Volvo Abandons LiDAR
The automaker Volvo, which initially made LiDAR optional, has now completely abandoned this technology. The Swedish brand was the largest customer of Luminar, a company specializing in LiDAR manufacturing. In response to Volvo’s decision, Luminar has filed a lawsuit demanding compensation for significant damages.
Changes in Volvo’s Strategy
Many automakers consider LiDAR sensors a key component for advanced autonomous driving systems, and Volvo was one of the first to bet on this technology. The Swedish automaker established an early partnership with the American company Luminar, planning to integrate LiDAR into its new generation of cars. However, this cooperation was abruptly terminated.
At the beginning of the week, Volvo confirmed that the 2026 model year ES90 and EX90 will no longer be offered with the LiDAR sensor, signifying a complete departure from the previous approach. Initially, the technology was standard equipment, then became an option, and now it has been removed entirely.
Reasons for the Decision
As reported by Volvo, the decision was made “to meet customer demand and due to limited LiDAR hardware supply.”
Despite abandoning the important sensor, Volvo insists that the ES90 and EX90 will continue to meet its safety standards and “provide a high level of driver support.” The company did not comment on whether the absence of LiDAR would affect the driver assistance features.
A representative of Volvo Cars USA added that the decision was made “to limit risks in the company’s supply chain, and it is a direct consequence of Luminar’s failure to fulfill its contractual obligations to Volvo Cars.”
Volvo also stated: “The company’s products can ensure a high level of safety and driver support thanks to the powerful base computing hardware of the cars combined with their advanced sensors, with or without LiDAR.”
The automaker acknowledged that the decision would affect some existing customer orders and reported that it is contacting those affected.
Luminar’s Reaction
Unsurprisingly, Luminar is not happy with Volvo’s decision. Back at the end of October, when Volvo made LiDAR optional instead of standard, the sensor manufacturer filed a lawsuit demanding significant compensation. It also warned that recovering these damages might prove impossible.
On November 14th, Luminar confirmed that Volvo had completely terminated the contract. This step deals a serious blow, as Volvo was the company’s largest single client, which may force Luminar to reconsider its long-term prospects in automotive partnerships.
This situation illustrates the complexity of integrating new technologies into mass production, especially when it comes to high safety requirements and the reliability of supply chains. Volvo’s abandonment of LiDAR may indicate a broader trend in the automotive industry, where manufacturers are seeking alternative paths to autonomy, avoiding dependence on expensive or scarce components. For companies like Luminar, this could mean the need to diversify their customer base and adapt to changing market conditions.