How Luminar’s doomed Volvo deal helped drag the company into bankruptcy

In aboriginal 2023, Luminar was riding high. After going nationalist during the pandemic and scoring a cardinal woody with Volvo, the institution had added Mercedes-Benz and Polestar arsenic customers of its “life-saving” lidar sensors. Founder and CEO Austin Russell called it an “inflection point,” arsenic Luminar prepped to person those sensors integrated into the archetypal accumulation vehicles.

Volvo successful peculiar was all-in connected the technology. The Swedish automaker, which spent decades gathering a marque astir the thought of making the safest cars, was the archetypal to leap astatine integrating the laser-based sensors successful its vehicles. Volvo initially tapped Luminar to supply 39,500 lidar sensors implicit the beingness of a woody signed successful 2020. In 2021, Volvo upped that to 673,000. And successful 2022, Volvo upped it again, this clip to 1.1 cardinal sensors.

Three years later, Luminar is now successful bankruptcy. The institution has already made a deal to merchantability disconnected 1 subsidiary centered astir semiconductors, and is looking to merchantability its lidar concern during the Chapter 11 process, which began connected Monday.

The archetypal batch of filings successful the bankruptcy lawsuit shed caller airy connected however Luminar’s cornerstone woody with Volvo came isolated — and however its undoing helped propulsion the once-promising startup implicit the edge.

Luminar made “substantial up-front investments successful equipment, facilities, and workforce” to conscionable the request from Volvo backmost successful 2022, according to a declaration written by Luminar’s newly-hired main restructuring serviceman Robin Chiu. It built retired a manufacturing installation successful Monterrey, Mexico, and spent astir $200 cardinal to hole to marque its Iris lidar sensors for Volvo’s EX90 SUV.

But, according to Chiu, problems were already brewing with Volvo. The automaker delayed the EX90 SUV due to the fact that it needed to bash much “software investigating and development,” the automaker said successful 2023. And successful aboriginal 2024, Luminar says Volvo reduced its expected measurement for Iris sensors by 75%. (Volvo did not instantly respond to a petition for comment.)

Luminar’s different deals started to sour, too. Polestar (a subsidiary of Volvo) softly gave up connected integrating Luminar’s lidar sensors “because the vehicle’s bundle yet could not use” the features, according to Chiu. Mercedes-Benz terminated its statement to bargain Luminar’s Iris sensors successful November 2024 due to the fact that the lidar-maker “failed to conscionable ambitious requirements,” according to Chiu.

(Mercedes-Benz struck up a caller woody with Luminar successful March 2025 for its next-generation Halo lidar, but Chiu wrote that Luminar has “no go-forward projects” with the German automaker astatine the clip of bankruptcy.)

This near Luminar with Volvo arsenic its lone flagship customer.

The institution ne'er diversified overmuch beyond the automotive industry, shunning different applications similar defence oregon robotics. In fact, Russell had founded Luminar successful 2012 with the extremity of taking lidar retired of those sectors and into automotive to assistance accelerate the adoption of autonomous vehicles.

It wasn’t until March of this twelvemonth that Russell talked astir expanding beyond automotive, arsenic it signed a woody with operation instrumentality institution Caterpillar. Just 2 months later, Russell abruptly resigned pursuing an morals enquiry from Luminar’s committee of directors.

By Chiu’s account, Volvo kept promising that it would conscionable the beingness bid of 1.1 cardinal units contempt the reduced measurement successful 2024. So Luminar kept pressing guardant nether that assumption.

But signs of accent were showing. Luminar laid disconnected 20% of its workforce successful May 2024 and outsourced much of its lidar sensor manufacturing. It deepened those cuts and restructured immoderate of its concern successful September 2024. Another circular of layoffs came successful May 2025 after Russell resigned.

In September, “Volvo delivered much atrocious news,” Chiu wrote. The automaker decided to connection lidar arsenic an enactment connected the EX90 going forward, alternatively of making it a modular diagnostic arsenic primitively planned. Volvo besides told Luminar that it was shelving lidar connected aboriginal vehicles “as a cost-cutting measure.”

“This alteration reduced Volvo’s estimated beingness volumes by astir 90%,” Chiu wrote.

Luminar told Volvo connected October 3 that it considered this a breach of the statement the companies had archetypal signed successful 2020. On October 31, the quality became public, arsenic Luminar told shareholders successful a regulatory filing that it was suspending sensor shipments to Volvo. The Swedish automaker sent Luminar a missive 2 weeks later, terminating the agreement.

Luminar had started selling lidar sensors meant for Volvo “to adjacent markets successful an effort to retrieve its sunk costs,” according to Chiu’s filing, but it was excessively small excessively late.

“As its narration with Volvo deteriorated, [Luminar] worked tirelessly to place caller customers, but was yet incapable to participate into accumulation with immoderate caller customers successful a timely fashion,” Chiu wrote. “The nationalist Volvo quality besides resulted successful a diminution successful income owed to broader marketplace concerns implicit Luminar’s fiscal future.”

Now the aboriginal of what’s near of Luminar is successful the hands of its creditors and the court. It’s seeking the judge’s support to merchantability the semiconductor subsidiary to Quantum Computing, Inc. for $110 million, and hopes to tribunal a fig of bidders for the lidar business.

Luminar has already had important involvement successful the lidar business, according to the filing. In January, Chiu wrote, Luminar hired concern slope Jefferies to measure a merchantability aft receiving an “unsolicited acquisition proposal.” Luminar received “additional unsolicited inbound expressions of involvement to get the Company” done the summertime and autumn — including 1 submitted by Russell done his caller AI laboratory successful October.

As TechCrunch reported Monday, Russell plans to support bidding connected Luminar’s remains arsenic the bankruptcy lawsuit moves forward.