Mercedes-Benz plans to integrate millions of Luminar's lidar sensors into multiple vehicle models by mid-decade as part of a push that supports new automated-driving features.
The agreement is a "multibillion-dollar deal," the two companies said Wednesday. Terms were not disclosed.
This marks the first time Mercedes has scheduled production of cars equipped with lidar following a yearslong development partnership with Luminar.
Mercedes did not say which vehicle models are first slated to receive the lidar sensors, which help vehicles depict their surroundings and detect obstacles on the road ahead. Nor did the company comment on its specific timetable for starting production of lidar-equipped vehicles.
But the deal, showcased as part of a Mercedes event Wednesday in Sunnyvale, California, is a far-reaching one that could see lidar affixed to a "broad range" of the company's new light-duty vehicles.
"It's definitely a moment for the industry," Luminar CEO Austin Russell told Automotive News. "It's a larger contract than probably everything else in the industry combined at this point."
The deal tracks with a long-term shift away from efforts on fully autonomous vehicles in favor of the development of assisted-driving systems and features where humans still have a prominent and often primary role in the driving process.
From a technology perspective, it underscores lidar's importance as a necessary sensor that complements traditional cameras and radar. As part of the agreement, Luminar's lidar will support features ranging from automated emergency braking to more groundbreaking aspects of automated driving.
Last month, Mercedes-Benz introduced Drive Pilot, a Level 3 automated-driving system that enables vehicles to take both active control and responsibility for operations. The company self-certified the system as road-ready in Nevada.
Future iterations of this system, sometimes known in industry circles as "conditional automation," will depend upon the Luminar lidar to help enable broader use cases and higher speeds.
"We want to implement advanced automated driving features in a broader scale within our portfolio," said Markus Shäfer, a member of the Mercedes-Benz Group board of management and chief technology officer.
Mercedes vehicles will receive the next-generation version of Luminar's Iris sensors, details of which are expected to be announced by the company during an event next week in Orlando, Florida.
The likes of Volvo Cars and Chinese automaker SAIC already have the current version of Iris in series production. Beyond those automakers, Luminar conducts ongoing partnerships with Toyota, Daimler Truck, Polestar and Robotic Research, Airbus, Nissan and others.
Last April, Nissan and Luminar detailed their collaboration and ambitions to equip nearly every new model with lidar as standard equipment by 2030 as part of a bid to improve safety and reduce traffic fatalities.
That's the broad goal. With Mercedes, Russell said, the difference is his company and the automaker now have contractual specifics.
"There is a difference between having it be part of a plan and, you know, signing a multibillion contract to deploy it across the lineup, and having all the different puzzle pieces fully in place," he said.
With the contract inked, Luminar will turn its attention toward planning for increased production of the Iris lidar units. As part of that, Luminar plans to build a "much larger volume" factory in Asia. Further details were not disclosed.