Volvo has made the surprising move to step away from its earlier promise of standard lidar for the EX90 SUV and ES90 sedan. Initially, the company announced through a somewhat vague statement that they would start producing cars without lidar as early as 2025 citing supply limitations and customer demand. Later, Volvo confirmed to Reuters that they have officially ended their collaboration with Luminar Technologies, the sole provider of lidar systems for these cars.
Since 2020, Volvo and Luminar have been working together, with Volvo even investing in Luminar to help create a lidar system that would be affordable and compact enough for wider use. Luminar delivered a neat little device that fits atop the windshields of the EX90 and ES90, resembling a rally car’s air vent—it’s quirky but functional! While there might have been some concerns about it affecting smartphones up close, the tech itself was working pretty well.
What’s interesting though, is that the issues at hand aren’t really about the lidar tech itself. Volvo elaborated in a recent statement to The Drive, explaining:
“Volvo Cars has decided to remove the lidar sensor from its EX90 and ES90 cars due to the need to minimize supply chain risks and because Luminar failed to meet its contractual obligations to us. In an effort to cater to consumer demand and make the EX90 and ES90 accessible to more customers, we had previously decided to make lidar optional starting in 2026. Now, this agreement’s termination means no lidar will be featured on any EX90 or ES90 from Model Year 2026 onwards.”
What’s Going On with Luminar?
This whole situation is a major hit for Luminar, which relied heavily on its strong partnership with Volvo to grow its credibility, ultimately going public in 2020. This success led to significant financial backing and made founder Austin Russell one of the youngest billionaires. Luminar was then diversifying by forming ties with brands like Polestar, Nissan, and even Mercedes-Benz.
There were hopes for continued prosperity, but things took a turn for the worse. They laid off 20% of their staff last year and shifted sensor manufacturing to another company. To add fuel to the fire, Russell resigned suddenly in May after his actions came under scrutiny, and their CFO followed suit amid tensions with Volvo. It seems like Luminar, once promising, might now be struggling to keep commitments that were previously assumed to be an advantage.
Though Luminar hasn’t publicly commented yet, they filed a regulatory statement making it clear that there is a claim for significant damages against Volvo, effectively pausing their lidar commitments while this dispute is worked out. They’ve entered discussions but without guarantees of resolution in their favor. They have halted related payments, which has led to a notice of breach from their main sensor supplier.
What’s Next for Volvo?
The road ahead for Volvo’s driver assistance and autonomous features is a bit murky. While lidar was a crucial part of the vision, Volvo is saying:
“The EX90 and ES90 will still meet our safety standards, offering a high level of driving assistance thanks to the robust core computing capabilities and diverse sensor equipment—lidar or no lidar.”
It’s worth noting that with the EX90 packing eight cameras, five radars, and 16 ultrasonic sensors, it’s far from defenseless. Sure, they’ll need to tweak some software to deal with moving forward without lidar, but these existing components can still do a lot to ensure safety. Features like Pilot Assist, which combines adaptive cruise control and lane-keeping, are likely to continue, though Volvo hasn’t confirmed that yet.
While the loss of lidar is significant, it’s not the end of the world—Luminar isn’t the only game in town for lidar tech. Tesla has managed to evolve its Full Self-Driving system without it, proving that alternatives exist. Volvo’s future strategy remains to be seen as they navigate this hiccup.
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