In a surprising shift that has sent ripples through the autonomous driving industry, Volvo Cars has announced it is abandoning lidar technology for its upcoming models, severing ties with supplier Luminar Technologies. This decision comes after years of touting lidar as a cornerstone for advanced safety and self-driving features. According to recent reports, the move is driven more by supplier disputes than doubts about the technology itself.

The Swedish automaker, owned by China’s Geely, had previously integrated Luminar’s lidar sensors into vehicles like the EX90 SUV, positioning itself as a leader in autonomous tech. But now, Volvo assures that its cars can achieve high safety levels without lidar, joining ranks with companies like Tesla that have long eschewed the technology.

The Partnership’s Rocky Road

Volvo’s relationship with Luminar began in 2020, with promises of low-cost lidar integration starting in 2022 models. Design News reported on the partnership, highlighting how it could make Volvo an industry leader in autonomy. Luminar’s tech was set to feature in the SPA 2 platform, integrated into vehicle roofs for enhanced perception.

However, tensions escalated recently. On November 17, 2025, Reuters revealed Volvo’s decision to discontinue the relationship amid ongoing conflicts. The automaker confirmed it would remove lidar from its 2026 ES90 and EX90 models, a move that has fueled bankruptcy concerns for Luminar.

Luminar’s Precarious Position

Luminar, a Florida-based company founded in 2012, has relied heavily on partnerships with giants like Volvo, Mercedes-Benz, and Nvidia. The firm’s shares surged in March 2025 after announcing its tech for the ES90, as noted by Hi-Plains Coop. Yet, the termination has been a severe blow.

InsideEVs reported on November 18, 2025, that Volvo’s reversal on making lidar standard in flagship EVs has heightened fears of Luminar’s insolvency. “Luminar is now unofficially dead,” echoed sentiments from posts on X, reflecting industry pessimism.

Volvo’s Assurance on Safety

Despite the pivot, Volvo emphasizes that safety remains paramount. The Drive quoted the company stating its vehicles can deliver high safety without lidar, relying instead on cameras, radar, and advanced software. This aligns with broader trends where firms like Tesla have achieved promising autonomy results sans lidar.

The decision appears tied to supplier issues rather than technical flaws. The Truth About Cars noted on November 18, 2025, that Volvo was ‘wholly committed’ to lidar but is now abandoning it due to problems with Luminar, not the tech’s efficacy.

Industry-Wide Implications

The autonomous driving sector is watching closely. While lidar—using laser pulses for precise 3D mapping—has been hailed as essential by some, others argue it’s costly and redundant. Tesla’s Elon Musk has famously dismissed lidar as a ‘crutch,’ opting for vision-based systems.

Volvo’s move could signal a broader reevaluation. Drive Tesla reported on November 18, 2025, that this ‘major course correction’ affects advanced driver assistance systems. Meanwhile, companies like Waymo and Cruise continue betting on lidar-heavy approaches.

Evolving Autonomous Strategies

Beyond passenger cars, Volvo is advancing autonomy in commercial vehicles. Volvo Group highlighted in May 2024 the VNL Autonomous truck, designed with redundancy for driverless transport, though it doesn’t specify lidar use.

In January 2024, Volvo Trucks discussed its Autonomous Solutions division, pushing commercial autonomy. This contrasts with the consumer side’s lidar abandonment, suggesting a segmented strategy.

Market Sentiment and Reactions

Posts on X reflect mixed reactions. Some users lamented Volvo’s earlier EV-only pledge by 2030, which was walked back in September 2024 due to market conditions, as shared by accounts like PeterSweden and Mike Graham. Recent posts from November 2025, such as from Drive Tesla and kmartyn, underscore the lidar fallout’s severity for Luminar.

Analysts see this as part of a maturing industry. autoevolution described on November 18, 2025, how Volvo ‘nailed the coffin’ for Luminar by canceling a five-year contract mid-conflict.

Looking Ahead in Autonomy

Volvo’s pivot may accelerate innovation in alternative sensors. With lidar costs dropping but integration challenges persisting, the industry could shift toward AI-driven vision systems. Volvo’s history of safety innovation—introducing three-point seatbelts in 1959—suggests this isn’t a retreat but an adaptation.

As autonomous tech evolves, regulatory hurdles and consumer trust remain key. The European Union and U.S. are tightening self-driving standards, potentially favoring flexible approaches like Volvo’s new path.

Strategic Shifts and Competitor Moves

Competitors are recalibrating too. Mercedes-Benz, another Luminar partner, may reassess ties. Meanwhile, optics.org recalled in 2020 Volvo’s lidar ambitions, now contrasted by this abandonment.

The broader EV market slowdown, as Volvo cited in scrapping its 2030 all-EV goal per posts on X from AR12GAMING and MacroEdge, compounds pressures on tech investments like lidar.

Innovation Without Lidar

Experts argue lidar isn’t indispensable. Companies achieving Level 3 autonomy without it prove software and cameras suffice for many scenarios. Volvo’s confidence in this path could inspire others, reducing costs and simplifying designs.

Ultimately, this saga highlights the volatile nature of tech partnerships in automotive. As Volvo forges ahead, the industry awaits whether ditching lidar proves visionary or a misstep in the race to full autonomy.