MAX Episode #16 - Tom Fennimore, CFO Luminar

In this MAX episode, Lei has a sit down with Tom Fennimore, CFO of Luminar Technologies. 

Luminar is a US technology company that specializes in developing LiDAR for autonomous vehicles. It was founded in 2012 by a then 17-year old Austin Russell and went public on the NASDAQ via a SPAC deal on December 3, 2020. 

For those unfamiliar - LiDAR is an acronym of "light detection and ranging” or "laser imaging, detection, and ranging.” It is a method for determining ranges or distances by targeting an object or a surface with a laser and measuring the time for the reflected light to return to the receiver. LiDAR is also commonly used to make high-resolution maps.

Some of Luminar’s current customers include: Volvo, Mercedes, Mobileye and Polestar and is considered a leader in the very crowded LiDAR space with further expansion plans into the US, European and Chinese markets. 

The LiDAR space is forecasted to grow to well over $3B by 2028 w/ averaging a compounded average growth rate of 18.4% of which Luminar is poised to take a big chunk of with it’s Iris LiDAR sensor and Sentinel self-driving HW/SW stack. 

Transcript

CEM MAX #16 Tom Fennimore, CFO, Luminar
Recorded March 1, 2023

“China is a very important market to us, and we want to be a successful company there.”

Tu Le:
Hi everyone, Tu Le here, one half of the China EVs & More duo. Outside of hosting our weekly live Twitter spaces room and China EVs & More podcast, Lei and I are always kicking around ideas for new ways to inform you, our audience, on all that’s happening around the world in the EV, AV and mobility sectors. When I approached Lei about launching this podcast a couple of years ago, I had anticipated that what happens in China in these sectors would have huge implications globally, and that’s precisely the case, especially in Europe and the United States, the two other largest auto markets. 

Despite all of the drama of 2022, China was still able to lead the world in NEV sales at around 6.5 million units. And it wasn’t even close. That’s almost 100% year-over-year growth, by the way. What’s more? Of the 1.8 million EVs sold in Europe between Q1 and Q3 of 2022, 11% came from Chinese automakers, a significant increase from just 2% in 2020. And that number is only going to grow. That’s why it’s so important to learn and know more about these companies, executives, brands, products, features and services that are already hitting your shores, whether you are a customer, analyst, consultant, banker, but especially if you are a legacy OEM or tier-1. 

I’m pretty confident that there isn’t anyone else out there that can provide you the type of detailed, up-to-date, and accurate coverage, insights and opinions that Lei and I do. Our audience has grown significantly as the podcasts have piled up. So thank you for listening, being curious and keeping us honest. 

I’m very pleased to introduce our latest MAX episode, where we bring you conversations we’ve had with special guests from the EV, AV, chip, battery and mobility space. 

In this MAX episode, Lei has a sit down with Tom Fennimore, CFO of Luminar Technologies. Luminar is a U.S. technology company that specializes in developing LiDAR for autonomous vehicles. It was founded in 2012 by then 17-year-old Austin Russell and went public on the NASDAQ via a SPAC deal on December 3, 2020. For those unfamiliar, LiDAR is an acronym that stands for Light Detection and Ranging, or Laser Imaging Detection and Ranging. It’s a method for determining ranges by targeting an object or a surface with a laser measuring the time the reflected light returns to the receiver. LiDAR is also commonly used to make high resolution maps. Some of Luminar’s current customers include Volvo, Mercedes, Mobileye and Polestar, and Luminar is considered a leader in the very crowded LiDAR space, with further expansion plans into the U.S., European and Chinese markets. The LiDAR space is forecasted to grow to well over $3 billion by 2028, averaging a compounded average growth rate, or CAGR, of 18.4% over that time frame. Of which, Luminar is poised to take a big chunk of with its Iris LiDAR sensor and Sentinel self-driving hardware/software stack. Here’s our conversation with Tom.

