Is China’s new L2 ADAS standard about to reshape the global autonomous driving landscape? The recent partnership between Hesai and Mercedes-Benz suggests a significant shift.
Introduction
In a major move that underscores the growing importance of Chinese technology in the global automotive industry, Gasgoo reports that Hesai Technology has become a strategic laser radar (LiDAR) partner for Mercedes-Benz. This partnership will see Hesai supplying LiDAR units for Mercedes-Benz’s L3-level autonomous driving models in both European and Chinese markets. The collaboration is set to begin in 2026, with Hesai’s newly operational ‘Galileo’ manufacturing center in Thailand ensuring the necessary production capacity.
Financial Performance and Market Position
Hesai’s financial performance in the first quarter of 2026 is impressive. The company reported a revenue of 680 million RMB, a 29.6% increase year-over-year. Additionally, Hesai achieved a net profit of 18.3 million RMB under GAAP standards, marking the fourth consecutive quarter of profitability. On a non-GAAP basis, the net profit was 47.7 million RMB, a staggering 452.9% increase from the previous year. These figures highlight the company’s strong market position and financial health.
Product Delivery and Market Share
Hesai’s product delivery numbers are equally impressive. In Q1 2026, the company delivered a total of 471,723 LiDAR units, a 140.9% increase compared to the same period last year. Specifically, ADAS LiDAR units accounted for 353,441 of these deliveries, showing a 141.9% growth. Robot LiDAR units also saw a significant increase, with 118,282 units delivered, a 137.8% rise.
Strategic Business Segments
Hesai has strategically divided its business into two main segments: ‘LiDAR Business’ and ‘Strategic Growth Initiatives’ (SGI). The SGI segment, focused on physical AI, is expected to start generating revenue in Q2 2026, with a projected net income of approximately 100 million RMB for the year. This strategic segmentation positions Hesai to capitalize on emerging opportunities in the AI and autonomous driving sectors.
Market Leadership and Future Projections
According to data from Gasgoo, Hesai held over 55% of the primary LiDAR market share in March 2026, maintaining its top position for 14 consecutive months. The Yole Group’s 2026 Global Automotive Market Report further confirms Hesai’s dominance, ranking it first in global ADAS primary LiDAR shipments with a 43% market share. Hesai projects its net income for Q2 2026 to be between 850 million and 900 million RMB, representing a 20% to 27% year-over-year growth.
Why This Matters to Western Investors
The partnership between Hesai and Mercedes-Benz is not just a commercial agreement; it is a strategic move that highlights the rapid advancement of Chinese technology in the autonomous driving sector. For Western investors, this partnership signals a potential shift in the global ADAS and autonomous driving landscape. As Hesai continues to dominate the market, it is crucial for investors to stay informed about these developments to make informed decisions. See our analysis on Chinese EV Market Trends for more insights.