Executive Summary / Key Takeaways

• Differentiated Technology Driving Diversification: Aeva Technologies is leveraging its proprietary Frequency Modulated Continuous Wave (FMCW) 4D LiDAR-on-chip technology to penetrate and expand across multiple high-growth markets, including automotive, industrial automation, security, and intelligent transportation systems, moving beyond traditional Time-of-Flight (ToF) LiDAR limitations.
• Accelerating Commercial Momentum: The company has secured significant production and development wins, notably with Daimler Truck (DTG) and a global top 10 passenger OEM, alongside strategic industrial customers like SICK AG and LMI Technologies, demonstrating increasing market validation and demand for its unique sensing capabilities.
• Strong Revenue Growth and Operational Efficiency: Aeva projects substantial revenue growth of 70% to 100% year-over-year in 2025, driven by scaling product shipments, while simultaneously targeting a 10% to 20% reduction in non-GAAP operating expenses due to maturing product development and operational efficiencies.
• Enhanced Liquidity and Strategic Partnerships: A robust liquidity position, bolstered by a $125 million undrawn equity facility and a recent $32.5 million strategic investment from LG Innotek (011070.KS), provides a multi-year runway to fund operations and scale manufacturing capacity to 100,000+ units annually.
• Long-Term Potential Amidst Execution Risks: While Aeva's technological edge and expanding market footprint present a compelling long-term thesis, investors must monitor the company's ability to convert development programs into large-scale production, manage ongoing cash burn, and navigate intense competition and macroeconomic headwinds.

The Dawn of 4D Perception: Aeva's Strategic Foundation

Aeva Technologies, founded in 2017 by former Apple (AAPL) engineers Soroush Salehian and Mina Rezk, embarked on a mission to revolutionize perception through its Frequency Modulated Continuous Wave (FMCW) sensing technology. The company's vision centers on a 4D LiDAR-on-chip platform, designed to enable advanced perception across a broad spectrum of applications, from automated driving to consumer electronics, industrial automation, and security. This foundational technological approach underpins Aeva's overarching strategy: to deliver a superior, scalable, and cost-effective sensing solution that addresses the limitations of conventional LiDAR.

Aeva's journey from its inception to becoming a public entity in March 2021, through a business combination with InterPrivate Acquisition Corp., has been marked by a relentless focus on product development and market diversification. The introduction of its Aeries II commercial product in 2022, followed by the integrated Atlas product in early 2023, laid the groundwork for its significant entry into the automotive production market. This culminated in a historic series production win with Daimler Truck, a major global commercial vehicle manufacturer, for their autonomous truck program, with production slated for 2026. This early success validated Aeva's technology and its ability to meet stringent automotive-grade requirements.

Technological Differentiation: The FMCW Advantage

Aeva's core competitive advantage lies in its proprietary FMCW 4D LiDAR-on-chip technology, which fundamentally differentiates it from traditional Time-of-Flight (ToF) LiDAR systems. Unlike ToF, which primarily measures depth and reflectivity, Aeva's FMCW solution simultaneously measures instant velocity for every pixel, in addition to depth, reflectivity, and inertial motion. This capability is critical for applications requiring precise understanding of object movement, such as autonomous driving at highway speeds.

The tangible benefits of Aeva's FMCW technology are manifold. It offers inherent immunity to interference from other LiDAR sensors and direct sunlight, ensuring reliable performance in diverse and challenging operating conditions. The technology enables autonomous vehicles to perceive objects at significantly higher distances, up to 500 meters, a crucial metric for high-speed applications. Furthermore, for industrial applications, FMCW achieves micron-level precision, a capability largely unattainable with ToF LiDAR. This precision, combined with the ability to operate across a wide range of standoff distances (up to 200 meters) within a compact form factor, positions Aeva uniquely in the high-precision sensing market.

Aeva's product line, including Atlas and the newer Atlas Ultra, leverages a LiDAR-on-chip architecture that integrates all optical components onto a silicon photonics module. This design, which avoids the use of fibers or exotic materials, facilitates a highly automated manufacturing process, enabling mass production at affordable costs. The Atlas Ultra, specifically designed for SAE Level 3 and 4 automated driving systems, boasts three times the resolution and a wider field of view compared to Atlas, all within a 35% slimmer package. This allows for greater integration flexibility with minimal impact on vehicle styling. The custom Aeva X1 SoC (system-on-chip) processor further enhances performance by seamlessly integrating data acquisition, point cloud processing, scanning, and application software.

For investors, these technological differentiators translate into a robust competitive moat. The ability to provide instant velocity data, coupled with interference immunity and high precision, addresses critical shortcomings of legacy LiDAR systems, making Aeva's solutions highly attractive for next-generation autonomy and industrial automation. This technological superiority can command higher average selling prices (ASPs) in certain niche markets, reduce manufacturing costs through automation, improve gross margins over time, and secure a leading market position in emerging segments.

