Mobility

Luminar’s quest to become a major auto supplier

The lidar maker is betting big on vertical integration and a near-term focus.
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Luminar

· 4 min read

In the 1970s, lidar mostly powered aerospace reflector devices; now, among other things, it helps power automakers’ hopes for future profits.

In addition to electric vehicles, many automakers see automated driving, or ADAS, features as core to their near-term businesses. And for some, lidar is a key piece of hardware used to power many advanced ADAS systems. Companies like Volvo Cars and Daimler Trucks-owned Torc Robotics use lidar in conjunction with cameras and radar—a detection method using radio waves—to capture a range of results that cover more ground together than individually.

“The way that [we] see it is that each of these sensors [radar, camera, et cetera], they have their strengths and weaknesses, and each of them have circumstances in which they can fail,” Andrew Cunningham, autonomy architect at Torc Robotics said, adding, “‘Why lidar’...ultimately boils down to safety—that with redundancy and different perspectives and sensing, we can make sure that our vehicles see more and see in more places than humans to achieve safety.”

Luminar is a clear leader in the lidar space. The Orlando-based company, which SPAC’d in 2020, has raised more than $1 billion in funding to date and a big-ticket list of automaker partnerships, including Volvo, Daimler Truck, Mercedes-Benz, Nissan, Polestar, and SAIC Motor, China’s largest automaker. The company is primarily prioritizing vertical integration and building into existing vehicles, execs said, rather than waiting for the lidar-hungry autonomous vehicle market to mature.

Workhorse sensor

Radar is typically good at providing range and velocity in any weather condition, but the information isn’t as rich, according to the experts we spoke with, and while cameras can provide rich information at long range, lighting conditions can affect visibility.

Lidar, meanwhile, is a “workhorse to get dense depth and…midrange,” Cunningham told us. And while weather can affect lidar, the tech is able to detect objects in the dark at a much higher fidelity than cameras. Luminar’s lidar is currently used in Daimler Trucks’ commercial trucks, and Daimler Trucks also acquired a minority stake in Luminar in 2020.

This month, Luminar and Volvo Cars announced an update in their five-year partnership: The company’s lidar will come standard on the new, electric Volvo EX90 and be integrated into the vehicle’s roofline, “so the hardware will be there when the car rolls out of the factory,” Elías Marel Þorsteinsson, first design and systems engineer for lidar at Volvo, told us.

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The EX90 will use Luminar’s lidar “from day one,” Milin Mehta, Luminar’s head of product and partnership comms, told us. Those vehicles are available for pre-order now, with production set to begin in 2023.

Over time, Volvo plans to use Luminar’s lidar in its ADAS and autonomous-driving systems. For its part, Luminar primarily plans to focus on automakers’ current passenger-vehicle rollouts rather than autonomous vehicles, according to its founder and CEO, Austin Russell.

“There’s a lot of noise around, ‘How long is it going to take for fully autonomous vehicles to happen?’ [and] ‘What’s the path to realization?’ And I think that’s a different game and battle altogether, largely, than…what we’ve been doing,” Russell said. “We’ve been really focused in on the [existing] production vehicle market.”

On Luminar’s Q3 earnings call earlier this month, it reported quarterly revenue of $12.8 million, up 60% year over year. It was the company’s third time in four quarters topping consensus revenue estimates, although it is not yet profitable.

Amid the growing market for lidar, one way Luminar is trying to help differentiate itself is vertical integration for core lidar elements, including designing its own chips after it acquired a chipmaker in 2021. Russell said the company custom-designed components like the receiver, laser, scanning mechanism, and processing electronics, and now owns the suppliers of those components.

“You have to be able to invest huge sums of capital to be able to make this happen,” Russell said, adding, “That’s what we’ve done, historically, to get to where we are today—to get this vertical integration down.”

In 2021, Luminar’s capex was $6.4 million, up from a $2.2 million capex in 2020.

Ultimately, Russell said, this combination of no longer relying on off-the-shelf components, as well as focusing on consumer vehicles instead of the robotaxi market, has helped the company get to where it is today. And vertical integration has been key to the process.

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