Luminar and Mercedes-Benz Expand Partnership

Luminar and Mercedes brand shot

[Image: Luminar Technologies]

On 22 February 2023, the global automaker Mercedes-Benz and the lidar development firm Luminar Technologies announced what the companies characterized as a “multi-billion-dollar deal” to include Luminar’s Iris lidar sensors and the accompanying software stack in “a broad range of [Mercedes’] next-generation production vehicle lines” by the middle of this decade.

The announced agreement represents a significant expansion of an existing partnership between Mercedes and Luminar. At the beginning of 2022, the carmaker had announced that it was acquiring a small equity stake (less than 1%) in the lidar company and that it planned to use Luminar’s technology in future vehicles—though no timeline was disclosed at that time.

In a press release accompanying the announcement, Luminar and Mercedes called the new expansion of that earlier agreement “a milestone moment for the two companies and the industry,” and held that the relationship could “substantially enhance the technical capabilities and safety of conditionally automated driving systems.”

Toward level 3 autonomy

Mercedes has already offered “level 3” autonomous driving in some of its top-end models. (In level 3 autonomy, or conditionally automated driving, the vehicle can make a range of decisions and controls many safety-critical features, but the driver must still be ready to take the helm if needed.) The current Mercedes system, trade-named Drive Pilot, uses the Valeo Scala 2 second-generation lidar system.

The agreement with Luminar envisions a much wider rollout of the technology. “We want to implement advanced automated driving features in a broader scale within our portfolio,” Markus Schäfer, Mercedes-Benz Group’s chief technology officer for development and procurement, said in a press release accompanying the announcement. “I am convinced that Luminar is a great partner to help realize our vision and roadmap for automated and accident-free driving.”

The companies also believe that Luminar’s Iris sensors will enable better performance for Drive Pilot. While the current Drive Pilot system offers level 3 autonomy at speeds of up to 60 kph (around 40 mph), the company reportedly hopes to double that, reaching freeway speeds, in the next-gen version that includes the Luminar device. The two firms also promise “enhanced driver assistance” in urban environments, and better design integration for “a sleeker profile.”

New factory will support production

To support the expanded Iris production under the Mercedes deal, Luminar plans to build a new factory in Asia. Luminar says the factory will be devoted almost entirely to Mercedes-related production.

Luminar is one of a clutch of lidar and other photonics companies that went public during the 2020–2021 boom in public offerings through special-purpose acquisition companies (SPACs). As with other participants in that initial boom, the firm’s shares—under the ticker symbol LAZR—now trade below their initial listing price and the nominal SPAC value of US$10 per share. Still, the Mercedes announcement led to a nice bounce in the LAZR share price, which expanded by nearly a third, from US$5.82 to US$7.28, on the day of the announcement and had trended up further, to around US$8.30, by 24 February.

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