Volvo, the Swedish car manufacturer, has terminated a five-year partnership with Luminar, marking the latest development in an intensifying dispute between the lidar technology provider and its most significant client.
This conflict comes at a critical juncture for Luminar, which has recently defaulted on multiple loans. While the company is negotiating with its creditors to find a solution, it has cautioned shareholders that bankruptcy could be a possibility.
In an effort to avoid this outcome, Luminar recently reduced its workforce by a quarter and is seeking buyers for all or parts of the business. Among the interested parties is company founder Austin Russell, who stepped down as CEO in May amid an ethics investigation. According to recent disclosures, Luminar is also under review by the Securities and Exchange Commission.
“Volvo Cars has chosen to make this move to minimize supply chain risks, directly due to Luminar’s inability to fulfill its contractual responsibilities,” the company stated to TechCrunch. Luminar did not provide a comment when asked.
Volvo’s involvement with Luminar goes beyond that of a typical customer. Over the past decade, the two companies have closely collaborated, with Volvo investing in Luminar and assisting the Florida-based startup in integrating its technology into early production models.
Both sides have benefited from this partnership. Luminar’s innovations enabled Volvo to make bold claims about improving road safety through advanced driving automation, while Volvo’s support helped establish Luminar’s credibility prior to its 2020 SPAC merger, which made Russell one of the youngest billionaires to achieve such status independently.
However, Luminar has encountered difficulties as a publicly traded company. It has struggled to expand its customer base beyond Volvo, and in 2024, it cut 20% of its employees and opted to outsource sensor manufacturing. In May, Russell unexpectedly resigned after the board initiated a review of the company’s business conduct and ethics policies.
The dispute with Volvo became public on October 31.
On that date, Luminar informed investors through a regulatory document that Volvo had decided to discontinue using Luminar’s “Iris” lidar as a standard feature in its EX90 and ES90 models. Volvo also notified Luminar that it was postponing a decision about whether to incorporate the upcoming “Halo” sensor in future vehicles.
In the same filing, Luminar stated it had “filed a claim against Volvo seeking substantial compensation” and had “halted further Iris-related commitments” for Volvo.
“The Company is currently in talks with Volvo to address the disagreement; however, there is no guarantee that the matter will be resolved in our favor, or resolved at all,” Luminar wrote.
On Monday, Volvo told TechCrunch that its “vehicles are capable of delivering exceptional safety and driver assistance, thanks to advanced core computing and sensor technology — regardless of whether lidar is included.” The company added that the “current situation is affecting certain customer orders,” but did not clarify if this meant delays or other impacts.
Volvo’s recent actions not only jeopardized Luminar’s income, but also triggered further complications. In the October disclosure, Luminar said it had stopped investing in Iris sensors for Volvo, which led the sensor supplier to claim this violated their contract.
This article has been revised to include Volvo’s statements.
