Executive Summary / Key Takeaways

• Differentiated FMCW Technology Driving Adoption: Aeva Technologies is pioneering 4D LiDAR-on-chip technology, which measures instant velocity in addition to depth and reflectivity, offering superior performance (e.g., interference immunity, micron-level precision) over traditional Time-of-Flight LiDAR and positioning it as a critical enabler for advanced automation across diverse markets.
• Accelerating Commercial Traction and Strategic Wins: The company has achieved significant milestones, including completing a development program with a top 10 global passenger OEM and entering late-stage production negotiations, securing a multiyear industrial production win with The Indoor Lab, and expanding into precision sensing and Intelligent Transportation Systems.
• Robust Liquidity for Scaled Execution: Recent strategic investments, including $32.5 million from LG Innotek and $100 million in convertible notes from Apollo Global Management , have significantly bolstered Aeva's pro forma liquidity to approximately $270 million, providing a multi-year runway to fund operations and scale manufacturing.
• Strong Growth Outlook with Financial Discipline: Aeva projects 70% to 100% year-over-year revenue growth in 2025, driven by increasing product shipments, while simultaneously targeting a 10% to 20% reduction in non-GAAP operating expenses, reflecting a transition from heavy R&D to commercialization.
• Competitive Positioning and Market Expansion: Aeva's chip-based architecture and versatile platform allow it to target high-volume opportunities in automotive (Level 3/4), industrial automation (precision sensing, robotics), and security, leveraging its technological edge against competitors and aiming to establish its FMCW solution as an industry standard.

The Dawn of 4D Perception: Aeva's Foundational Shift in Sensing

Aeva Technologies, Inc. (NASDAQ:AEVA), founded in 2017, embarked on a mission to redefine perception systems by developing a market-leading 4D LiDAR-on-chip technology. Unlike conventional 3D LiDAR, which primarily measures depth and reflectivity using Time-of-Flight (ToF) technology, Aeva's proprietary Frequency Modulated Continuous Wave (FMCW) sensing directly measures instant velocity for every point in addition to depth, reflectivity, and inertial motion. This fundamental technological difference forms the bedrock of Aeva's strategy to enable advanced perception across a broad spectrum of applications, from automated driving to industrial automation, consumer electronics, and security.

The company's history is a testament to its commitment to this differentiated approach. Early years were dedicated to overcoming significant engineering challenges in developing algorithms, software, hardware, semiconductors, and silicon photonics. This foundational work culminated in the launch of its first commercial product, Aeries II, in 2022, followed by the integrated Atlas product in early 2023. These early product successes were pivotal, leading to a historic series production win with Daimler Truck , a global leader in commercial vehicles, announced at the beginning of 2024. Aeva's strategic vision extends beyond automotive, with a deliberate expansion into industrial markets through partnerships like the one with SICK AG in 2024, aiming to integrate FMCW technology into high-precision contactless sensor solutions. The company's journey underscores a methodical approach to establishing a technological lead and then strategically expanding its market footprint.

Technological Edge: The Power of FMCW 4D LiDAR

Aeva's core technological differentiation lies in its FMCW 4D LiDAR-on-chip architecture. This advanced sensing method provides several tangible and quantifiable benefits over traditional ToF LiDAR systems. Firstly, Aeva's technology directly measures the instantaneous velocity of every pixel, a critical capability for autonomous systems that need to accurately predict the movement of objects in real-time. This is a significant advantage over ToF, which must infer velocity from multiple position measurements.

Secondly, FMCW technology is inherently immune to interference from other LiDAR sensors and direct sunlight, ensuring reliable performance in diverse and challenging operating environments. This immunity is crucial for widespread deployment in complex real-world scenarios. Aeva's sensors also achieve high resolution at long ranges, with a maximum detection range of up to 500 meters, capable of detecting pedestrians and bicycles beyond 350 meters.

