How Luminar’s doomed Volvo deal helped drag the corporate out of business | TechCrunch

In early 2023, Luminar was using excessive. After going public in the course of 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 point,” as Luminar prepped to have these sensors built-in into the primary manufacturing autos.

Volvo specifically was all in on the know-how. The Swedish automaker, which spent a long time constructing a model across the thought of creating the most secure automobiles, was the primary to leap at integrating the laser-based sensors in its autos. 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 firm has already made a deal to dump one subsidiary centered round semiconductors and is trying to promote its lidar enterprise in the course of the Chapter 11 course of, which started on Monday.

The first batch of filings within the chapter case shed new mild 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.

Big guarantees, then huge revisions

Luminar made “substantial up-front investments in equipment, facilities, and workforce” to fulfill the demand from Volvo again in 2022, in keeping 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 customer, the stepping stone to introducing the company’s Iris product to the broader automotive industry,” one in every of Luminar’s attorneys mentioned in the course of the first listening to within the chapter case on Tuesday.

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

Luminar’s different offers began to bitter, too. Polestar (a subsidiary of Volvo) quietly gave up on integrating Luminar’s lidar sensors “because the vehicle’s software ultimately could not use” the options, in keeping 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 meet ambitious requirements,” in keeping 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 projects” with the German automaker on the time of chapter.)

This left Luminar with Volvo as its lone flagship buyer.

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

It wasn’t till March of this yr that Russell talked about increasing past automotive, as Luminar signed a cope with building gear firm Caterpillar. Just two months later, Russell abruptly resigned following an ethics inquiry from Luminar’s board of administrators.

“More bad news”

By Chiu’s account, Volvo saved promising that it could meet the lifetime order of 1.1 million items regardless of the diminished quantity in 2024. So Luminar saved urgent ahead beneath that assumption.

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

In September, “Volvo delivered more bad news,” Chiu wrote. The automaker determined to supply lidar as an possibility on the EX90 going ahead, as an alternative of creating it a normal characteristic as initially deliberate. Volvo additionally informed Luminar that it was shelving lidar on future autos “as a cost-cutting measure.”

“This change reduced Volvo’s estimated lifetime volumes by approximately 90%,” Chiu wrote.

Luminar informed 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 informed 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 informed TechCrunch in a press release Tuesday that it “made this decision to limit the company’s supply chain risk exposure and it is a direct result of Luminar’s failure to meet its contractual obligations to Volvo Cars.”

“The company’s products can deliver a high level of safety and driver support, enabled by the cars’ powerful core computing coupled with their advanced sensor set – with or without a lidar,” a Volvo spokesperson mentioned.

Luminar, in the meantime, began promoting lidar sensors meant for Volvo “to adjacent markets in an effort to recover its sunk costs,” in keeping with Chiu’s submitting, but it surely was too little too late.

“As its relationship with Volvo deteriorated, [Luminar] worked tirelessly to identify new customers, but was ultimately unable to enter into production with any new customers in a timely fashion,” Chiu wrote. “The public Volvo dispute also resulted in a decline in sales due to broader market concerns over Luminar’s financial future.”

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

Luminar has already had vital curiosity within the lidar enterprise, in keeping 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 “additional unsolicited inbound expressions of interest to acquire the Company” by the summer time and fall — together with one submitted by Russell by 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. During Tuesday’s listening to, a lawyer for Luminar mentioned it’s “deep into the sale process” and “in negotiations with” a number of potential bidders.

This story has been up to date with a press release from Volvo and data from Luminar’s first chapter listening to.