Strategic Expansion and Commercial Momentum

Building on its technological foundation, Aeva has strategically expanded its market footprint, demonstrating significant commercial momentum across diverse sectors. The company's initial success with Daimler Truck, a program valued at over $1 billion, continues to progress on track for a 2026 start of production. This partnership has deepened, with expanded collaboration to include sharing sensing data and Freightliner vehicle platform integration, advancing safety architecture for autonomous trucks.

In the passenger vehicle segment, Aeva secured a pivotal development program with a global top 10 passenger OEM for its next-generation global production vehicle platform, utilizing Atlas Ultra 4D LiDAR. This OEM, previously reliant on ToF LiDAR, is now transitioning to FMCW to "future-proof their solution," recognizing Aeva's technology as superior for expanding operating design domains at higher speeds. Aeva has also secured a letter of intent from this OEM for a large-scale global production program, expected to transition later in 2025, with Atlas Ultra production slated for 2027. This opportunity is anticipated to be "massive and likely one of the largest in the automotive industry," potentially cementing Aeva's leadership.

Aeva's diversification extends significantly into industrial automation. The "Eve 1" line of high-precision laser displacement sensors is poised to disrupt the $4 billion per year laser displacement sensor market, projected to grow to $6 billion annually. Aeva has already secured strategic customers like SICK AG and LMI Technologies, with over 1,000 sensors booked for shipment in 2025. SICK AG alone commands 15% of this market, representing 300,000 units annually. Aeva expects industrial deployments to increase by "at least 1,000%" in 2025, driven by FMCW's micron-level precision. Additionally, Aeva completed final validation of its LiDAR-on-Chip in Nikon (NINOY)'s product for industrial metrology, with deliveries starting in Q4 2024, marking a "pivotal milestone" for industrial commercialization.

Beyond automotive and industrial, Aeva has successfully entered new markets. In security, it secured a multi-year production supply agreement with The Indoor Lab for deployments at major U.S. airports (JFK, SFO), with an estimated revenue potential of up to $50 million over the next two to three years. The company was also selected by a top U.S. National Defense Security organization to protect critical energy infrastructure. In Intelligent Transportation Systems (ITS), Sensys Gatso selected Aeva as its exclusive LiDAR supplier for mobile speed detection in Australia. Aeva's 4D LiDAR was also chosen for Germany's automated train program, leveraging its ability to detect velocity and provide GPS-independent location estimation.

A significant strategic collaboration with LG Innotek Co., Ltd. (LGIT), a global Fortune 500 technology subsidiary, further validates Aeva's platform. This partnership includes a $32.5 million equity investment and up to $17.5 million in joint product development revenue and capital investments. LGIT will take an approximately 6% equity stake and serve as a Tier 2 manufacturing partner for the top 10 passenger OEM program, accelerating Aeva's product roadmap into consumer electronics and industrial markets. Operationally, Aeva pulled forward the first shipments of its Atlas product by nearly six months in Q3 2024 to meet growing demand and aims to complete an automated, automotive-qualified production line with a capacity for 100,000+ units annually by the end of 2025.

Financial Performance and Liquidity

Aeva's financial performance reflects its stage as a company transitioning from heavy R&D to commercialization and scaling. For the three months ended June 30, 2025, Aeva reported revenue of $5.511 million, a substantial 174% increase compared to $2.012 million in the prior year period. Product revenue accounted for 76% ($4.203 million) of this, with non-recurring engineering (NRE) services contributing the remainder. For the six months ended June 30, 2025, total revenue reached $8.879 million, up 116% from $4.119 million in the same period of 2024. This growth is primarily attributed to increased unit sales and NRE revenue from the Daimler Truck program.

Despite strong revenue growth, Aeva continues to operate at a gross loss, reporting $2.720 million for Q2 2025 and $2.410 million for the six months ended June 30, 2025. This was impacted by a $3.8 million loss recognized on a joint development agreement (JDA) in Q2 2025, alongside increased production costs. The company's net loss for Q2 2025 was $192.742 million, significantly impacted by non-cash charges, including an $88.478 million change in the fair value of warrant liability and a $69.996 million fair value loss on share subscription liability related to the LGIT agreement. The accumulated deficit stood at $839.5 million as of June 30, 2025.

From a liquidity standpoint, Aeva ended Q2 2025 with $49.8 million in cash, cash equivalents, and marketable securities.

Its total available liquidity as of Q1 2025 was $206 million, which included a $125 million undrawn Standby Equity Purchase Agreement with Sylebra Capital Limited, with all conditions to draw met. This liquidity position, further strengthened by the anticipated closing of the $32.5 million LGIT equity investment in August 2025, provides management with confidence that existing funds will be sufficient to cover operating and capital expenditures for at least 12 months from the 10-Q filing date. The company's gross cash use was $29.9 million in Q2 2025 and $31.3 million in Q1 2025.

