Aeva's program pipeline can support growth, but the current valuation already prices in substantial expectations for automotive and data center success

Overview

The report evaluates Aeva's FMCW LiDAR technology, automotive and truck programs, data center opportunities, and other non-automotive opportunities, weighing these growth prospects against competition, cash burn, and valuation. Goldman Sachs recognizes the company's industry position and program pipeline but believes the market price already reflects a meaningful degree of program success and revenue ramp-up, and therefore initiates coverage with a Neutral rating.

Core views

Goldman Sachs views Aeva as one of the leading participants in the LiDAR sector, based on factors including a production award from a global top-10 European automaker, the Daimler Trucks program, selection for NVIDIA's autonomous driving reference design, and programs in non-automotive areas such as precision automation and smart infrastructure. The company has also completed a development program with a global top-five automaker and is advancing the joint development of optical modules for a hyperscale data center customer. However, Goldman Sachs believes these opportunities are largely reflected in Aeva's valuation premium to Hesai and Innoviz, while its revenue-based valuation is also approaching that of certain optical companies. Therefore, the more important variables at present are whether the company can continue securing new design awards and execute its existing programs as expected. Aeva's core products use frequency-modulated continuous-wave (FMCW) LiDAR. Traditional time-of-flight (ToF) solutions determine distance by measuring the round-trip time of laser pulses and estimate velocity using sequential images; FMCW uses a continuous laser beam and can directly obtain velocity information for each point through frequency changes. Goldman Sachs believes FMCW may offer advantages in detection range and velocity measurement, with some Aeva configurations capable of detecting objects at distances of up to 500 meters. The company also uses silicon photonics technology to integrate lasers, semiconductor optical amplifiers, detectors, and optical processing components, which management believes can help reduce system costs. On the other hand, Aeva's target price is in the mid-to-high hundreds of dollars for passenger vehicles and in the low-to-mid $1,000 range for trucks, above the low-to-mid hundreds of dollars per unit for some scaled ToF products. Therefore, whether its technical performance translates into value that customers are willing to pay for remains important. The company does not operate its own factories; assembly is handled by companies such as Jabil, Fabrinet, and LG Innotek, while it works with foundries including TSMC and Tower Semi to manufacture semiconductor components. Transportation is the main driver of medium- to long-term volume growth. Aeva has secured a production award for a global top-10 automaker's operations outside China. Goldman Sachs expects the program to begin with one to two vehicle models and gradually expand, with initial production scheduled for 2028. As of the first quarter of 2026, the company was integrating its Atlas Ultra LiDAR with the automaker and its autonomous driving technology-stack provider. Another global top-five passenger vehicle manufacturer has awarded Aeva a development contract, which management believes could convert into a production award before year-end. The previous top-10 automaker program took approximately four to six months to progress from a development contract to a production award, but Goldman Sachs' industry research indicates that the top-five automaker may also be considering other LiDAR suppliers. In commercial vehicles, Daimler Trucks' autonomous driving platform uses Aeva's long-range and ultra-long-range LiDAR, targeting production in 2027. The company also secured a development program in June 2026 for Bendix's next-generation L2+ active safety system for commercial vehicles. Goldman Sachs expects L3-to-L5 autonomous driving adoption to increase significantly over the medium to long term, but whether LiDAR will become standard equipment on all L3+ platforms and which technologies and suppliers will ultimately prevail remain subjects of debate. Tesla's autonomous driving solution does not rely on LiDAR, Rivian's forthcoming LiDAR platform does not appear to use a Western supplier, and the Wayve solution discussed by Stellantis does not strictly require LiDAR. Although Ford and GM have discussed using LiDAR, both target 2028 production for their L3 programs, which are initially expected to cover only a limited number of vehicles. High costs and limited functional applicability have previously impeded L3 adoption. Goldman Sachs believes these functions need to support higher driving speeds and a wider variety of roads, while the detection range and capabilities of new products such as Atlas may help enable L3/L4 operation at full highway speeds. Based on forecasts for L3-to-L5 light vehicles and trucks, and assuming a representative industry LiDAR selling price of $300 to $800 per unit, Goldman Sachs estimates the global automotive and truck LiDAR market at approximately more than $1 billion by 2028 and $3 billion to $6 billion by 2030. However, because Aurora and Waymo use internally developed LiDAR, independent suppliers will not capture the entire market. At its Investor Day, Aeva estimated the potential automotive and truck market at $25 