In early 2023, Luminar was using excessive. After going public throughout the pandemic and scoring a key cope with Volvo, the corporate had added Mercedes-Benz and Polestar as prospects of its “lifesaving” lidar sensors. Founder and CEO Austin Russell referred to as it an “inflection level,” as Luminar prepped to have these sensors built-in into the primary manufacturing automobiles.
Volvo particularly was all in on the know-how. The Swedish automaker, which spent many years constructing a model across the concept of constructing the most secure automobiles, 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 dump 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 cope with Volvo got here aside — and the way its undoing helped push the once-promising startup over the sting.
Huge guarantees, then large revisions
Luminar made “substantial up-front investments in tools, services, and workforce” to satisfy the demand from Volvo again in 2022, in line 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 in all Luminar’s legal professionals stated throughout the first listening to within the chapter case on Tuesday.
However, in line 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 improvement,” the automaker stated 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 automobile’s software program in the end couldn’t use” the options, in line 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 line with Chiu.
(Mercedes-Benz struck up a brand new cope with 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 aim 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 cope with development tools firm Caterpillar. Simply two months later, Russell abruptly resigned following an ethics inquiry from Luminar’s board of administrators.
“Extra dangerous 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 Could 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 Could 2025 after Russell resigned.
In September, “Volvo delivered extra dangerous information,” Chiu wrote. The automaker determined to supply lidar as an choice on the EX90 going ahead, as a substitute of constructing it a normal characteristic as initially deliberate. Volvo additionally instructed Luminar that it was shelving lidar on future automobiles “as a cost-cutting measure.”
“This variation decreased Volvo’s estimated lifetime volumes by roughly 90%,” Chiu wrote.
Luminar instructed 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 turned public, as Luminar instructed 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 instructed TechCrunch in an announcement Tuesday that it “made this choice 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 help, enabled by the automobiles’ highly effective core computing coupled with their superior sensor set – with or and not using a lidar,” a Volvo spokesperson stated.
Luminar, in the meantime, began promoting lidar sensors meant for Volvo “to adjoining markets in an effort to get better its sunk prices,” in line with Chiu’s submitting, nevertheless it was too little too late.
“As its relationship with Volvo deteriorated, [Luminar] labored tirelessly to establish 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 on account of broader market considerations over Luminar’s monetary future.”
Now the way forward for what’s left of Luminar is within the palms of its collectors and the court docket. It’s in search of the decide’s approval to promote the semiconductor subsidiary to Quantum Computing, Inc. for $110 million, and hopes to court docket a variety of bidders for the lidar enterprise.
Luminar has already had vital curiosity within the lidar enterprise, in line with the submitting. In January, Chiu wrote, the corporate employed funding financial institution Jefferies to guage a sale after receiving an “unsolicited acquisition proposal.” Luminar acquired “further unsolicited inbound expressions of curiosity to amass the Firm” by way of the summer time and fall — together with one submitted by Russell by way of 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 stated it’s “deep into the sale course of” and “in negotiations with” a number of potential bidders.
This story has been up to date with an announcement from Volvo and knowledge from Luminar’s first chapter listening to.