The "LiDAR-on-chip" design, utilizing silicon photonics, integrates all core optical components—transmitter, detector, and lenses—onto a single silicon module. This approach significantly reduces the number of components, enabling a highly automated manufacturing process, lower costs, smaller size, and higher reliability at scale compared to complex mechanical LiDARs or fiber-optic-based systems. The custom Aeva X1 System-on-Chip (SoC) processor further integrates data acquisition, point cloud processing, scanning, and application software into a single mixed-signal chip, powering advanced perception algorithms.

Aeva's product roadmap demonstrates continuous innovation. The Atlas Ultra, unveiled at CES, offers three times the resolution and a wider field of view compared to the Atlas product, all within a 35% slimmer package. This design flexibility opens up more integration options with minimal impact on vehicle aesthetics and aerodynamics. In precision sensing, the Eve 1D and Eve 1V sensors deliver sub-micron precision for distance and sub-millimeter per second precision for motion, respectively, addressing the demanding requirements of the manufacturing automation market. These technological advancements are not merely incremental; they are foundational to Aeva's competitive moat, enabling higher average selling prices (ASPs) in certain industrial applications, driving down manufacturing costs through scalability, and solidifying its market positioning for long-term growth.

Competitive Landscape and Strategic Positioning

Aeva operates in a highly competitive and rapidly evolving sensing technology market, facing both direct and indirect rivals. As an emerging innovator, Aeva's growth trajectory appears poised to outpace some established players due to its technological edge.

Direct competitors include companies like Luminar Technologies (LAZR), Ouster (OUST), Innoviz Technologies (INVZ), and Velodyne Lidar. Luminar is recognized for its high-resolution LiDAR and strong partnerships with premium automotive OEMs, focusing on high-performance, safety-critical solutions. Ouster emphasizes cost-effective, scalable digital LiDAR for broad applicability across robotics and industrial uses. Innoviz focuses on solid-state LiDAR for mass-market automotive adoption with compact designs. Velodyne, a pioneer, has a long history and established customer base with mechanical spinning LiDAR.

Aeva's competitive strengths are rooted in its proprietary FMCW technology. Its ability to directly measure velocity, coupled with interference immunity, provides a distinct performance advantage, particularly for dynamic environments and safety-critical applications like autonomous driving. The chip-based architecture of Aeva's products, integrating all optics onto a silicon photonics module, significantly reduces component count and complexity compared to typical ToF LiDAR systems. This design simplicity makes manufacturing more straightforward and automated, potentially leading to greater efficiency and quality at scale. This technological differentiation allows Aeva to command higher ASPs in precision-demanding industrial segments and positions its solution as a "blueprint" for OEMs looking to transition from ToF to FMCW for advanced Level 3 driving.

However, Aeva faces vulnerabilities inherent to its earlier stage of commercialization. Its smaller scale compared to more mature competitors like Velodyne or Luminar could lead to higher initial manufacturing costs. While Aeva's R&D investment is substantial and drives innovation, some analysts note that its profitability and cash flow lag behind competitors who are further along in scaling. Indirect competitors, such as radar-based systems (e.g., Bosch) and camera-vision technologies (e.g., Mobileye (MBLY)), offer cheaper alternatives, potentially pressuring pricing in segments where LiDAR's advanced capabilities might be considered overkill. Aeva counters this by emphasizing superior performance for critical applications where its 4D data provides indispensable value.

Strategic partnerships are central to Aeva's competitive strategy. Collaborations with Daimler Truck , LG Innotek, SICK AG, and Bendix are crucial for market penetration, co-funding development, and scaling production. These alliances help Aeva overcome the high barriers to entry in the LiDAR industry, such as extensive R&D requirements and stringent regulatory approvals, by leveraging partners' expertise and market access.

Operational Momentum and Strategic Initiatives

Aeva's operational execution in 2025 has demonstrated significant momentum across its target markets. In the automotive sector, the company has made substantial progress on its two flagship programs. The Daimler Truck production program, for which Aeva is the exclusive long-range and ultra-long-range LiDAR supplier, remains on track for a planned market entry in 2027, with Aeva's start of production slated for 2026. Aeva has completed its deliverables for initial vehicle builds and has already received initial orders for 2026 shipments of Atlas C samples, supporting Daimler Truck's expanding vehicle fleet. This program represents a potential revenue opportunity exceeding $1 billion over its lifetime.

