In early 2023, Luminar was high. After going public during the pandemic and securing a major deal with Volvo, the company had added Mercedes-Benz and Polestar as its clients “salvationlidar sensors. Founder and CEO Austin Russell he called it a “tipping point” as Luminar prepared to integrate these sensors into the first production vehicles.
Volvo in particular was involved in the technology. The Swedish automaker, which has spent decades building a brand around the idea of making the safest cars, was the first to incorporate laser-based sensors into its vehicles. Volvo initially used Luminar to provide 39,500 lidar sensors during an agreement signed in 2020. In 2021, Volvo increased that number to 673,000. And in 2022, Volvo increased it again, this time to 1.1 million sensors.
Three years later, Luminar is now bankrupt. The company already has he made a deal to sell a semiconductor-focused subsidiary and wants to sell its lidar business in Chapter 11 proceedings, which began Monday.
The first batch of filings in the bankruptcy case shed new light on how the cornerstone of Luminar’s deal with Volvo fell apart — and how its annulment helped pull over the once-promising startup.
Big promises, then big revisions
Luminar has made “significant initial investments in equipment, facilities and workforce” to meet demand from Volvo in 2022, according to statement written by Luminar’s newly hired head of restructuring, Robin Chiu. It was built a manufacturing facility in Monterrey, Mexicoand spent nearly $200 million to prepare to build the Iris lidar sensors for Volvo’s EX90 SUV.
“Volvo was going to be a marquee customer, the stepping stone to introduce the company’s Iris product to the wider auto industry,” one of Luminar’s lawyers said at the first bankruptcy hearing on Tuesday.
But according to Chiu, problems were already brewing with Volvo. The automaker delayed the EX90 SUV because it needed to do more “testing and software development.” the automaker said in 2023. And in early 2024, Luminar says Volvo has reduced the expected intensity for the Iris sensors by 75%.
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The rest of Luminar’s offerings also began to break down. Polestar (a subsidiary of Volvo) quietly abandoned the integration of Luminar’s lidar sensors “because the vehicle software ultimately couldn’t use” the features, according to Chiu. Mercedes-Benz ended its deal to buy Luminar’s Iris sensors in November 2024 because the lidar maker “failed to meet ambitious demands,” according to Chiu.
(Mercedes-Benz entered into a new deal with Luminar in March 2025 for its next-generation Halo lidar, but Chiu wrote that Luminar had “no promotional plans” with the German automaker at the time of the bankruptcy.)
That left Luminar with Volvo as its only flagship customer.
The company never diversified much beyond the automotive industry, avoiding other applications such as defense or robotics. In fact, Russell founded Luminar in 2012 with the goal of taking lidar out of these areas and into the automotive industry to help accelerate the adoption of autonomous vehicles.
It wasn’t until March of this year that Russell talked about expanding beyond the automotive industry, as Luminar signed agreement with construction equipment company Caterpillar. Just two months later, Russell abruptly resigned following an ethics investigation by Luminar’s board.
“More bad news”
According to Chiu’s account, Volvo continued to promise to meet the lifetime order of 1.1 million units despite the reduced volume in 2024. So Luminar continued to press forward with this case.
But they were showing signs of stress. Luminar laid off 20% of its workforce in May 2024 and outsourced most of its lidar sensor manufacturing. The deepen these cuts and restructured some of its operations in September 2024. Another round of layoffs came in May 2025 after Russell resigned.
In September, “Volvo delivered more bad news,” Chiu wrote. The automaker has decided to offer lidar as an option on the EX90 going forward, rather than making it a standard feature as originally planned. Volvo also told Luminar it was scrapping future vehicles “as a cost-cutting measure.”
“This change reduced Volvo’s estimated lifetime volumes by about 90%,” Chiu wrote.
Luminar told Volvo on Oct. 3 that it considered this a violation of the agreement the companies first signed in 2020. On Oct. 31, the dispute became public, as Luminar told shareholders in a regulatory filing that it had suspended sensor shipments to Volvo. The Swedish automaker sent a letter to Luminar two weeks later, terminating the deal.
Volvo told TechCrunch in a statement on Tuesday that it “made this decision to limit the company’s supply chain risk exposure and is a direct result of Luminar’s inability to fulfill its contractual obligations to Volvo Cars.”
“The company’s products can offer a high level of safety and driver support, provided by the cars’ powerful computing core combined with the advanced set of sensors — with or without lidar,” said a Volvo spokesperson.
Luminar, meanwhile, began selling the lidar sensors intended for Volvo “in adjacent markets in an attempt to recoup its sunk costs,” according to Chiu’s filing, but it was too late.
“As her relationship with Volvo deteriorated, [Luminar] worked tirelessly to identify new customers, but ultimately was unable to go into production with new customers on time,” Chiu wrote. “Volvo’s public spat also led to lower sales due to broader market concerns about Luminar’s financial future.”
Now the future of what’s left of Luminar rests in the hands of its creditors and the court. Seeks Judge’s Approval to Sell Semiconductor Subsidiary to Quantum Computing, Inc. for $110 millionand hopes to join several bidders for the lidar business.
Luminar already had a significant interest in the lidar business, according to the filing. In January, Chiu wrote, the company hired investment bank Jefferies to evaluate a sale after receiving an “unsolicited takeover proposal.” Luminar received “additional unsolicited inbound expressions of interest in acquiring the Company” over the summer and fall — including one submitted by Russell through its new AI Lab in October.
As TechCrunch reported Monday, Russell plans to continue bidding for Luminar’s remains as the bankruptcy case moves forward. During Tuesday’s hearing, a lawyer for Luminar said it is “deep in the sale process” and “in negotiations with” several potential bidders.
This story has been updated with a statement from Volvo and information from Luminar’s first bankruptcy hearing.
