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Job cuts at Luminar as lidar firms look to conserve cash

15 May 2024

Latest round of quarterly financial results highlight efforts to reduce cash burn and sensors hitting the road.

Over the past two weeks several developers of lidar technology have posted their latest quarterly financial results, with cost-cutting efforts emerging as a clear theme just as sensors move into series production.

Among them are the Silicon Valley firm Luminar Technologies, which revealed plans to cut its full-time employee headcount by around one-fifth.

Just days after announcing that Luminar had begun series production of systems destined for Volvo Cars’ new EX90 model, founder and CEO Austin Russell said:

“Now that we’ve made the necessary billion-dollar R&D investments from the chip-level up and successfully launched with SOP [start of production] of a standardized technology, the business model and cost structure that enabled us to achieve this leadership position no longer fit the needs of the company.

“Today, we are announcing an evolution in our business to a more ‘asset-light’ model. The first step in this transition involves outsourcing more of the industrialization process to our existing partners.”

TPK deal
Russell added that the shift meant “a substantial reduction in costs across the board”, with the majority of contractors who had supported the Volvo ramp also departing. Coupled with an exclusive partnership with Taiwanese contract manufacturer TPK, the decisions are expected to save around $80 million in annual costs.

Shortly after announcing the shift in emphasis, Luminar released results for the opening quarter of the year showing it had made an operating loss of $126 million on sales of $21 million.

In an accompanying shareholder letter, CFO Tom Fennimore wrote that the company still held nearly $270 million in cash and other liquid assets, enough to last until at least the end of 2025 while Volvo’s EX90 production ramps up.

“Our future quarterly results remain highly dependent on the timing and cadence of Volvo Car’s production ramp and pace of our sensor production cost improvements,” he added.

Of the other Silicon Valley lidar set, Mountain View’s Aeva posted an operating loss of $37 million on sales of only $2.1 million, but stressed that it had shipped a record number of sensors - including to key customer Daimler Truck.

CEO and co-founder Soroush Salehian added that Aeva was on track with Daimler’s planned development milestones and SOP schedule, with the first trucks integrating Aeva’s frequency-modulated continuous-wave (FMCW) sensors now on the road for data collection purposes.

Like Luminar, Aeva appears to have enough of a liquidity runway for the foreseeable future, with $189 million in cash and liquid assets listed on its balance sheet, plus a $125 million credit facility.

In previous announcements, the lidar company has indicated that Daimler is scheduled to begin adopting the technology in 2026, followed by a ramp to potentially hundreds of thousands of units in 2027.

AEye, which is also based in California, said it was still working to reduce cash burn as it reported an operating loss of nearly $11 million on negligible sales revenues.

While CEO Matt Fisch highlighted the potential of new partnerships with Taiwan’s LITEON and China’s LighTekton, company CFO Conor Tierney stated:

“We remain focused on cost discipline and have reduced our cash burn rate for the fourth consecutive quarter. With $28.9 million in cash on our balance sheet at the end of the first quarter, we are confident that these efforts extend our runway into 2025.

“Thanks to our capital light business model we believe we have the resiliency to ride out the industry headwinds.”

Over in San Jose, rival developer Cepton - which recently lost a key contract when a lidar-adopting project was cancelled by General Motors - said that it had secured a new multi-year series production award with a global OEM, in collaboration with key partner and investor Koito Manufacturing.

Koito is also the subject of a new engineering services contract worth $10 million, in support of the new OEM supply deal.

Reporting an operating loss of $12 million on quarterly sales of just under $2 million, CEO Jun Pei pointed out that the firm had also received a cash payment of $4 million related to the General Motors cancellation.

“The review of our cost recovery claim is on-going and this gain represents an initial recovery payment,” added Cepton.

Finally Innoviz Technologies, which is based in Tel Aviv, Israel, and had already revealed a restructuring plan including job cuts to reduce its cash burn earlier this year, highlighted BMW’s adoption of its sensors as it reported an operating loss of $33 million on sales of $7 million in the March quarter.

CEO Omer Keilaf added: “With the BMW i7 launching in Germany, we believe we are the only pure-play lidar company to reach SOP with level 3 [autonomy], as there are vehicles currently on the road using our lidars and perception software.

“As part of expanding our relationships with our customers, we are collaborating with Volkswagen Group and Mobileye on an additional level 3 program. Overall, our pipeline is very active, with approximately half in the RFQ stage and more to come.

“We remain very optimistic about the lidar sector as recent industry and regulatory activity reflects the continued adoption of lidar. We believe that as OEMs work to comply with new regulations, and as the automotive industry raises its standards, OEMs will move to implement new capabilities and features, many of which may be supported only by lidar.”

The firm’s latest balance sheet shows it held $128 million in cash and liquid assets at the end of March.

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