Volvo Cars has ended its lidar supply deal with Luminar Technologies. This move signals a real change in how Volvo wants to handle autonomous vehicle hardware, and it’s a tough hit for Luminar’s financial health.
They started working together in 2020. Luminar was set to become a key supplier for Volvo’s most advanced models, including the EX90 electric SUV.
But delays in software development and Volvo’s shifting plans have pushed Luminar’s lidar out of both the EX90 and the upcoming ES90. The timing’s rough for Luminar, which is already under fiscal pressure and facing more competition than ever.
Volvo’s Strategic Departure from Luminar
Back in 2020, both companies sounded pretty excited about lidar’s promise for safety and autonomy. For Volvo, though, waiting around for software to catch up just didn’t make sense anymore.
Eventually, Volvo pulled the plug on using Luminar’s lidar in its flagship EVs. That’s a big pivot, no question.
Impact on the EX90 and ES90 Models
Without Luminar hardware, Volvo has to rethink its advanced driver-assistance plans for the EX90 and ES90. The company’s also holding off on deciding about the next-gen “Halo” lidar system.
They’re not making any big hardware commitments until the software’s ready. It’s a cautious approach, but maybe that’s what this space needs right now.
Luminar’s Financial Strain Intensifies
After Volvo’s exit, Luminar’s in a tough spot. The company lost almost $86 million in the quarter ending September 30, 2025, and brought in just under $19 million in revenue.
They’ve only got around $74 million in cash, while debt sits at $429 million. To keep things afloat, Luminar’s planning to cut about 25% of its workforce by the end of the year.
Leadership Transition and Strategic Options
Paul Ricci took over as CEO in May, replacing founder Austin Russell. Now, Luminar’s looking at takeover offers, including one from Russell AI Labs, which is run by the former CEO.
It’s a bit ironic, but maybe not surprising. The company’s clearly scrambling to find a way forward.
Diversifying Beyond Automotive Lidar
Automotive lidar is still at the heart of what Luminar does. But they’re trying to branch out into sectors where delays aren’t as common.
Through the LSI photonics division, Luminar’s targeting:
- Aerospace—using high-precision sensing to boost navigation and safety.
- Defense—integrating lidar for threat detection and autonomous platforms.
- General autonomy—serving industrial robotics and unmanned vehicles.
Competitive Pressure in the Lidar Market
Meanwhile, Luminar’s rivals aren’t slowing down. The lidar market’s getting crowded, with companies scaling up and merging fast.
Rival Milestones
Some competitors are making big moves:
- Aeva secured $100 million in convertible loans from Apollo to speed up production for Daimler Truck.
- Scantinel Photonics got acquired by MicroVision, creating a new German-based photonics powerhouse.
- Innoviz Technologies pulled in $42.4 million in revenue last quarter, cut operating losses, and landed a production deal for Level 4 autonomous trucks.
Balancing Innovation with Viability
Lidar companies face a tricky challenge right now. They need to push technical innovation, but they also have to stay financially and operationally stable.
As autonomous tech keeps evolving, the companies that move quickly—maybe by expanding their product lines, exploring new markets, or teaming up with the right partners—will probably have the best shot at real growth.
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