Luminar is battling with its largest client as the threat of bankruptcy looms

The Swedish automaker owns Volvo Canceled A five-year contract with Luminar, the latest escalation in an increasingly ugly fight between the lidar sensor company and its largest customer.

The fight occurs during an existential moment for Luminar. The company recently defaulted on several of its loans. While it works with those lenders to reach a resolution, Luminar has warned investors that it may have to declare bankruptcy.

To ward this off, Luminar It recently laid off 25% of its employees It tries to sell itself – or parts of it – to potential buyers. One of them is Luminar founder Austin Russell, who resigned as CEO in May during an ethics investigation. Luminar is also under investigation by the Securities and Exchange Commission, recent filings reveal.

Volvo is not just a client of Luminar. The two companies have spent much of the last decade working together. Volvo Invest in Luminar It helped the Florida-based startup obtain some of its first production vehicles. (Neither company immediately responded to requests for comment.)

The relationship was beneficial to both parties. Luminar technology has given Volvo confidence Make big promises About making roads safer by introducing automated driving features. Volvo has given Luminar credibility before 2020 SPAC merger Making Russell one of the youngest self-made billionaires ever.

But Luminar has faced challenges as a public company. It has struggled to diversify away from Volvo, and in 2024 cut its capital fifth of its employees while deciding to outsource manufacturing From its sensors. Then, in May of this year, he suddenly texted to resign Luminar revealed that its board of directors has opened an investigation into its “code of business conduct and ethics.”

The battle with Volvo came to the fore on October 31.

The company told its regulatory shareholders Deposit On that day, Volvo decided to stop making the Luminar “Iris” lidar sensor a standard sensor on its EX90 and ES90 cars. Volvo also told Luminar that it has “postponed” the decision to include the next-generation “Halo” sensor in the Swedish automaker’s future vehicles.

Luminar said in the lawsuit that it “filed a claim against Volvo for significant damages” and “suspended additional IRIS obligations” to the automaker.

“The company is in discussions with Volvo regarding the dispute; however, there can be no assurance that the dispute will be resolved favorably or at all,” Luminar wrote.

Volvo’s decisions not only posed a threat to Luminar’s revenues, but also had knock-on effects on Luminar. In an October filing, Luminar said it had stopped spending money on Volvo’s Iris sensors, and in turn, the supplier that makes the sensors claimed this was a violation of they deal.