By Al Root

The world is better in color.

Lidar maker Ouster unveiled an important new product that might even get Elon Musk to reconsider his position on the technology.

Monday, Ouster unveiled its REV8 family of lidars that see in color. The company has fused camera-like technology with lidar, which is essentially laser-based radar, at the microchip level.

That's a big deal. It eliminates the sensor-fusion problem that is part of the reason Tesla CEO Elon Musk doesn't like lidars. Tesla, famously, uses only optical cameras for its self-driving technology. Alphabet's Waymo uses a suite of sensors, including lidars and cameras.

Multiple sensing modalities, however, need to be fused together and agree. What does a self-driving car do if it sees something with the lidar sensor, but the camera misses it?

"I'm here to obviate sensor fusion," Ouster CEO Angus Pacala tells Barron's. Color lidar is "fused by physics rather than fused by software."

The implications for self-driving technology are important. Road signs are in color. Of course, a lidar can identify an octagon and measure its distance. Still, it's better if the lidar knows the octagon is red.

Ouster's technology gives technology developers a single sensing option that merges camera-level tech with lidar.

Investors are impressed. Ouster stock traded as high as $30.40 on Monday before settling at $27.20, up 2.8%, while the S&P 500 and Dow Jones Industrial Average were down 0.5% and 0.9%, respectively.

Gains leave Ouster stock up 241% over the past 12 months.

Investors get a chance to hear from Ouster on Tuesday when the company reports first-quarter earnings after the close of trading. Wall Street is looking for sales of $46.2 million, according to FactSet, up from $32.6 million a year ago.

Convincing Musk to use lidar, however, will be no easy task. Musk was asked by Morgan Stanley's Adam Jonas about lidar in January: "You've said in the past about lidar for EVs, that lidar is a crutch, a fool's errand. I think you even told me once, even if it was free, you'd say you wouldn't use it. Do you still feel that way?"

"Yes," was Musk's response. He elaborated a little, calling lidar the wrong solution for self-driving cars, pointing out that humans drive with eyes and a brain, which is fundamentally Tesla's approach to self-driving technology.

The good news for the industry is that other auto makers have embraced lidar. Now that technology is in color.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 04, 2026 13:06 ET (17:06 GMT)

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