billion. Non-automotive businesses may contribute more near-term revenue and profit ahead of the lengthy automotive production cycle. Aeva states that defense, smart infrastructure, robotics, manufacturing automation, and consumer applications together account for approximately $55 billion of the $80 billion potential market presented at its Investor Day, excluding data centers. Non-automotive LiDAR generally carries higher selling prices and margins. Existing programs include a multiyear supply of Eve sensors to Nikon for automated robotic inspection and metrology, entry into industrial measurement through SICK, traffic and intersection management using CityOS LiDAR and analytics software, and its first significant defense program in partnership with Forterra. Defense has accounted for a double-digit percentage of revenue in recent quarters, although Goldman Sachs expects this revenue to be relatively volatile. Data centers represent the new direction with the greatest incremental potential, but also the greatest need for validation. In January 2026, Aeva launched a semiconductor optical amplifier product for co-packaged optics and near-packaged optics. During its second-quarter 2026 earnings call, the company announced a joint development agreement with a high-speed optical engine supplier to integrate Aeva's light source into a module for a hyperscale customer, targeting initial deployment in the second half of 2027 and volume ramp-up in 2028. The next several months will be devoted to integration, and deployment will begin only after the product is qualified. Aeva can reuse its existing semiconductor technology and may expand into products such as TOSAs. Management estimates that Aeva's share of the current joint development opportunity alone could generate several hundred million dollars in annual revenue. Goldman Sachs believes successful qualification could both lead to subsequent orders and demonstrate Aeva's ability to compete with established vendors such as Lumentum and Coherent. The company's financial position represents a core constraint beyond valuation. At the end of the second quarter of 2026, Aeva had approximately $178 million in cash, cash equivalents, and marketable securities. Over the past two years, quarterly free cash flow has been approximately negative $25 million to negative $30 million, or negative $100 million to negative $120 million annually. Goldman Sachs expects free cash flow to remain negative through at least 2028, specifically forecasting negative $110.1 million in 2026, negative $107.3 million in 2027, and negative $71.4 million in 2028. The company also has a standby financing facility of up to $125 million in non-voting preferred shares, which pay quarterly dividends at an annual rate of 7%. Goldman Sachs' model assumes the company issues common equity in 2027 rather than drawing on the preferred-share financing. The company also has $100 million in aggregate principal amount of 4.375% convertible notes due in 2032, with an initial conversion price of $15.8643 per share. Full conversion would add approximately 6 million shares, which are not currently included in diluted shares because of the impact of anti-dilution provisions. Goldman Sachs forecasts Aeva's revenue increasing from $18.1 million in 2025 to $32.6 million in 2026, $68.0 million in 2027, and $215.0 million in 2028, corresponding to revenue growth of 80.6%, 108.3%, and 216.2% from 2026 through 2028. EBITDA is forecast at negative $133.1 million, negative $136.7 million, and negative $100.2 million over the same period, while EBIT is forecast at negative $138.5 million, negative $142.5 million, and negative $106.4 million, indicating that despite rapid revenue growth, the company will remain operationally unprofitable at the end of the forecast period. EPS forecasts including stock-based compensation for 2026 through 2028 are negative $2.10, negative $1.95, and negative $1.35, respectively; excluding stock-based compensation, they are negative $1.57, negative $1.40, and negative $0.80. Goldman Sachs' EBIT forecasts are broadly in line with consensus, while its projected EPS losses are smaller because the model assumes greater share dilution from equity grants and financing. Goldman Sachs also notes that both its own forecasts and market forecasts through 2028 already assume that existing automotive and data center programs reach targeted volumes and that the company succeeds in securing some incremental business or content share. In terms of valuation, Aeva trades at 36.4 times, 19.6 times, and 7.1 times EV/sales based on 2026, 2027, and 2028 forecasts, respectively. Its valuation is higher than Innoviz's and broadly in line with Ouster and Lumentum based on Goldman Sachs' 2028 forecast, which includes more than $100 million in data center-related revenue. The $20 12-month price target uses probability-weighted scenarios: the base case has a 90% weighting and yields $19 by discounting a 7 times enterprise-value multiple on 2028 sales, with award progress supporting a premium to peers; the bull case has a 5% weighting, assumes 2028 sales are twice the base-case level, and yields $48 by discounting a 9 times enterprise-value multiple; the bear case has a 5% weighting, assumes 2028 sales are half the base-case level, and yields $4 by discounting a 3 times enterprise-value multiple. The price target implies potential upside of 9.3% relative to the $18.29 reference price, below the 16% median upside for companies covered by Goldman Sachs, supporting the Neutral rating.

