The drop comes on the back of a broader sell-off in growth and tech stocks, and Luminar, which has yet to begin commercial production, has been badly impacted. That said, there have been a couple of positive developments from the company in recent weeks.įirstly, the company is looking to transition from being just a lidar vendor into a full-stack autonomous vehicle player, with its Sentinel autonomous system developed in collaboration with Volvo’s subsidiary, Zenseact. The system will integrate Luminar’s perception software, its Iris lidar, and related components with Zenseact’s autonomous driving software. The stock also remains down by about 13% over the last month. Luminar (NASDAQ:LAZR), a company that develops lidar sensors, has seen its stock decline by about 18% over the last week to about $24 per share. While Luminar stock jumped by close to 10% last Thursday, following the news, it has largely given up the gains since then. There is also a possibility that Tesla is de-risking its reliance on a single technology, by testing self-driving capabilities using alternative hardware, given the high stakes involved in the self-driving race. Investors also seem to think this won’t have a long-term impact.

It’s more likely that Tesla was only benchmarking the lidar technology against its own camera-based system. The company has been equipping camera hardware as standard in every vehicle it has delivered since 2016, enabling users to unlock capabilities by paying for software. It isn’t clear if Tesla actually intends to use lidar in its vehicles, considering that the company has invested significantly in camera-based systems. While having the world’s most valuable auto company test out hardware might appear positive for a fledgling company, it probably doesn’t mean too much for Luminar. This is interesting, considering that Tesla relies on a camera-based system for its autonomous-driving system, with CEO Elon Musk previously dismissing the use of laser-based sensors, produced by the likes of Luminar, as unnecessary. Luminar (NASDAQ: LAZR), a company that develops lidar sensors for use in self-driving cars, saw its stock move considerably late last week, following reports that EV behemoth Tesla was spotted testing Luminar’s sensors on its vehicles. The company has also been securing its supply chain, announcing that it would acquire OptoGration, a company that designs and manufactures crucial InGaAs photodetector chips that go into Luminar’s mass-market Iris sensors.

The company is also making progress with its commercialization plans, as it began producing sample versions of lidar sensors at a contract manufacturing facility in Monterrey, Mexico, with mass production likely to begin by the end of 2022. Luminar has production program partnerships with OEMs including Volvo, Daimler Trucks, and China’s largest auto company SAIC SAIC besides holding another 14 opportunities at advanced stages. Automakers are pivoting at a faster than expected pace to electric vehicles, and self-driving technology, which is increasingly viewed as a default feature in premium EVs, should stand to gain traction. Although valuing Luminar stock is somewhat tricky, given that it hasn’t started commercial operations yet, we think the risk-to-reward prospects are looking better following the big sell-off.

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