Competitive Landscape and Positioning

Aeva operates in a highly competitive LiDAR market, vying against established players like Luminar Technologies (LAZR), Velodyne Lidar (VLDR), Ouster (OUST), and Innoviz Technologies (INVZ), as well as indirect competitors offering alternative sensing technologies like radar and cameras. While competitors like Luminar have focused on high-performance automotive LiDAR with strong OEM partnerships, and Ouster on digital LiDAR for robotics and smart infrastructure, Aeva differentiates itself through its unique FMCW technology and integrated on-chip architecture.

Aeva's FMCW technology provides a distinct edge over competitors relying on Time-of-Flight (ToF) solutions. The ability to measure instant velocity, coupled with immunity to interference and superior long-range detection, has been a decisive factor in securing wins with OEMs and defense organizations that previously evaluated ToF systems. This technological superiority allows Aeva to address critical use cases for next-generation autonomy that ToF struggles with, such as high-speed highway driving and precise object classification.

However, Aeva faces competitive disadvantages stemming from its relatively smaller scale and earlier stage of commercialization compared to some rivals. While its technology is highly innovative, it has historically lagged in revenue growth and profitability compared to more established players like Luminar and Velodyne, which have benefited from longer market presence and broader customer bases. Aeva's financial ratios, such as its TTM Gross Profit Margin of -28.64% and Net Profit Margin of -2178.31%, indicate significant unprofitability, contrasting with Ouster's positive TTM Gross Profit Margin of 36%. Its P/S ratio of 57.42 also suggests a high valuation relative to current sales, reflecting market anticipation of future growth rather than current performance.

Aeva's strategy to diversify across automotive, industrial, and other applications is a direct response to competitive pressures, aiming to leverage its core technology across multiple revenue streams. The company's focus on on-chip integration and automated manufacturing is designed to achieve cost efficiencies and scalability that can eventually compete with the broader market penetration of rivals. The strategic collaboration with LG Innotek, a major technology and manufacturing leader, further strengthens Aeva's competitive standing by providing manufacturing expertise and market access, particularly for consumer electronics.

Outlook, Guidance, and Risks

Aeva's outlook for 2025 signals a pivotal year for commercialization and scaling. The company targets full-year revenue in the range of $15 million to $18 million, representing a significant 70% to 100% year-over-year growth compared to 2024, driven by scaling product shipments to automotive and industrial customers. This guidance, which does not yet incorporate the full impact of the LGIT strategic collaboration, is expected to be back-end loaded. Management's confidence is bolstered by achieving "essentially all" of its challenging 2024 objectives, including exceeding 100% revenue growth.

Simultaneously, Aeva is committed to financial discipline, targeting a 10% to 20% year-over-year reduction in non-GAAP operating expenses, aiming for a range of $95 million to $105 million. This reduction is attributed to the completion of major engineering activities and the maturing commercialization of its products, allowing for lower one-time development costs. The company plans to complete its automated and automotive-qualified production line with a capacity for 100,000+ units annually in 2025, a critical step for meeting increasing demand and upcoming commercial deployments. Key milestones for 2025 include the release of the Atlas C sample to key customers, keeping the Daimler Truck program on track for its 2026 SOP, and targeting two additional program wins beyond the top 10 passenger OEM.

Despite the optimistic outlook, Aeva faces several pertinent risks. Its growth depends heavily on the successful execution and realization of benefits from strategic partnerships, such as the one with LGIT. Any failure to establish or maintain these relationships could impair its ability to compete and grow revenue. The company's concentrated management ownership (approximately 49.4% of outstanding common stock) could affect stock perception and influence corporate decisions, potentially delaying a change of control. Furthermore, Aeva must maintain an effective system of internal controls, especially as it becomes subject to auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act by December 31, 2025. Macroeconomic conditions, including inflation and supply chain disruptions, also pose ongoing risks to pricing, margins, and market share. The protracted development cycles for automotive programs mean significant resources are invested before revenue is realized, and delays could necessitate additional, potentially dilutive, capital raises.

Conclusion

Aeva Technologies stands at a critical juncture, poised to capitalize on its highly differentiated FMCW 4D LiDAR technology. The company's strategic pivot towards broad market diversification, coupled with significant wins in automotive, industrial, and security sectors, underscores a compelling narrative of technological leadership and accelerating commercial momentum. While Aeva continues to incur losses as it scales, its robust liquidity, disciplined expense management, and ambitious manufacturing capacity targets provide a clear pathway towards future profitability.

The core investment thesis for Aeva hinges on its ability to convert its technological superiority into widespread adoption and large-scale production. The shift of major OEMs from ToF to FMCW, driven by the need for enhanced perception capabilities, positions Aeva as a key enabler of next-generation autonomous systems. Investors should closely monitor the successful transition of development programs into high-volume production, the continued expansion of its industrial footprint, and the effective management of its cash burn, as these factors will be crucial in determining Aeva's long-term success in the evolving perception market.