TSLA
LAZR
In a surprising twist in the autonomous vehicle industry, Tesla Inc. (NASDAQ:TSLA), once critical of lidar technology for self-driving cars, has now become the largest customer of Luminar Technologies, Inc. (NASDAQ: LAZR). This unexpected development was revealed in Luminar's latest earnings report, where Tesla's contributions exceeded 10% of the company’s revenue in the first quarter of 2024, amounting to over $2 million.
Historically, Tesla’s CEO Elon Musk has been vocal about his skepticism towards lidar, describing it as unnecessary and expensive for autonomous vehicles. Musk’s stance has been that cameras and neural networks suffice for achieving full autonomy. However, the recent financial disclosures indicate a significant pivot in Tesla's approach, with the company intensifying its engagement with lidar technologies.
The first quarter of 2024 showed a 5% revenue decline for Luminar from the previous quarter, largely due to decreased sensor sales to non-automotive sectors. Nonetheless, this was offset by a robust increase in sales to Tesla. Year-over-year, Luminar reported a 45% increase in revenue, although the company still posted a net loss of $(125.7) million, improving from the previous year's $(146.7) million loss.
This strategic customer relationship comes as Luminar announced a 20% reduction in its workforce and plans to outsource much of its lidar sensor production to enhance scalability and operational efficiency.
The relationship between Tesla and Luminar reportedly began around 2021, though details of their collaboration have been sparse. This partnership underscores a significant shift as Tesla prepares to unveil its highly anticipated robotaxi on August 8, which may incorporate advanced lidar-based navigation systems contrary to Musk's earlier criticisms.
The use of lidar technology by Tesla has stirred discussions within the automotive and investment communities, particularly as analysts have recently highlighted challenges in the electric vehicle market, such as affordability and inadequate charging infrastructure, which have impacted demand.
Luminar's stock has seen a significant downturn, losing over 74% in value over the past 12 months. However, investors interested in the evolving dynamics of the autonomous driving technology space might consider exposure through specific ETFs like Direxion Moonshot Innovators ETF (NYSE: MOON) and First Trust Nasdaq Artificial Intelligence And Robotics ETF (NASDAQ: ROBT), which include Luminar Technologies in their holdings.
As the landscape of autonomous vehicle technologies continues to evolve, Tesla’s increasing involvement with lidar might represent a strategic alignment with broader industry trends toward more diverse sensor integration in pursuit of fully autonomous driving capabilities.