A pivotal development is the progress with a top 10 global passenger OEM. Aeva successfully completed the development program ahead of schedule in Q3 2025 and is now in late-stage contract negotiations for a large-scale series production award. This program focuses on integrating Aeva's Atlas Ultra sensor as a standard platform across the OEM's multiple vehicle model lines for global deployment (excluding China), enabling Level 3 driving capabilities on both highways and in cities. The launch is targeted for late 2027 or early 2028, and management anticipates this to be one of the largest opportunities in the automotive industry. This OEM's decision to transition from Time-of-Flight to FMCW is seen as a significant validation of Aeva's technology, potentially serving as a "blueprint" for other fast-follower passenger car makers. Beyond these, Aeva is engaged in RFI/RFQ stages with other OEMs, including for L2+ ADAS solutions in commercial vehicles through its partnership with Bendix.

In industrial automation and precision sensing, Aeva is rapidly expanding. The company introduced the Eve 1 line of high-precision sensors, including the Eve 1D and the new Eve 1V motion sensor, which offers sub-millimeter per second precision for contactless motion sensing. This market, estimated at $4 billion to $6 billion annually with 2 million sensors sold per year, presents a significant opportunity. Aeva has partnered with industry leaders like SICK AG, which alone sells 250,000 to 300,000 high-precision displacement sensors annually, with commercial deployments expected to begin in Q3 2025. To meet this growing demand, Aeva completed the installation and bring-up of its Eve sensor production line in Thailand in Q3 2025, with initial shipments already underway. The company aims to increase its industrial segment sensor shipments by approximately 1,000% in 2025, with a potential to reach over $100 million in annual business in this sector within the next few years.

Aeva has also secured a multiyear production supply agreement with The Indoor Lab for security applications, deploying Atlas 4D LiDAR at major U.S. airports (JFK, SFO) for AI-powered analytics. This opportunity is estimated to generate up to $50 million in revenue over the next 2-3 years, with shipments scaling in 2025. Furthermore, Aeva entered the Intelligent Transportation System (ITS) market, partnering with Sensys Gatso for mobile speed detection in Australia.

Strategic partnerships are bolstering Aeva's scaling capabilities. The collaboration with LG Innotek, announced in Q1 2025, includes a $32.5 million equity investment (closed August 2025) and LG Innotek becoming a Tier 2 manufacturing partner for the top 10 passenger OEM program. This partnership, along with a $100 million investment from Apollo Global Management in convertible senior notes (closed November 2025), provides crucial capital and manufacturing alignment. Aeva targets completing an automated, automotive-qualified production line with a capacity for 100,000+ units annually in 2025.

Financial Performance and Liquidity Profile

Aeva's financial performance in the most recent periods reflects a company in a significant growth and commercialization phase, characterized by increasing revenue alongside continued investments in scaling operations. For the three months ended September 30, 2025, total revenue increased by 59% year-over-year to $3.58 million, driven by a 21.6% increase in product revenue to $1.70 million and a 120.2% surge in non-recurring engineering (NRE) services revenue to $1.88 million. For the nine months ended September 30, 2025, total revenue grew by an impressive 96% year-over-year to $12.46 million, with product revenue up 86.1% to $8.38 million and NRE revenue up 118.5% to $4.08 million. This growth, while from a relatively low base, signals accelerating commercial traction across both automotive and industrial segments.

Despite revenue growth, Aeva continues to incur operating losses, consistent with its development-stage nature. The gross profit for Q3 2025 was $0.43 million, but the company reported a gross loss of $1.98 million for the nine months ended September 30, 2025. The TTM Gross Profit Margin stands at -18.54%. Operating expenses, while still substantial, are showing signs of efficiency. Research and development (R&D) expenses decreased by 18% in Q3 2025 and 15% for the nine months ended September 30, 2025, primarily due to reductions in material, payroll, and stock-based compensation, as major engineering activities mature. The non-GAAP operating loss for Q3 2025 declined by 13% year-over-year to $27.2 million.

