How Luminar’s doomed Volvo deal helped drag the company into bankruptcy

In early 2023, Luminar Technologies appeared poised for success, having secured major automotive customers including Volvo, Mercedes-Benz, and Polestar for its lidar sensors designed to enhance vehicle safety and autonomy. Volvo, a longstanding advocate for vehicle safety, initially committed to purchasing 39,500 sensors in 2020, then increased its order to 673,000 in 2021, and further to 1.1 million sensors in 2022. Luminar invested heavily—around $200 million—in manufacturing capabilities, including a new facility in Monterrey, Mexico, to fulfill Volvo’s large orders, particularly for the EX90 SUV. However, the relationship with Volvo deteriorated significantly by 2024. Volvo delayed the EX90 launch for additional software development and subsequently cut its sensor volume forecast by 75%. Other key partnerships also faltered: Polestar abandoned Luminar’s lidar integration due to software incompatibilities, and Mercedes-Benz terminated its sensor agreement in late 2024, citing unmet requirements