Lei Xing:
Good morning, Tom. Thank you for having me. Thank you for the invitation to attend Luminar Day and providing a deep dive into the future technological and strategic roadmap of the company. I was overwhelmed to say the least, you said everything that could be said about a LiDAR company, as well as many things that usually are not said about a LiDAR company. So we will get into some of the topics and subjects that were shared yesterday, including obviously the China activities. But let's start off by you talking a little bit about yourself, tell our audience a little bit about your background and how you got into the LiDAR business.

Tom Fennimore:
Sure. First, thank you for attending Luminar Day yesterday and having me on this podcast and giving the opportunity to share more about Luminar and myself. As you said, my name's Tom Fennimore, I’m the CFO here at Luminar. I've been here for about 3 years. Prior to that, I was covering the automotive industry on Wall Street for about 20 years, including 3 years living in Beijing, China. Those years were 2010, 2011 and 2012. I was asked to go over to the region by Goldman Sachs at the time to help build out the industrial team in China. For me, it was the right time to do it for two reasons. Number one, my wife and I were ready to start our family. So from a personal perspective, it was a good time for her to leave her job and for us to go over to China together. But I think more importantly is, at the time, that's when China became the largest automotive market.

Lei Xing:
2009, yep.

Tom Fennimore:
And as an American, I had zero understanding of China. I saw it growing and know that it was going to become more and more important. From a professional perspective, I wanted to go to China, live there and learn about the country as well as the automotive industry. And I was given the choice between Hong Kong or Beijing and chose Beijing, because it's the capital of China, and Hong Kong, there was a little bit of a different dynamic. 

So I came to Luminar 3 years ago, because I saw this humongous opportunity for LiDAR. When I was at Goldman, we did a lot of work for Mobileye. And so I saw a company that really took some, was a leader in vision-based technology. And saw how that technology can improve safety, how that technology can create new functionality for the vehicle, and as well as how that can create a lot of value. And to me, I thought the LiDAR space, had a similar opportunity to the vision-based base.

Now, I'm sure we'll talk about this. There are a lot of LiDAR companies out there. And how do you select which one is going to be a winner? One of the lessons I learned from covering the automotive space is every company is going to have a very positive view of their technology. But what matters most at the end of the day is who are the OEM and the automakers selecting to put that technology on their vehicle. You can have the best technology in the world, but if the automakers aren't selected to put it on their vehicles, it really doesn't matter. At that time, I heard through the rumor mill that Volvo selected Luminar to put on their vehicles. Volvo has a reputation of being a safety leader and to me that was a very important validation that gave me the confidence that this was a LiDAR company that had a very bright future. I spent a lot of time with Austin and the team, fell in love with them and decided that this was a company and a team that I wanted to be a part of.

Lei Xing:
Ok so this was about three years ago.

Tom Fennimore:
It was right after COVID started. So I decided to move my family across the country in the middle of COVID from Princeton, New Jersey, to California. It's been a great decision and a very fun ride since.

Lei Xing:
So what you're saying is back in 2010, 11, 12, you already had exposure into the China automotive, even though you were in the industrial, a wider scope.

Tom Fennimore:
Yes, and specifically my job at Goldman when I went over there was to cover the global automotive industry. And so I kept that title as well. And so I would say probably over half of my time, all this industrial focused, was spent working with automotive companies.

Lei Xing:
And since then until before COVID, you've been to China many many times, all automotive, or mostly automotive focused.

Tom Fennimore:
Yes, I tried to go several times a year to maintain relationships and the knowledge that I built during my period there. And so now that the travel restrictions have been lifted, we're planning to go to China in the coming weeks here.

Lei Xing:
Me too.

Tom Fennimore:
We really, haven't been since I joined because of COVID. We have been building out our China business, and it's been not the easiest thing to do, because you are unable to actually get on a plane to go to China, but China is a very important market to us, and we want to be a successful company there.

