Mercedes-Benz signed a new agreement with Luminar Technologies to develop and integrate its latest lidar products, thus transforming the existing sensor supply agreement.
The German company stated in a statement to Reuters: 'Mercedes-Benz is also collaborating with Luminar to evaluate the next generation of lidar technology.'
Lidar, an acronym for 'Light Detection and Ranging', emits light pulses that reflect off objects to create a three-dimensional view of the world surrounding the vehicle. The global lidar market is small but is experiencing continuous growth as automakers expand self-driving and driver-assistance features.
This contract with the German automotive giant is the first agreement for Luminar's smaller and more efficient Halo lidar sensors, and comes at a time when global automakers are racing to launch safer self-driving vehicles.
Luminar's CEO, Austin Russell, said in an interview: 'Mercedes supports this agreement, and we are working with them globally to develop this technology and integrate it into their cars, with the ultimate goal of producing it at scale.'
Mercedes reported that it is collaborating with several lidar partners, including the French automotive parts company Valeo.
Mercedes signed a supply agreement for 'Iris' lidar devices from Luminar over two years ago and planned to integrate them into vehicles by the middle of the decade. Russell stated that this plan has been postponed in favor of a development agreement for the Halo vehicle, set to launch in 2026, adding that Luminar will work on the development contract with Mercedes over the next two years.
This deal, which was not previously announced, is the first step toward a potential supply agreement, but it does not guarantee it.
Some of Mercedes' luxury models are already equipped with the Valeo lidar system and can drive without continuous human supervision in limited conditions. Mercedes announced that it wants to introduce advanced automated driving features in a broader range of vehicles.
Unlike autonomous taxis, which typically use four or more large lidar sensors that rotate with a 360-degree field of view, luxury personal vehicles usually use one or two smaller sensors, often seen protruding from the vehicle.
Luminar's Halo sensor is smaller and more efficient than the previous generation Iris sensor and can be integrated with the car's roof or positioned behind the windshield.
Mercedes-Benz chose Hesai, the largest Chinese lidar manufacturer, for global markets despite legal and geopolitical risks, due to its lower costs and ability to produce at scale. The latest Hesai ATX lidar sensors cost about $200 each, and Luminar stated to Reuters that the target price for the Halo sensor is $500.
It is common for automakers to collaborate with one or more suppliers to mitigate supply risks, especially during uncertain times such as the ongoing US-China trade war.
Luminar has a manufacturing facility in the United States, but it manufactures most of its lidar devices overseas, with factories in Mexico, Thailand, and China. Russell stated that the company is considering manufacturing Halo devices in the United States if 'the tariff issue is resolved.'