Analysis framework

The report first compares the operating principles, performance, and pricing of FMCW and ToF LiDAR, and then reviews the award and production timelines of automotive, truck, industrial, defense, and data center programs. Goldman Sachs subsequently estimates the transportation LiDAR market using L3-to-L5 adoption rates and industry selling prices, develops revenue, loss, and cash-flow forecasts for 2026 through 2028 based on the scale of the company's programs and management commentary, and assesses cash reserves, financing instruments, and potential dilution. Finally, the report compares Aeva's forward revenue multiples with LiDAR and optical peers and determines the price target through probability weighting of base, bull, and bear sales scenarios.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Market sizing driven by autonomous driving adoption and LiDAR selling prices

  Goldman Sachs uses projected regional adoption of L3-to-L5 light vehicles and trucks as the demand basis and multiplies this by a representative industry selling price of $300 to $800 per unit to estimate the global transportation LiDAR market in 2028 and 2030, while deducting the portion potentially captured by internally developed LiDAR.

• Industry/Sector Analysis FrameworkSubstitution Effect Analysis

  Comparison of FMCW, ToF, and autonomous driving solutions without LiDAR

  The report compares FMCW and ToF in terms of ranging, velocity measurement, cost, and customer awards, while also considering the potential substitution of demand for independent LiDAR suppliers by Tesla, Wayve, and automakers' internally developed solutions.

• Valuation Method

  Probability-weighted EV/2028 sales scenario valuation

  Goldman Sachs applies enterprise-value multiples of 7 times, 9 times, and 3 times to base, bull, and bear 2028 sales, respectively, discounts the resulting values, and weights them by probabilities of 90%, 5%, and 5% to derive a 12-month price target of $20.

• Company Fundamentals and Financial FrameworkFree cash flow analysis

  Analysis of cash burn, liquidity, and financing dilution

  The report combines quarterly free cash flow burn with existing cash, standby preferred-share financing, an expected common-share issuance, and potential conversion of convertible notes to assess the company's financing needs and equity dilution risk before revenue ramps.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Aeva Technologies Inc. (AEVA.US)

  FMCW LiDAR awards and data center optical-module opportunities could drive medium- to long-term revenue growth, but the current valuation already reflects substantial expectations of success.

  Strengths

  Progress with a global top-10 European automaker, Daimler Trucks, Nikon, SICK, Forterra, and other programs; selection for NVIDIA's autonomous driving reference design; FMCW offers potential advantages in range and per-point velocity measurement, while silicon photonics and semiconductor optical amplifier technology can be reused in data centers.

  Weaknesses

  Target automotive product prices exceed those of some scaled ToF solutions, operating losses and free cash flow are expected to remain negative throughout the forecast period, and commercial revenue remains highly dependent on programs that have not yet entered full production.

  Comparison

  The valuation is higher than Innoviz's and broadly in line with Ouster and Lumentum based on 2028 forecasts. In automotive, the company also competes with Hesai, RoboSense, and internally developed technology from Aurora and Waymo; in data centers, it competes with Lumentum and Coherent.

  Risks

  Insufficient new awards, program execution or qualification failures, lower-than-expected selling prices, intensifying competition, higher trade and component costs, and equity dilution from financing and convertible notes.