Lei Xing:
Okay, so we'll go back to China, but I wanted talk about the Mercedes deal you announced last week. I was actually at the event. So it was interesting to hear from at least the OEM’s perspective on software and working with you and NVIDIA on the more advanced, higher speed Level 3 application. Talk about that, getting this Mercedes deal. How did that come about? What was the success factor in getting that win? In terms of even, you talked about the expected volume, revenue opportunities, can we say that Mercedes is your biggest customer in terms of revenue opportunities? Is that?

Tom Fennimore:
I think it's fair to say that Mercedes is definitely one of our biggest customers and revenue opportunities, and we're very proud to partner with them. Going back to your original question, why did Mercedes choose Luminar, and our relationship with Mercedes started a few years ago. As you know, Mercedes is already using another LiDAR company, a different technology than ours, the 905 (nm) type. They're putting it on their vehicles today. And that technology can enable certain types of functionalities, but you're limited in terms of how far that technology can see with a high degree of resolution. And that translates into eliminating the safe autonomy technology that that Mercedes wants to in enable, to only certain speeds. And Mercedes realized that if you want to enable this safe autonomous functionality at highway level speeds, especially autobahn level speeds, then you need a LiDAR sensor technology that can see much further.

They surveyed the LiDAR landscape looking for a LiDAR that can meet their specs in terms of seeing very far with a high degree of resolution, they decided to start working with us a couple years ago, initially on a very small portion of their vehicles. As they saw us execute and get more comfortable not only with our technology, but our plan to industrialize it, they decided to give us a significantly more amount of business. We're very proud to have seen our relationship with Mercedes grow, and we continue to look forward with them in the future in terms of actually taking this shared vision we have and taking it to the market.

Lei Xing:
Okay. Now you, the publicly announced deals with Volvo, Polestar, Mercedes, SAIC, how are these deals the same or how are they different? Is there like applications, product, I know Iris+ is for the Mercedes while the current generation is for the others.

Tom Fennimore:
They're all using Iris or a variant like Iris+. And there's a lot of similarities to the architecture. And Tanner talked a lot about that at Luminar Day yesterday. But what these deals have in common is the OEMs are putting our technology on the vehicle to enable what I would say, the next level of ADAS and safety with the ability to deliver truly safe highway autonomy. So in our conversations with the OEMs, the reason they tend to use us is for one of those two reasons or both of those reasons, because our LiDAR can enable it, that next generation safety we call it Proactive Safety. I think you saw some of our demo yesterday at Luminar Day in terms of what that technology is able to do. But more importantly, and you were at our brand new test facility yesterday, 300 meters when you actually see it, it's a very far distance. But if you're traveling at highway level speeds, that's what you, that’s how far you need to see in order to either bring the vehicle to a full stop or do other types of maneuvers to avoid obstacles in the path. So, that is why customers use our LiDAR.

Lei Xing:
Talk a little bit from your perspective, the state of the overall LiDAR competition, the industry. What are you hearing from the OEMs on what they think of this component to enable more advanced levels of autonomous driving, the competitive landscape compared to maybe, I think around 2015, 2016ish, there are a lot of new players starting, at CES (2023), I don't know how many, I counted about 20 LiDAR companies exhibiting at CES, probably there were more. So I’ve been to CES since 2016, every year, and I've never seen this many LiDAR companies in one location exhibiting. So what is your take on the current, the LiDAR landscape?

Tom Fennimore:
There are a lot of LiDAR companies. There have been for the last several years. And each of them has some uniqueness to their product architecture or technology that that individual company believes is the best out there. And so there is, I would describe it as a lot of noise in the industry, in terms of which technology is the best or which product architecture is the best, and it seems like every few months there's this new buzzword that pops up in terms of hey, is this the right technology out there? And it creates a lot of uncertainty out there. What I would say, though, is over the last two years, we are starting to see early signs of rationalization, and I think rationalization is needed in the industry. In this tough environment, we're starting to see some companies run out of cash and go away. We're starting to see some companies come together in a merger. And those are the early signs of kind of an industry consolidation starting to happen. But I think more importantly, what we're also starting to see is our OEM customers are getting a lot smarter on the technology and are a lot more skeptical about some of these stories. And one OEM customer we met at CES said, “there's three types of lies, there's lies, there's damn lies, and then there's LiDAR spec sheets.”

