Volvo announce parting ways with Lidar company; what went wrong?
Volvo have backed down from their partnership with Lidar, with the former alleging a lack of supply of hardware. The Swedish brand initially had stated that they were dropping the systems by startup from their cars as standard and making them optional instead.
New Delhi: Sometime ago, Volvo and Luminar were a smooth sailing partnership. In the Swedish carmaker's push towards a safety-first approach, Volvo used the startup’s laser-based sensors in order to make their vehicles safer than before. Volvo was confident with the tech and had gone on to say that they would make the tech standard on their flagship electric EX90 SUV and ES90 sedan.
However, the brand is backing out of this and Luminar, of course not too pleased with this. Volvo told Reuters on Monday that it was officially discontinuing their partnership with Luminar. The brand had originally announced last week that they were removing Lidar as a standard feature from the EX90 and ES90, and would continue as an optional equipment.
Why did Volvo back down from their partnership with Lidar?
Volvo said the decision is affected by the limited supply of lidar hardware and told TechCrunch that Luminar wasn’t able to meet the requirements. While TechCrunch spotted a regulatory filing in late October filed by Luminar, which said that Volvo was dissolving a five-year contract for their sensors, it wasn’t mentioned that the hardware availability was the reason behind the decision.
The filing had also noted that Volvo’s decision had caused them significant damages as well to Luminar’s business. They have suspended financial guidance for the rest of the year, and there wasn’t any guarantee of the dispute being resolved at all. There is no word whether this also affects Volvo’s sister brand, Polestar.
The brand does happen to be in a good position despite all of this, with several manufacturer commitments from the likes of Nissan, Mercedes-Benz and other brands as well. The brand, though, has been under some spotlight with Lumina founder Austin Russell resigning suddenly in May after the start of an ethics investigation. CFO Thomas Fennimore also stepped down last week after Volvo’s announcement.
At present, they are in debt of about $429 million, with all liabilities adding close to more than half a billion dollars. The company has only made $18.8 million in revenues this year so far. However, the costs of products and services add up to $26.8 million. The brand also posted $66.6 million in R&D losses for 2025.
At October end, the company had close to $72 million of cash and marketable securities. Still, it is a high cash-burning rate means that Luminar will run out of cash by early 2026 if things don’t turn around, and Volvo’s backing away has only added salt to the wounds.