The Six Five team discusses Luminar’s multibillion dollar Mercedes deal.
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Transcript:
Daniel Newman: Mercedes-Benz have been busy making headlines with chip makers that are focused in the auto space. A few weeks ago, Pat, we talked about Mercedes and Qualcomm’s tie-up for F1 after a year with Ferrari, and now you’ve got a bit of more practical go-to-market announcement here with Luminar. Luminar, we’ve talked a lot about, putting their multi-sensor and production with a focus on Lidar and had made big announcements, Pat, with Polaris, with Volvo. We were at CES doing video in the booth with Austin Russell, the CEO, and his team. One of the things is we’re really starting to see what’s been an idea and a capability and a more secure, a safe way to move people about using the third sensor. You got vision and radar and you got to add Lidar. And so, Mercedes-Benz being an absolute staple brand is going the opposite route of Tesla, which has leaned in completely on vision, and is saying they’re going to put Lidar into a large mix of the portfolio, and they’re going to do this by the middle of the decade. This is short term, and for Luminar, a company that’s starting to generate revenue but really only a small percentage of its potential in terms of design wind dollars, an announcement like this is just tremendous for the company. It actually saw the stock go up 25% the day this announcement came out.
Some of the things that are specific is really incorporation of L3 Technologies. Some of this is going to enable drivers to be hands off the wheel up to about 80 miles an hour, 130 kilometers an hour. This is something that’s going to be enabled by Lidar. If anybody’s seen, Pat and I have shared a number of times some of the different tests of where Lidar versus traditional vision as the sensor technology for safety in the vehicle, Lidar seems to add a tremendous element of safety and driver security that vision alone isn’t accomplishing.
That’s what I keep leaning into, is at some point these car companies are going to have to be accountable to delivering safe vehicles when there’s technology available. This is getting down to the point where it can be done at… I’ve heard numbers of around $1,000 a vehicle to say, “Hey, on a premium car like a Mercedes or a Volvo, the Polestar, it’s starting to make a lot of sense,” and this is something that Luminar should be excited about because it’s in the US now, it’s on an international basis, these are big brands. And of course, you saw they had some announcements of Chinese automakers that are also including their technology. So the volume is starting to ramp. And for those that are invested in Luminar… By the way, company has its investor meeting coming up I believe next week. You and I won’t be there because we’ll be here at Mobile World. But a lot going on, a lot of momentum for Luminar. I think this announcement, Mercedes is a staple brand with global recognition, and choosing Luminar is quite a coup for the company.
Patrick Moorhead: Yeah, their stock went up 29% in one day. I think it was in the toilet for all the wrong reasons, so it was good to see the company get a little bit more credit for what they’re doing. I do understand the trade-off, viewers and listeners, in that Elon Musk believes that he can accomplish this, as Dan said, through vision and even certain different types of vision where it can see in the dark. The thesis behind that is also that you minimize the amount of data coming in so you have less to process. When you add vision, radar, and Lidar, there simply is more data to process, and that means you have to have a much bigger compute engine in there to make sense particularly for autonomous driving. But I think what we’ve seen is even for an L3 or an L2 Plus, that is the case as well.
In 2018, Elon Musk said that his software would be able to do a coast to coast trip. We are now in 2023, you do the math, around five years, it still hasn’t happened. So that thesis of a single sensor type I think is a bust. If nothing else, I think it’s a bust because Tesla is putting radar back into the design. I stick firmly to my thesis that says you cannot have a safe autonomous driving car on vision alone and you do need Lidar. Lidar can see in the dark, Lidar can see far, it can see through fog, and it creates 3D maps along the way that can help drivers around it here. I just love the openness of multi-billion dollar deal with Mercedes. Dan, you are right, the cogs, I have been told they can sell it to an OEM or an ODM for less than $1,000 right now. And then the next generation with the shrink it gets down even further. So congratulations to the folks at Luminar. It’s good to see external recognition of something that I think you and I already knew.
Daniel Newman: Yeah, it absolutely hit the nail on that one, and it’ll be a big moment for Luminar to break through into the mainstream, which it’s been doing over the last few years, which has been a good part of the reason why we continue to talk about that company as a definite player in the space.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
