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How Luminar is helping to ‘lead the charge’ of the autonomous vehicle industry transformation

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Austin Russell, founder and CEO of Luminar Technologies, joins Yahoo Finance to discuss the state of the lidar market and global chip shortage.

Video Transcript

MYLES UDLAND: Let's get to another part of the market that we have talked quite a bit about over the last few months. And that's what's happening on self-driving technologies. We've seen a number of SPACs come to market. One of the first that we talked to was Luminar Technology. They're building lidar systems for eventual self-driving vehicles.

Joining us now to discuss how development is going with that company is founder and CEO Austin Russell. Austin, great to have you back on the program here. So let's start with the Iris program and as a layman trying to understand exactly where this fits into your eventual production of something that might be in a vehicle that I might drive and sort of what has happened there over the last few months and where that road map is headed.

AUSTIN RUSSELL: Yeah, yeah. No, it's certainly been going well. You know, we just did our whole year in review call into-- or at least for 2020 and kind of highlighted some of those key milestones, really meeting all of the core product, business, commercial, economic milestones. You know, and with Iris specifically, continuing to execute on that. It's a lidar and, really, the first thing that can enable-- that has a specification to enable true autonomy in series production.

And this is where we've been able to continue to successfully execute on it. We proved out the core technology some time ago. And we continued to develop, industrialize leading up to this. So, you know, I'm actually here today in our advanced manufacturing facility that we have stood up for a pilot line in preparation for series production, developing the process for how to successfully assemble these units at scale.

And with that, you know, really just continuing to execute and also no shortage of things going on so far this year with a couple of new key announcements from a commercial standpoint with the launch of sentinel, our whole transformation from a lidar company, so to say, to a broader autonomous vehicle company, as well as continuing to execute commercially with SAIC, China's largest automaker now counting as a partner that we're going into serious production with in China.

MYLES UDLAND: And also, I just want to follow up quickly because in kind of going through a couple of your videos, your presentations, I'm just trying to, I guess, figure out for myself series production and where that fits within the development of a product as you guys are speccing it out, I guess, on the R&D side, and then, actually, where that sits on the road to getting it into vehicles that a consumer might interact with some years down the line.

AUSTIN RUSSELL: Yup, no, totally. And uniquely, we've been able to help lead the charge of the transformation of this autonomous vehicle industry out of R&D and actually into production vehicles. And the key thing is working directly with OEMs to be able to establish these programs to enable what's otherwise historically been largely just testing, with roof racks full of sensing systems and a supercomputer in the trunk and all of these things, to actual systems that can be on the road and even cars that you can buy that have autonomous capabilities and features, now starting out with a constrained scenario of highway autonomy and then expanding outward, in addition to much more advanced active safety features, recall, and proactive safety.

So that's really how this industry is being kicked off and otherwise still fully on track for the-- you know, by year end of next year of the start of production timeline for what we've had. So it's been otherwise good. And that's how you're going to see this industry realized as we kick it off.

JULIE HYMAN: Hey, Austin, it's Julie here. You mentioned in a recent interview, talking about Tesla's so-called autonomous capabilities, which really are not fully autonomous and certainly are not the only one who has said that-- that's been broadly talked about. So when we talk about autonomous, whether it's your senti-- now your sentinel stack going into cars or the Iris product going into cars, what do we mean by autonomous? Like, what is the sort of definition or baseline for what people should expect from autonomy with your products?

AUSTIN RUSSELL: Yeah, so when it comes to autonomy, it involves a much broader picture than just the lidar, so to say. You really have to have a number of different software components that are stacked in there to be able to make all this work. And that's key to actually successfully enabling the OEMs at the end of the day, in addition to, frankly, the majority of them that don't necessarily have all of the infrastructure and teams and everything in place to be able to build a full stack solution.

So that's where, in addition to all of our own work on the software side, we also have-- we partnered with a subsidiary of Volvo called Zenseact that's about a 500 plus person team of software engineers that's been developing the solution for highway autonomy and proactive safety with us here to be able to deploy it with other automakers as well. And that's key to enabling this in a widespread capacity across the industry.

But I'd say when it comes to the self-driving side of this, the key thing here is that there isn't and there hasn't historically been any way to get any kind of true self-driving modality out on the road, or really even dramatically improve vehicle safety by having these new kinds of feature sets. And that's what we're transforming as part of this and kind of leading the charge with. You know, again, when it comes down to it, you're starting with more constrained scenarios for autonomy and then expanding thereon out.

But as part of this, this is where, at the end of the day, in addition to the business and the technology, it's all about lining up the commercial side as well. These things have really long design cycles that can be-- the platforms could last 7 to 10 years, as long as that from the start. And, you know, it has to take a few year lead-up into these automotive platforms. So that's why it's been such a critical time. Got to get designed in and work closely with all of these guys. And that's been our focus to work with the leaders.

JULIE HYMAN: Hey, Austin, has the chip shortage had any effect-- does it play a role in your technology or-- and/or is it limiting the automakers you're working with's capability to have vehicles for you to have development phases in?

AUSTIN RUSSELL: You know, fortunately not. When it comes to this, it's a good question. I'd say, to be honest, a lot of the day-to-day stuff when it comes to the broader automotive industry and all the things that they deal with when managing those complex supply chains and other aspects of the business, is really almost a little bit of noise when it comes to us and our partners. We're extremely focused on seeing this through into these production programs.

And with that, there's still a lot of work and lead-up and everything to do when it comes to this. It's almost-- it's the same reason why COVID doesn't really have any kind of substantial effect here on everything, too. I mean, the launch of everything that we're talking about is starting at SOP before the end of next year. So. It's something that you kind of have to put yourself in the place of OEMs and everything, like, more a year and a half from now than it matters today and exponentially as it scales up. But there's no question that automakers always continue to face the day-to-day challenges with a chip shortage being one of them.

BRIAN SOZZI: Austin, since we talked to you on IPO day back in December, there's been tremendous attention on Luminar, tremendous intention on you as an entrepreneur. How have you just tried to stay grounded on a personal level?

AUSTIN RUSSELL: You know, it's a good question. I think folks on a team can attest. I don't know if anything in terms of the actual business and execution, everything has dramatically or even maybe even changed at all when it comes to it. I mean, you just remain super heads down, focused on how do you successfully ensure that we can enable all of these different key business areas and milestones that we have coming up for the year. There's no shortage of things going on in terms of what we have ahead.

And that really includes everything from the core product side of things and actual preparation for series production. I've mentioned I'm in the advanced manufacturing facility here. You know, getting-- testing through all the auto grade specifications, ramping up the pilot line here for a contract manufacturing process, transfer down in Mexico, building see samples.

To the commercial side, we actually outline a goal of being able to have three kind of major commercial program wins this year, which one of which we've already announced with SAIC, continue sentinel development, and leading up to an alpha release by the end of the year. Growing the forward-looking order book by at least 40%, which is ambitious, but something that I think we'll certainly be able to do by at least that. And then ending the year with a greater cash position than what we started with from some of what's raised from the warrants and otherwise.

So I think we've been in an awesome place on all those things, but try to set some of the metrics for how can people judge us over the course of this year. It sounds ambitious, but we've certainly been able to hit milestones and then some all the way so far. So that's what we're all focused on.

MYLES UDLAND: All right, Austin Russell, founder and CEO of Luminar Technologies. Austin, really appreciate you taking the time to talk with us morning, and I hope to talk soon.