How Luminar's doomed Volvo deal helped drag the corporate out of business

[ad_1] In early 2023, Luminar was using excessive. After going public throughout the pandemic and scoring a key take care of Volvo, the corporate had added Mercedes-Benz and Polestar as prospects of its “lifesaving” lidar sensors. Founder and CEO Austin Russell known as it an “inflection level,” as Luminar prepped to have these sensors built-in into the primary manufacturing automobiles.

Volvo specifically was all in on the expertise. The Swedish automaker, which spent a long time constructing a model across the thought of constructing the most secure vehicles, was the primary to leap at integrating the laser-based sensors in its automobiles. Volvo initially tapped Luminar to supply 39,500 lidar sensors over the lifetime of a deal signed in 2020. In 2021, Volvo upped that to 673,000. And in 2022, Volvo upped it once more, this time to 1.1 million sensors.

Three years later, Luminar is now in chapter. The corporate has already made a deal to unload one subsidiary centered round semiconductors and is trying to promote its lidar enterprise throughout the Chapter 11 course of, which started on Monday.

The primary batch of filings within the chapter case shed new gentle on how Luminar’s cornerstone take care of Volvo got here aside — and the way its undoing helped push the once-promising startup over the sting.

Massive guarantees, then massive revisions

Luminar made “substantial up-front investments in tools, services, and workforce” to satisfy the demand from Volvo again in 2022, in accordance with a declaration written by Luminar’s newly employed chief restructuring officer Robin Chiu. It constructed out a producing facility in Monterrey, Mexico, and spent almost $200 million to arrange to make its Iris lidar sensors for Volvo’s EX90 SUV.

“Volvo was going to be a marquee buyer, the stepping stone to introducing the corporate’s Iris product to the broader automotive business,” one among Luminar’s legal professionals mentioned throughout the first listening to within the chapter case on Tuesday.

However, in accordance with Chiu, issues have been already brewing with Volvo. The automaker delayed the EX90 SUV as a result of it wanted to do extra “software program testing and growth,” the automaker mentioned in 2023. And in early 2024, Luminar says Volvo decreased its anticipated quantity for Iris sensors by 75%.

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Luminar’s different offers began to bitter, too. Polestar (a subsidiary of Volvo) quietly gave up on integrating Luminar’s lidar sensors “as a result of the car’s software program in the end couldn't use” the options, in accordance with Chiu. Mercedes-Benz terminated its settlement to purchase Luminar’s Iris sensors in November 2024 as a result of the lidar-maker “failed to satisfy bold necessities,” in accordance with Chiu.

(Mercedes-Benz struck up a brand new take care of Luminar in March 2025 for its next-generation Halo lidar, however Chiu wrote that Luminar has “no go-forward tasks” with the German automaker on the time of chapter.)

This left Luminar with Volvo as its lone flagship buyer.

The corporate by no means diversified a lot past the automotive business, shunning different functions like protection or robotics. Actually, Russell had based Luminar in 2012 with the purpose of taking lidar out of these sectors and into automotive to assist speed up the adoption of autonomous automobiles.

It wasn’t till March of this 12 months that Russell talked about increasing past automotive, as Luminar signed a take care of development tools firm Caterpillar. Simply two months later, Russell abruptly resigned following an ethics inquiry from Luminar’s board of administrators.

“Extra unhealthy information”

By Chiu’s account, Volvo stored promising that it might meet the lifetime order of 1.1 million models regardless of the decreased quantity in 2024. So Luminar stored urgent ahead beneath that assumption.

However indicators of stress have been displaying. Luminar laid off 20% of its workforce in Might 2024 and outsourced extra of its lidar sensor manufacturing. It deepened these cuts and restructured a few of its enterprise in September 2024. One other spherical of layoffs got here in Might 2025 after Russell resigned.

In September, “Volvo delivered extra unhealthy information,” Chiu wrote. The automaker determined to supply lidar as an possibility on the EX90 going ahead, as an alternative of constructing it a typical function as initially deliberate. Volvo additionally advised Luminar that it was shelving lidar on future automobiles “as a cost-cutting measure.”

“This transformation decreased Volvo’s estimated lifetime volumes by roughly 90%,” Chiu wrote.

Luminar advised Volvo on October 3 that it thought of this a breach of the settlement the businesses had first signed in 2020. On October 31, the dispute grew to become public, as Luminar advised shareholders in a regulatory submitting that it was suspending sensor shipments to Volvo. The Swedish automaker despatched Luminar a letter two weeks later, terminating the settlement.

Volvo advised TechCrunch in a press release Tuesday that it “made this determination to restrict the corporate’s provide chain danger publicity and it's a direct results of Luminar’s failure to satisfy its contractual obligations to Volvo Automobiles.”

“The corporate’s merchandise can ship a excessive degree of security and driver assist, enabled by the vehicles’ highly effective core computing coupled with their superior sensor set – with or with no lidar,” a Volvo spokesperson mentioned.

Luminar, in the meantime, began promoting lidar sensors meant for Volvo “to adjoining markets in an effort to get well its sunk prices,” in accordance with Chiu’s submitting, but it surely was too little too late.

“As its relationship with Volvo deteriorated, [Luminar] labored tirelessly to determine new prospects, however was in the end unable to enter into manufacturing with any new prospects in a well timed style,” Chiu wrote. “The general public Volvo dispute additionally resulted in a decline in gross sales as a consequence of broader market considerations over Luminar’s monetary future.”

Now the way forward for what’s left of Luminar is within the arms of its collectors and the courtroom. It’s in search of the choose’s approval to promote the semiconductor subsidiary to Quantum Computing, Inc. for $110 million, and hopes to courtroom quite a lot of bidders for the lidar enterprise.

Luminar has already had important curiosity within the lidar enterprise, in accordance with the submitting. In January, Chiu wrote, the corporate employed funding financial institution Jefferies to judge a sale after receiving an “unsolicited acquisition proposal.” Luminar acquired “extra unsolicited inbound expressions of curiosity to amass the Firm” via the summer season and fall — together with one submitted by Russell via his new AI lab in October.

As TechCrunch reported Monday, Russell plans to maintain bidding on Luminar’s stays because the chapter case strikes ahead. Throughout Tuesday’s listening to, a lawyer for Luminar mentioned it's “deep into the sale course of” and “in negotiations with” a number of potential bidders.