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28 Feb 2024
Automotive lidar firm expects delayed launch of EX90 car to serve as 'major inflexion point'.
Luminar Technologies, the automotive lidar startup that has raised more than half a billion dollars in funding since emerging from stealth mode in 2017, says that mid-2024 is likely to represent a key moment in the company’s fortunes.
The Silicon Valley firm has just posted an operating loss of $563 million on sales revenues of $69.8 million for 2023, partly as a result of the delayed launch of Volvo’s “EX90” flagship electric car, which will feature Luminar lidar as standard.
According to multiple media reports in the automotive press, the delay is due to the sheer complexity of the software coding needed to accommodate the lidar system.
But CEO Austin Russell says that the “headwinds” of 2023 will soon reverse as Volvo’s series production kicks in - and related revenues start flowing into Luminar’s accounts.
“2024 will serve as a major inflexion point for Luminar,” wrote Russell in a letter to shareholders accompanying the company’s latest financial results.
“Over the past handful of months, the team and I have remained laser-focused on execution, de-risking our business, and most importantly, our upcoming launch with Volvo Cars.”
Critical proof point
That launch is now expected in the second quarter of this year, with Russell claiming that Luminar now stands in a stronger position than at any point since he founded the firm back in 2012.
“After spending the last few years industrializing our technology for launch, I’ve never looked forward more to any event for our company,” the CEO continued.
“This will also be a critical proof point for the industry, our company, our order book, and will also change the dialogue with many of the risk-averse automakers, not to mention discussions with insurers, regulators, and even suppliers.”
While Luminar has enjoyed success raising hundreds of millions of dollars via venture funding and a special-purpose acquisition company (SPAC) listing on the Nasdaq, it has - like most of its automotive lidar peers - been burning through much of that cash ever since. Its latest full-year accounts indicate a cash burn of close to $250 million in 2023, up from $208 million in 2022.
But with an order book said to stand at close to $4 billion thanks to deals with the likes of Mercedes-Benz and Polestar alongside Volvo and others, the hope is that the drain on cash will improve markedly this year.
“While we’re proud of all we achieved throughout 2023, the principal headwind we faced was the pushout of the EX90 into 2024,” admitted Russell in his letter. “As a result, we did not record material production revenue for Volvo Cars this year and incurred incremental launch costs.”
Contrarian strategy
Despite the Volvo delay, Luminar was able to post close to a 70 per cent year-to-year increase in sales last year. And in its financial outlook for 2024, Luminar’s executive team said that once the EX90 is launched, its quarterly sales will likely rise to around $35 million.
Suggesting that autonomous vehicles currently reside at the bottom of the infamous “trough of disillusionment” from Gartner’s hype cycle, Russell defended Luminar’s strategic focus on enhancing driver safety - rather than replacing drivers with technology entirely.
Noting that billions of dollars continue to be spent each year in efforts to realize a driverless vehicle concept, the CEO said that recent examples of incidents involving autonomous vehicles showed how challenging that transition is.
“It’s clear that removing the driver from the vehicle altogether is not happening anytime soon, from both a technical and commercial perspective,” he wrote.
“From our inception, Luminar has taken the approach of building technology for enhancing, rather than replacing, the driver, and specifically working to integrate our technology into the existing multi-trillion dollar consumer production vehicle industry.
“This was a contrarian strategy at the time when many in the industry were looking to design fully driverless vehicles for autonomous applications. This is why the industry was shocked when Volvo first announced their intent to put our technology on consumer production vehicles four years ago, and again when they opted to standardize that technology, seeing advanced safety as something that shouldn’t be optional.
“Our vision for the industry is now transforming into reality, beginning with our global launch with Volvo. They have been the perfect lead partner for Luminar as the premier safety-focused brand and an early innovator of advanced technologies that ultimately become standardized across the industry.”
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