Luminar's Volvo Deal and Bankruptcy: A Timeline

Luminar's Rapid Descent into Bankruptcy

At the beginning of 2023, Luminar experienced a period of significant success. Following its initial public offering during the pandemic and a crucial partnership established with Volvo, the company had expanded its client base to include both Mercedes-Benz and Polestar for its lidar sensors.

Austin Russell, Luminar’s founder and CEO, characterized this moment as a pivotal turning point. The company was preparing for the integration of its sensors into the first commercially available vehicles.

Volvo's Initial Commitment

Volvo, in particular, demonstrated strong commitment to the technology. Having cultivated a reputation for safety over many years, the Swedish automaker was the first to embrace the integration of laser-based sensors into its vehicle designs.

Initially, Volvo contracted Luminar to supply 39,500 lidar sensors under an agreement finalized in 2020. This commitment was subsequently increased to 673,000 units in 2021.

Further solidifying their partnership, Volvo again expanded the agreement in 2022, raising the total sensor order to 1.1 million units.

Bankruptcy and Asset Sales

However, just three years later, Luminar has filed for bankruptcy. The company has already reached an agreement to divest one of its subsidiaries, focusing on semiconductor technology.

Currently, Luminar is seeking a buyer for its lidar business as part of the Chapter 11 bankruptcy proceedings, which commenced on Monday.

The Unraveling of the Volvo Deal

Initial court filings related to the bankruptcy proceedings have revealed details surrounding the breakdown of Luminar’s key agreement with Volvo. This deterioration played a significant role in the company’s financial difficulties and ultimately contributed to its collapse.

The filings indicate that issues with the Volvo partnership were a major factor in pushing the once-promising startup towards its current situation.

Lidar technology, once considered a cornerstone of autonomous driving, faced challenges in implementation and cost-effectiveness, impacting Luminar’s business model.

Initial Optimism and Subsequent Adjustments

In 2022, Luminar committed significant resources – encompassing investments in equipment, infrastructure, and personnel – to fulfill anticipated demand originating from Volvo. A formal declaration, authored by Luminar’s recently appointed chief restructuring officer, Robin Chiu, details these substantial upfront expenditures.

Specifically, the company established a manufacturing plant in Monterrey, Mexico, and allocated approximately $200 million towards preparing for the production of its Iris lidar sensors intended for Volvo’s EX90 SUV.

During the initial bankruptcy hearing on Tuesday, legal counsel for Luminar articulated that Volvo was envisioned as a key client. This partnership was intended to serve as a catalyst for introducing the Iris product line to a wider range of automotive manufacturers.

However, challenges with Volvo emerged relatively quickly, as outlined by Chiu. The launch of the EX90 SUV experienced delays due to the necessity for further “software testing and development,” as Volvo communicated in 2023.

Furthermore, Luminar was informed in early 2024 that Volvo had reduced its projected order volume for Iris sensors by 75%.

Concurrent with these issues, other agreements for Luminar also began to deteriorate. Polestar, a Volvo subsidiary, discontinued plans for integrating Luminar’s lidar sensors because the vehicle’s software proved incompatible with the technology, according to Chiu’s statement.

Mercedes-Benz also terminated its contract for the purchase of Iris sensors in November 2024, citing Luminar’s inability to satisfy “ambitious requirements,” as detailed by Chiu.

While Mercedes-Benz later entered into a new agreement with Luminar in March 2025 concerning its next-generation Halo lidar, Chiu indicated that, at the time of the bankruptcy filing, Luminar had “no ongoing projects” with the German automaker.

This series of events ultimately left Volvo as Luminar’s primary, and essentially sole, major customer.

The company’s strategic focus remained largely confined to the automotive sector, with limited exploration of alternative applications such as defense or robotics. Indeed, Luminar was founded in 2012 by Austin Russell with the specific aim of transitioning lidar technology from these other industries into the automotive space to expedite the development of autonomous vehicles.

It wasn't until March of this year that Russell publicly discussed diversifying beyond automotive applications, coinciding with a new agreement with Caterpillar, a construction equipment manufacturer.

Shortly thereafter, in May, Russell unexpectedly resigned from his position following an ethics review initiated by Luminar’s board of directors.

A Deteriorating Partnership

According to statements made by Chiu, Volvo consistently assured Luminar that the initial order of 1.1 million units would be fulfilled, even with anticipated lower production volumes in 2024. Consequently, Luminar continued its operations based on this understanding.

However, indications of financial strain began to emerge. In May 2024, Luminar reduced its workforce by 20% and increased its reliance on outsourcing for the manufacturing of its lidar sensors. Further reductions and restructuring of business operations followed in September 2024.

Additional workforce reductions occurred in May 2025, subsequent to Russell’s resignation. In September, Volvo communicated unfavorable news, as detailed by Chiu. The automaker revised its plans to offer lidar as an optional feature on the EX90, diverging from the original intention of including it as standard equipment.

Furthermore, Volvo informed Luminar of its decision to discontinue the use of lidar in upcoming vehicle models, citing cost reduction as the primary rationale. This shift resulted in an approximate 90% decrease in Volvo’s projected lifetime order volumes, as noted in Chiu’s report.

Luminar formally notified Volvo on October 3rd that it considered these changes a violation of their initial agreement established in 2020. The dispute became public knowledge on October 31st when Luminar disclosed to shareholders, via a regulatory filing, its suspension of sensor deliveries to Volvo.

Two weeks later, Volvo responded with a letter terminating the agreement. In a statement provided to TechCrunch, Volvo attributed its decision to the need to mitigate supply chain risks and directly linked it to Luminar’s inability to fulfill its contractual obligations.

Volvo asserted that its vehicles can maintain a high degree of safety and driver assistance through their robust core computing systems and advanced sensor suites, regardless of lidar integration. Luminar, in turn, attempted to recoup its investments by marketing lidar sensors originally intended for Volvo to alternative markets, but these efforts proved insufficient.

Chiu’s filing indicates that despite diligent efforts to secure new clients as the relationship with Volvo deteriorated, Luminar was unable to establish production agreements with any new customers in a timely manner. The public dispute with Volvo also negatively impacted sales due to broader market concerns regarding Luminar’s financial stability.

Currently, the remaining assets of Luminar are under the control of its creditors and the bankruptcy court. The company is seeking judicial approval to sell its semiconductor division to Quantum Computing, Inc. for $110 million and is actively soliciting bids for its lidar business.

According to the filing, Luminar has already attracted considerable interest in the lidar business. In January, the company engaged Jefferies, an investment bank, to assess a potential sale following the receipt of an unsolicited acquisition offer. Throughout the summer and fall, Luminar received further unsolicited expressions of interest, including one submitted by Russell through his new AI laboratory in October.

As reported by TechCrunch on Monday, Russell intends to continue pursuing the acquisition of Luminar’s remaining assets as the bankruptcy proceedings progress. During Tuesday’s court hearing, Luminar’s legal counsel stated that the company is “deep into the sale process” and “in negotiations with” multiple prospective buyers.

This article has been updated to include a statement from Volvo and details from Luminar’s initial bankruptcy hearing.