Aeva has historically experienced negative cash flows from operating activities, with an accumulated deficit of $732 million as of September 30, 2025. Net cash used in operating activities for the nine months ended September 30, 2025, was $92.9 million. However, the company has significantly strengthened its liquidity position to fund its growth trajectory.

As of September 30, 2025, Aeva had $48.9 million in cash, cash equivalents, and marketable securities. This was augmented by the closing of a $32.5 million equity investment from LG Innotek in August 2025. Most recently, on November 6, 2025, Aeva closed a $100 million investment from Apollo Global Management in the form of convertible senior notes due in 2032, carrying a 4.38% annual interest rate. Including this new investment, Aeva's total pro forma liquidity stands at approximately $270 million, which management believes provides a multi-year runway to fund operations and capital expenditures. This robust capital infusion is critical for scaling manufacturing and supporting existing and future production programs.

Outlook and Key Risks

Aeva's outlook for 2025 is characterized by aggressive growth targets and a continued focus on financial discipline. The company projects revenues to grow between 70% and 100% year-over-year, reaching $15 million to $18 million, with revenue generation expected to be back-end loaded in the year. This growth is anticipated to be driven by the scaling of product shipments to both automotive and industrial customers. Concurrently, Aeva aims to reduce its non-GAAP operating expenses by 10% to 20% year-over-year, targeting a range of $95 million to $105 million. This reduction is a direct result of the completion of major engineering activities and the maturation of its product lines, allowing for a shift from heavy R&D investment to commercialization.

Key operational targets for 2025 include winning two additional programs beyond the top 10 passenger OEM, completing and releasing the C sample of its Atlas product to key customers (critical for the Daimler Truck SOP in 2026), and a substantial expansion in industrial robotics and factory automation, with a projected 1,000% increase in industrial segment sensor shipments. The company also plans to complete its automated, automotive-qualified production line with a capacity for 100,000+ units annually this year.

Despite this promising outlook, Aeva faces several pertinent risks. As an early-stage company in a rapidly evolving technology sector, it is exposed to challenges in product development and marketing, technological obsolescence, and intense competition. The long development cycles for automotive customers mean that significant resources are invested before revenue realization, and delays in customer programs could impact revenue targets and profitability. While strategic partnerships are vital for growth, there is no guarantee they will translate into increased production or new products. Furthermore, Aeva's concentrated ownership by management (approximately 37.10%) could influence corporate decisions and potentially affect stock perception. Macroeconomic factors, supply chain disruptions, and the need to achieve expected margins upon commercialization also pose risks that could necessitate further dilutive financing if not managed effectively. Some analyst views highlight concerns about minimal revenue growth, high cash burn, and valuation, suggesting that large-scale, recurring contracts are still pending for a full proof of concept.

Conclusion

Aeva Technologies stands at a pivotal juncture, transitioning from a technology development leader to an emerging commercial force in the advanced sensing market. Its core investment thesis is firmly rooted in its differentiated FMCW 4D LiDAR-on-chip technology, which offers unique advantages in instant velocity measurement, interference immunity, and scalability over traditional LiDAR solutions. This technological superiority is not merely theoretical; it is actively translating into significant commercial traction across diverse, high-value markets.

The company's strategic wins with Daimler Truck (DTG) and the impending series production award from a top 10 global passenger OEM underscore its growing influence in the automotive sector, while rapid expansion in industrial automation, security, and ITS demonstrates the versatility of its unified perception platform. Bolstered by recent capital infusions from LG Innotek and Apollo Global Management (APO), Aeva possesses the financial runway to execute its ambitious growth plans and scale its manufacturing capabilities. While challenges such as sustained operating losses and intense competition persist, Aeva's clear technological roadmap, strategic partnerships, and disciplined approach to expense management position it to capitalize on the accelerating demand for advanced perception. The successful conversion of its robust pipeline into high-volume production contracts, particularly in the coming years, will be critical in validating its long-term investment narrative and cementing its leadership in the 4D LiDAR revolution.