Key data

• 12-month price target$20.00Implies potential upside of 9.3% relative to the $18.29 reference price
• Revenue forecast2026E $32.6 mn; 2027E $68.0 mn; 2028E $215.0 mnCorresponding to year-over-year growth of 80.6%, 108.3%, and 216.2%
• EPS forecast including stock-based compensation2026E -$2.10; 2027E -$1.95; 2028E -$1.35Excluding stock-based compensation, -$1.57, -$1.40, and -$0.80, respectively
• Free cash flow forecast2026E -$110.1 mn; 2027E -$107.3 mn; 2028E -$71.4 mnGoldman Sachs expects free cash flow to remain negative throughout the forecast period
• Liquidity at the end of the second quarter of 2026Approximately $178 mnTotal cash, cash equivalents, and marketable securities
• Transportation LiDAR market estimateApproximately $1+ bn in 2028; $3-6 bn in 2030Based on forecasts for L3-to-L5 light vehicles and trucks and a representative selling price of $300-$800 per unit
• Top-10 automaker programInitial production in 2028Goldman Sachs expects initial coverage of one to two vehicle models, followed by gradual expansion
• Daimler Trucks programTargeting production in 2027Supplying long-range and ultra-long-range LiDAR
• Data center joint development programInitial deployment in the second half of 2027; volume ramp-up in 2028Management estimates that Aeva's annual revenue potential from this opportunity could reach several hundred million dollars
• EV/sales2026E 36.4 times; 2027E 19.6 times; 2028E 7.1 timesGoldman Sachs believes existing program progress supports a valuation premium to certain LiDAR peers
• Convertible notes$100 mn, 4.375% coupon, due in 2032Initial conversion price of $15.8643; full conversion would add approximately 6 million shares

Impact & implications

The report believes Aeva has demonstrated the commercial appeal of its FMCW technology through automotive, truck, and non-automotive programs, while data centers provide a new growth avenue beyond the traditional LiDAR market. However, the market valuation and forecasts through 2028 already incorporate a high degree of program success, making future share-price performance more dependent on new production awards, data center qualification, and the timely ramp-up of existing programs. Meanwhile, continued negative free cash flow means equity financing may still be required before revenue growth materializes, resulting in dilution.

Risks

• If the number of production awards secured in automotive and non-automotive markets is higher or lower than expected, revenue and valuation could rise or fall accordingly.
• Existing forecasts already incorporate a certain degree of success for automotive and data center programs; production ramp-up, target volumes, or product qualification falling short of expectations would create downside risk.
• If the actual selling price per LiDAR unit is higher or lower than expected, revenue and the related valuation could rise or fall accordingly.
• Automotive LiDAR faces competition from Hesai, Innoviz, RoboSense, and automakers' internally developed solutions, while the data center business faces competition from established vendors such as Lumentum and Coherent.
• Third parties such as Jabil and Fabrinet manufacture products in Mexico, Asia-Pacific, and other regions, and adverse trade policies could increase costs.
• Higher- or lower-than-expected prices for metals, semiconductors, and other components could create downside or upside, respectively.
• Free cash flow is expected to remain negative in the near to medium term, and additional financing could cause equity dilution.

What to watch

• Monitor whether the development contract with a global top-five passenger vehicle manufacturer converts into a production award before year-end.
• Monitor whether the top-10 automaker program begins production as scheduled in 2028 and gradually expands from the initial one to two vehicle models.
• Monitor whether the Daimler Trucks program enters production in 2027 and the subsequent conversion of the Bendix development program.
• Monitor integration and qualification progress for the data center optical module over the next several months, initial deployment in the second half of 2027, and volume ramp-up in 2028.
• Monitor new automotive and non-automotive design awards, as the report believes major awards have historically been important catalysts for LiDAR companies' share prices.
• Monitor cash burn, the assumed common-equity financing in 2027, and dilution from potential conversion of the convertible notes.
• Monitor whether L3-and-above autonomous driving functions can expand to higher speeds and more roads, as well as the actual scope of automakers' LiDAR adoption.