<div id="readability-page-1"><div> In early 2023, Luminar was riding high. After going public during the pandemic and scoring a key deal with Volvo, the company had added Mercedes-Benz and Polestar as customers of its “life-saving” lidar sensors. Founder and CEO Austin Russell called it an “inflection point,” as Luminar prepped to have those sensors integrated into the first production vehicles. Volvo in particular was all-in on the technology. The Swedish automaker, which spent decades building a brand around the idea of making the safest cars, was the first to jump at integrating the laser-based sensors in its vehicles. Volvo initially tapped Luminar to provide 39,500 lidar sensors over the life of a deal signed in 2020. In 2021, Volvo upped that to 673,000. And in 2022, Volvo upped it again, this time to 1.1 million sensors. Three years later, Luminar is now in bankruptcy. The company has already made a deal to sell off one subsidiary centered around semiconductors, and is looking to sell its lidar business during the Chapter 11 process, which began on Monday. The first batch of filings in the bankruptcy case shed new light on how Luminar’s cornerstone deal with Volvo came apart — and how its undoing helped push the once-promising startup over the edge. Luminar made “substantial up-front investments in equipment, facilities, and workforce” to meet the demand from Volvo back in 2022, according to a declaration written by Luminar’s newly-hired chief restructuring officer Robin Chiu. It built out a manufacturing facility in Monterrey, Mexico, and spent nearly $200 million to prepare to make its Iris lidar sensors for Volvo’s EX90 SUV. But, according to Chiu, problems were already brewing with Volvo. The automaker delayed the EX90 SUV because it needed to do more “software testing and development,” the automaker said in 2023. And in early 2024, Luminar says Volvo reduced its expected volume for Iris sensors by 75%. (Volvo did not immediately respond to a request for comment.) Luminar’s other deals started to sour, too. Polestar (a subsidiary of Volvo) quietly gave up on integrating Luminar’s lidar sensors “because the vehicle’s software ultimately could not use” the features, according to Chiu. Mercedes-Benz terminated its agreement to buy Luminar’s Iris sensors in November 2024 because the lidar-maker “failed to meet ambitious requirements,” according to Chiu. <div> <div> Techcrunch event <div> San Francisco | October 13-15, 2026 </div> </div> </div> (Mercedes-Benz struck up a new deal with Luminar in March 2025 for its next-generation Halo lidar, but Chiu wrote that Luminar has “no go-forward projects” with the German automaker at the time of bankruptcy.) This left Luminar with Volvo as its lone flagship customer. The company never diversified much beyond the automotive industry, shunning other applications like defense or robotics. In fact, Russell had founded Luminar in 2012 with the goal of taking lidar out of those sectors and into automotive to help accelerate the adoption of autonomous vehicles. It wasn’t until March of this year that Russell talked about expanding beyond automotive, as it signed a deal with construction equipment company Caterpillar. Just two months later, Russell abruptly resigned following an ethics inquiry from Luminar’s board of directors. By Chiu’s account, Volvo kept promising that it would meet the lifetime order of 1.1 million units despite the reduced volume in 2024. So Luminar kept pressing forward under that assumption. But signs of stress were showing. Luminar laid off 20% of its workforce in May 2024 and outsourced more of its lidar sensor manufacturing. It deepened those cuts and restructured some of its business in September 2024. Another round of layoffs came in May 2025 after Russell resigned. In September, “Volvo delivered more bad news,” Chiu wrote. The automaker decided to offer lidar as an option on the EX90 going forward, instead of making it a standard feature as originally planned. Volvo also told Luminar that it was shelving lidar on future vehicles “as a cost-cutting measure.” “This change reduced Volvo’s estimated lifetime volumes by approximately 90%,” Chiu wrote. Luminar told Volvo on October 3 that it considered this a breach of the agreement the companies had first signed in 2020. On October 31, the dispute became public, as Luminar told shareholders in a regulatory filing that it was suspending sensor shipments to Volvo. The Swedish automaker sent Luminar a letter two weeks later, terminating the agreement. Luminar had started selling lidar sensors meant for Volvo “to adjacent markets in an effort to recover its sunk costs,” according to Chiu’s filing, but it was too little too late. “As its relationship with Volvo deteriorated, [Luminar] worked tirelessly to identify new customers, but was ultimately unable to enter into production with any new customers in a timely fashion,” Chiu wrote. “The public Volvo dispute also resulted in a decline in sales due to broader market concerns over Luminar’s financial future.” Now the future of what’s left of Luminar is in the hands of its creditors and the court. It’s seeking the judge’s approval to sell the semiconductor subsidiary to Quantum Computing, Inc. for $110 million, and hopes to court a number of bidders for the lidar business. Luminar has already had significant interest in the lidar business, according to the filing. In January, Chiu wrote, Luminar hired investment bank Jefferies to evaluate a sale after receiving an “unsolicited acquisition proposal.” Luminar received “additional unsolicited inbound expressions of interest to acquire the Company” through the summer and fall — including one submitted by Russell through his new AI lab in October. As TechCrunch reported Monday, Russell plans to keep bidding on Luminar’s remains as the bankruptcy case moves forward. </div></div>

LAZR

Luminar, once a promising lidar sensor company, filed for bankruptcy after its key deal with Volvo fell apart. Despite initial success and expansion plans, Volvo reduced its sensor orders, leading to financial strain. Luminar's other deals with Polestar and Mercedes-Benz also failed, leaving Volvo as its sole major customer. Attempts to diversify and find new customers were unsuccessful, culminating in layoffs and restructuring. The breach of agreement with Volvo and subsequent termination of the deal pushed Luminar into bankruptcy.

- Luminar, after initial success with major automotive contracts, has filed for bankruptcy due to deteriorating relationships with key customers, particularly Volvo, which drastically reduced its orders.  
- The company invested heavily to meet demand but faced delays and significant volume cuts that strained its operations, leading to layoffs and restructuring efforts.  
- Now, Luminar's future is uncertain as it seeks court approval to sell its semiconductor subsidiary and attract buyers for its lidar business amidst ongoing financial challenges.

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