The Swedish car manufacturer Volvo has canceled a five-year contract with Luminar, the latest escalation in an increasingly ugly feud between the lidar sensor company and its biggest customer.
The fight comes at an existential moment for Luminar. The company recently defaulted on several of its loans. While it works with those lenders on a resolution, Luminar has warned investors that it may have to file for bankruptcy.
To prevent that, Luminar recently laid off 25% of its staff and is trying to sell itself — or parts of it — to potential buyers. One of them is Luminar founder Austin Russell, who stepped down as CEO in May amid an ethics investigation. Luminar is also being investigated by the Securities and Exchange Commission, recent filings reveal.
“Volvo Cars took 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 automaker said in a statement to TechCrunch. Luminar did not respond to a request for comment.
Volvo is not just a customer of Luminar. The two companies have spent much of the last decade working together. Volvo invested in Luminar and helped the Florida-based startup get some of its first production vehicles.
The relationship was mutually beneficial. Luminar’s technology has given Volvo the confidence to deliver on big promises about road safety by offering automated driving functions. Volvo gave Luminar credibility ahead of the 2020 SPAC merger that made Russell one of the youngest self-made billionaires ever.
But Luminar has faced challenges as a public company. It has struggled to differentiate itself from Volvo and in 2024 cut a fifth of its staff, while deciding to outsource its sensor manufacturing. Then, in May this year, Russell abruptly resigned as Luminar revealed its board had launched an investigation into its “code of business conduct and ethics”.
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The fight with Volvo surfaced on October 31st.
The company told shareholders in a regulatory filing archiving that day when Volvo decided to no longer make Luminar’s “Iris” lidar a standard sensor on its EX90 and ES90 vehicles. Volvo also told Luminar that it had “postponed” a decision on whether to include the next-generation ‘Halo’ sensor in the Swedish carmaker’s future vehicles.
Luminar said in the filing that it “had a claim against Volvo for significant damages” and “suspended further commitments by Iris” to the automaker.
“The Company is in discussions with Volvo regarding the dispute, however, there can be no assurance that the dispute will be resolved favorably or at all,” Luminar wrote.
Volvo told TechCrunch on Monday that “its products can offer a high level of safety and driver support, thanks to the cars’ powerful computing core combined with the advanced set of sensors – with or without lidar.” However, he added, “the situation is having an impact on some customer orders.” He did not immediately explain whether this meant a delay or something else.
Volvo’s decisions weren’t just a threat to Luminar’s revenue – they also had negative consequences for Luminar. In the October filing, Luminar said it stopped spending money on Iris sensors for Volvo, and in turn, the supplier that makes the sensors claimed infringement their agreement.
This story has been updated with feedback from Volvo.
