Swedish automaker Volvo has cancelled a five-year-old contract with Luminar, the newest escalation in an increasingly-ugly brawl between the lidar sensor firm and its largest buyer.

The struggle is occurring throughout an existential second for Luminar. The corporate just lately defaulted on a number of of its loans. Whereas it’s working with these lenders on a decision, Luminar has warned traders it could should declare chapter.

To stave that off, Luminar just lately laid off 25% of its employees and is attempting to promote itself — or elements of itself — to potential consumers. One among them is Luminar founder Austin Russell, who resigned from the CEO position in Could throughout an ethics inquiry. Luminar can be being investigated by the Securities and Alternate Fee, latest filings reveal.

Volvo isn’t just a Luminar buyer. The 2 firms have spent a lot of the final decade working collectively. Volvo invested in Luminar and helped the Florida-based startup get into a few of its first manufacturing automobiles. (Neither firm instantly responded to requests for remark.)

The connection has been mutually useful. Luminar’s tech gave Volvo the arrogance to dish out large guarantees about making the roads safer by providing automated driving options. Volvo gave Luminar credibility forward of a 2020 SPAC merger that made Russell one of many youngest self-made billionaires ever.

However Luminar has confronted challenges as a public firm. It struggled to diversify away from Volvo, and in 2024 minimize a fifth of its employees whereas deciding to outsource manufacturing of its sensors. Then, in Could of this yr, Russell abruptly resigned as Luminar revealed its board had opened a “code of enterprise conduct and ethics” inquiry.

The struggle with Volvo bubbled to the floor on October 31.

The corporate informed shareholders in a regulatory submitting on that day that Volvo determined to now not make Luminar’s “Iris” lidar a typical sensor on its EX90 and ES90 automobiles. Volvo additionally informed Luminar that it had “deferred” the choice of whether or not to incorporate its next-generation “Halo” sensor within the Swedish automaker’s future automobiles.

Luminar mentioned within the submitting that it had “made a declare towards Volvo for vital damages” and “suspended additional commitments of Iris” for the automaker.

“The Firm is in discussions with Volvo in regards to the dispute; nonetheless, there will be no assurance that the dispute might be resolved favorably or in any respect,” Luminar wrote.

Volvo’s choices weren’t only a risk to Luminar’s income — additionally they had knock-on results for Luminar. Within the October submitting, Luminar mentioned it stopped spending cash on Iris sensors for Volvo, and in flip, the provider that makes the sensors claimed this was a breach of their settlement.