Cepton, Inc. (NASDAQ:CPTN) is advancing its light detection and ranging (lidar) technology through a newly signed engineering contract with Koito Manufacturing, its Tier 1 automotive partner and shareholder.
Under the agreement, Koito will provide $10 million in engineering services to Cepton in support of a major global OEM program.
The program is focused on developing Cepton’s near-range lidar, which is required for Level 4 autonomous driving capabilities, for the OEM.
Cepton’s chief commercial officer Mitch Hourtienne joined Proactive to discuss the milestone and the company’s broader efforts to position itself as a beneficiary from rising demand for lidar technology.
Proactive: Exciting news out from the company about an engineering contract with a company you’ve been working with. Tell me about the news.
Mitch Hourtienne: We’ve been working with Koito Manufacturing for four years now starting with a big OEM project that we landed back in 2019. Recently, we secured another global OEM project together with Koito and kickstarted that with a pretty significant engineering services contract, resulting in $10 million in revenue for Cepton this quarter. So, you’ll start to see Cepton monetize these projects earlier in the development and this is just another big hallmark for the collaboration between Cepton and Koito.
There are lots of elements of this particular deal that show the great response to what you’re doing.
That’s right. First and foremost, it’s a testament to the OEMs placing their trust in certain technology and execution. You can see the level of investment that they’re willing to make early on in the project. It’s going to be a boost for our company and put a lot of faith in executing our technology.
Can you talk about the program this partnership is going to support?
It’s outside of North America. It’s using our near-range leader. We have a unique product portfolio where we can scale the lidar to do ultra-long range and then short range, within 30 meters, around the vehicle. For this particular program, they’ve sourced us for the near-range lidar to form a cocoon of perception around the cab of the vehicle. The program will use multiple, short-range light arms forming a 360-degree view and augmenting camera and radar. It will start in about two and a half to three years. This is typical for automotive programs, and it is a Level 4, autonomous application.
Can you give us an update on some of the other OEM engagements that you have?
We have always been engaged with the top 10 global OEMs in North America and Europe and the big three in Japan. We’re very close to the finish line with a top 10 global OEM today. As we announced on our earnings call, we expect a decision before our next earnings call. We’ve also responded to a top three global OEM with both our long-range lidar and near-range lidar.
I want to ask about StudioViz, a lidar simulator you’ve recently launched. Tell me what this means for the company.
These simulators are often required by the OEMs for their development process. We developed a customized version for some early projects and found we could save the OEMs money by reducing the number of data collection cycles they have to execute and also get them started earlier on the development with our unique scan pattern and our upgraded light arms. This is really a software ecosystem product that complements our lidar hardware.
This is an exciting time for the company. How are you feeling as you’re taking these steps?
We’re seeing a convergence in the industry. There have been some delays here and there but the appetite for lidar is there among all the OEMs. There was a ruling last week encouraging the adoption of new technologies by 2029 to reduce pedestrian deaths, which is another tailwind for our industry. We are very optimistic the OEMs will be deploying this in mass volumes by the end of the decade.
Quotes have been edited for clarity and style