What happened
Shares of new public lidar sensor maker Luminar Technologies (NASDAQ: LAZR) fell sharply on Tuesday afternoon after Reuters reported that one of its key customers could choose to build its own lidar units instead of buying Luminar’s.
The company was trading higher earlier in the day, but as of 3:00 p.m. EST, Luminar shares were about 14% lower than Monday’s closing price.
And then
Reuters reported that the CEO of Intel (NASDAQ: INTC) subsidiary Mobileye, which is developing a new self-driving car system it expects to launch in 2025, said the company is considering developing its own lidar sensor.
In November, Mobileye said it had selected Luminar to deliver its lidar units from 2022; That deal has contributed to strong investor interest in Luminar’s stock, which was made public earlier this month following a merger with a special purpose acquisition company.
Luminar lidar sensors are designed to be easily integrated into mass-produced vehicles. Image Source: Luminar Technologies.
Mobileye plans to launch level 4 self-driving taxi fleets in several cities around the world, including Tel Aviv, Dubai, Paris and Daegu, South Korea. While Mobileye and Intel will provide the main components, the vehicles will be manufactured by the Chinese electric vehicle manufacturer itself NIO (NYSE: NIO). Mobileye and NIO signed a strategic partnership agreement in November 2019.
Until now, it seemed that many auto investors like Luminar would be riding that venture with highly regarded Mobileye and fast-growing NIO. That assumption is now being called into question, which is why the stock fell on Tuesday afternoon.
What now
Luminar certainly has other customers, including the heavy truck van Mercedes-Benz parent company Daimler AG, and Volvo Cars (owned by Geely Automobile Holdings in China), which expects to integrate Luminar hardware and software into some of its vehicles by 2022.
The takeaway is that if – as – the Mobileye deal fails, Luminar has a few other major deals and is currently negotiating to win more. In other words, not all would be lost, but it would be a blow to the new public company.