainable tech
mobility company.
For Baby Boomers, self-driving cars seems like something
straight out of the Jetsons, an idea will likely take some serious
getting used to. For babies being born today, however, autonomous
vehicles will be like the internet for Gen Xers. They will look to
the older generations and wonder how the world ever functioned
without them.
For more information about Growth Capital
Acquisition Corp., please visit Growth
Capital Acquisition Corp.
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