Luminar Technologies Inc., which manufactures sensors for self-driving cars, is looking to increase production while building a cash cushion on its balance sheet.
The Orlando, Florida-based company took advantage of the investor frenzy for public listings by merging with a specialist acquisition company in December.
The transaction provided Luminar with the injection of capital it needed to start producing lidar sensors that use lasers to measure distances and classify objects for autonomous vehicles on a commercial scale, according to CFO Tom Fennimore. As a state-owned company, however, Luminar needs to be mindful of how it spends money, he added.
Luminar has positioned itself in recent years to benefit from the expected rise in autonomous vehicles. He announced partnerships with automakers, including Volvo Cars, which belongs to Chinese group Zhejiang Geely Holding, Daimler AG
truck company and SAIC Motor Corp.
Ltd. to integrate its sensor technology into autonomous vehicle designs.
Sensor technology will be a feature that customers can choose to purchase in certain vehicle models, rather than a standard feature, Fennimore said.
Luminar also began producing sample versions of its sensors last month at a contract manufacturing facility in Monterrey, Mexico. The company expects the facility to produce on a commercial scale by the end of 2022. Luminar declined to comment on the associated costs.
But for Luminar to make a profit, automakers need to demonstrate that their customers are confident in giving up driving. The company expects to be profitable around 2024, an estimate based on volume forecasts from its trading partners, among other data, Fennimore said.
He is also preparing for the unexpected. “If we run into a bump in the road, we want to make sure we’re not spending too much of our money,” he said. The company therefore aims to end 2021 with at least as much cash on its balance sheet as it had at the start of the year. The company had $ 485.7 million in cash – a figure that includes cash and marketable securities – as of December 31, a benchmark for the coming year. During the first quarter, it raised approximately $ 154 million by repurchasing warrants from its PSPC contract. He had $ 610.3 million in cash as of March 31.
Mr Fennimore said his investment priorities for the year include starting production at the Monterrey plant, which is operated by Celestica Inc.,
a Canadian manufacturing company. The company declined to share production targets, but Mr Fennimore said commissioning the facility would put it on the path to profitability. Luminar reported a net loss of $ 362.3 million last year, compared to a net loss of $ 94.7 million in 2019.
Luminar’s business model centers on selling lidar sensors to vehicle manufacturers. The company, which employs around 400 people, in May 2020 signed an agreement with Volvo to incorporate lidar sensors on the roofs of the automaker’s first fully autonomous vehicles from 2022. It also has agreements with the vehicle startup. autonomous Pony.ai. The company has a mix of specific orders and estimated future sales from automakers, according to a spokesperson.
“At the end of the day, no one really knows how much of a volume ramp there will be, which is really going to depend on customer demand,” said Tristan Gerra, managing director of Robert W. Baird & Co., a company investment, referring to the demand for Luminar sensors.
Luminar is focused on developing sensors for vehicles that do not require a human driver for all or part of a trip. This category of vehicles did not represent any sales globally in 2020 and is expected to account for around 1% of sales in 2025 and 2% by 2030, according to data provider IHS Markit. Ltd.
Luminar, established in 2012, could face competition from other lidar companies that could begin commercial production in the coming years, said Richard Shannon, senior research analyst at Craig-Hallum Capital Group LLC, a company of investment. Competitors include companies such as Aeva Technologies Inc.
So far, the company has a leading edge in the market, Shannon said. “They are probably two years ahead of the rest,” he said.
Write to Kristin Broughton at [email protected]
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