Chinese lidar sensor startup Hesai saw a significant drop in its gross margin, from 52.4% to 30%, in the fourth quarter of 2022, after shifting its focus to producing more affordable lidar sensors for production cars. The company’s earnings report released on Thursday revealed that its shipments over the quarter rose by 739% year-on-year to 47,515 units as Li Auto, one of its major clients, ramped up delivery of its L9 and L8 crossovers equipped with Hesai’s laser sensors. The Shanghai-based company also supplies higher-margin sensors to autonomous car developers such as Baidu, one of its major shareholders, which still maintain an average gross margin of over 50%, Louis T. Hsieh, the company’s CFO, told an earnings call. [Hesai earnings report]