How a Billion-Dollar Autonomous Vehicle Startup Lost Its Way

Quanergy Systems Inc. found itself in the center of a sudden frenzy over self-driving cars in 2014. It makes lidar, which bounces lasers off objects to help autonomous cars know what’s nearby. That September, the fledgling company announced a partnership with Mercedes-Benz that would put its devices on cars the automaker was using to test autonomous driving features. The deal established an enviable partnership with one of the world’s most prominent auto brands. In January 2015, the two companies showed off a Mercedes E350 sedan outfitted with Quanergy’s lidar devices at the Consumer Electronics Show in Las Vegas.

At the time, the lidar industry was dominated by Velodyne Lidar Inc., which provided the bulky, expensive sensors Google was using on its autonomous cars. Quanergy made the kind of promise Silicon Valley was built on: it’d shrink existing hardware through science, then sell it at a fraction of the price. Quanergy led the pack, as investors poured money into companies describing new techniques for lidar devices. It has raised $160 million to date at a peak valuation of more than $1.5 billion. Last fall, Quanergy began talking to banks about a potential IPO, setting it up to be one of the first public companies to emerge from the wave of firms making tech for autonomous vehicles.