Lidar manufacturer Luminar loses Volvo as a customer, slides into insolvency

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Volvo is foregoing the Lidar safety instrument in future vehicles. For Volvo's Lidar supplier Luminar Technologies, this is the final nail in the coffin. The US company has filed for Chapter 11 bankruptcy protection under US insolvency law. The bonds to be serviced currently amount to 488 million US dollars, plus at least 72 million dollars in supplier claims. Lidars are systems that measure distances point by point using lasers. They are used, among other things, in the safety systems of motor vehicles.

The prospect of profitable business is missing. Luminar Technologies was founded in 2012 intending to supply the automotive industry, especially for self-driving cars, without simultaneously serving the market for military drones and robots. The company relied on in-house developments and longer wavelengths (1550 nanometers instead of 905 nanometers) to achieve better results, specifically higher range.

Partnership with Volvo cost 200 million dollars

In 2020, Luminar succeeded in securing the first commercial contract with Volvo for Lidars for consumer vehicles. The devices were to become standard equipment for the electric SUV EX90. Volvo demanded that Lidar prove it could supply more than 100,000 Lidars annually from 2024 onward. According to the insolvency administrator, Luminar has invested a total of 200 million dollars in the Volvo partnership, including 52 million dollars in building a factory in Mexico. In early 2022, Volvo indicated an order for 1.1 million units but then purchased fewer than 10,000.

In parallel, Luminar collaborated with Volvo's subsidiary Polestar from 2021 onwards. Luminar's Lidars were to be offered as optional equipment in the Polestar luxury SUV. However, this did not happen because Polestar's software could not process the measurement data.

From 2022, Luminar and Mercedes-Benz jointly attempted to develop vehicle technology. This project also failed; although a follow-up project with Mercedes was decided upon, it was not implemented.

In September 2025, Volvo changed its mind: Lidar would only be offered as optional equipment and completely removed from future models. After Luminar had warned Volvo for breach of contract, the Chinese automotive group terminated the contract altogether. This forced Luminar to abandon all hope. Debt restructuring already planned and cost-saving measures, including increased outsourcing of production and waves of layoffs in 2024 and 2025, could not suffice when the only significant customer pulls out. A new cooperation with Caterpillar came too late.

Buyers sought

According to an analysis by the insolvency administrator, three factors are essential for the insolvency: several car manufacturers failed to integrate Lidar into their vehicles, making the market significantly smaller than Luminar expected. Since the company could never sell in large volumes, it lost money on every Lidar sold. And finally, there is the growing price pressure from Chinese suppliers.

Luminar has a solvent subsidiary called Luminar Semiconductors, which develops integrated circuits (ASICs) for Lidars. This subsidiary is being sold for 110 million US dollars to a photonics company from New Jersey called Quantum Computing -- unless someone else makes a better offer.

No buyer has yet been announced for Luminar Technologies' main business. The search will not be easy. Several outsiders have unsolicitedly initiated acquisition talks over the course of the year, but these have not led to any conclusion. Luminar still hopes to continue operations under a new owner. Until then, existing customers are to be supplied. In total, the company employs approximately 440 people.

In Munich, Luminar Technologies maintains a sales and customer service branch, Luminar GmbH. heise online has inquired with Luminar Technologies whether this German subsidiary will also have to file for insolvency. So far, no corresponding entry can be found in the insolvency notices.

SPAC

Luminar is on the long list of companies that took a shortcut to the stock market through a special purpose acquisition company (SPAC) but have disappointed their shareholders within a few years. Two class action lawsuits, two shareholder lawsuits, and an investigation by the capital markets authority SEC (Securities Exchange Commission) are pending against Luminar.

SPAC

SPAC stands for Special Purpose Acquisition Company. Such a company is founded solely to raise money from investors, then to be listed on the stock exchange without any actual business activity, and finally to merge with a company not yet listed on the stock exchange - in this case: Luminar Technologies - within two years. This was en vogue around 2020; for the acquired company, it is a faster and cheaper way to go public.

However, many such SPAC constructs have brought little joy to investors. The pressure to spend many millions on some acquisition within two years is perhaps not the ideal incentive for the best investment decision.

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