Lei Xing:
That's a good quote.

Tom Fennimore:
And I think there's a lot of truth in that. It's very easy to put a bunch of numbers on a Powerpoint slide. It's more difficult to kind of build a LiDAR prototype that meets those specs, and then it's even more difficult than that to take that LiDAR and build it in scale. This is, and so the OEMs, I would say, are a lot more skeptical. And that works to our advantage, because we are one of the companies, a few companies that tried to do what we say we're going to do. Ultimately these OEMs are going to test any product extensively before they put it on the vehicles. And so, though they do extensive testing on our LiDAR, but I think more importantly, when you see Volvo, Mercedes, Polestar, SAIC, Nissan select our technology. If you're an OEM who wants to put a LiDAR on your vehicle, you're going to talk to us. You may talk to a few other LiDAR companies, but if you're serious about utilizing LiDAR on your vehicle, you have to call Luminar at this stage, just given the other customer wins that we have, given the progress we're talking to basically every customer out there that we want.

Going back to a point I made earlier, the way you differentiate whose technology is viable for the OEM and industry, and who's going to be the winner? It's who are the OEMs electing, because that's what matters. They are the ones that are going to decide which technology is going to be commercialized and which technology they're going to use.

Lei Xing:
One thing you mentioned is making these LiDARs at scale and at quality. So you said that your Monterrey production is going online in Q2, a little bit earlier than expected. What is the biggest,  you think is the big biggest bottleneck in achieving this, making these things. And I’m already thinking of this Chinese competitors. They’ve produce tens of thousands and this year probably will be hundreds of thousands of LiDARs at scale. Quality, I don't know, but they're on vehicles already in huge numbers. How can you deliver? I mean that's everybody's has done, talked the talk. How do you walk the walk?

Tom Fennimore:
That's, look, I understand my, given Luminar, where we are at Luminar. I would say there are a lot of people in the industry, and I would say probably the most frequent question we get is, okay, I get it, you guys have the best technology, but can you actually produce these things in scale? And ultimately while I can walk you through our plan and I can point to the fact that Mercedes, Volvo and Polestar and others have given us more business and they wouldn't have given that to us if they weren’t increasingly confident in our ability to execute. But I'm not ultimately going to be able to prove that until we actually do it. 

Here's what I would say. And our LiDAR, if you remember, is uniquely designed. We really designed the core critical components from scratch. This is not the easiest way to build a LiDAR. The easiest way to build a LiDAR is to build a 905nm LiDAR, because a lot of the existing components are off the shelf. The telecom industry kind of built their ecosystem around that 905, so I can buy lasers off the shelf, I can buy receivers off the shelf, I can buy silicon chips off the shelf. Those are components that have already been industrialized and validated, and then assembling that all together is not that complicated. And so building a 905nm LiDAR is not as difficult as building a 1550nm in scale. A 1550nm, as I said, these are components that we specifically designed to meet those automotive specs. We own, we vertically integrated those key components to help build our competitive mode. But those specific components, we are scaling up and industrializing and bringing those altogether. This is not been done before, and it's not easy. 

You also asked, what is the biggest obstacle. The biggest obstacle in terms of bringing all this tech together and make it work? We've already proven that out. Now that we're scaling up, I wouldn't say there's one major obstacle, but it's dozens of smaller ones that you need to solve in order to industrialize it and make sure that you're able to replicate this manufacturing process in scale. Am I putting enough torque into this type of screw? Is the machine kind of placing this transceiver into the chassis at the right angle? So it's doing all those little things and solving those and making sure that they all work together. So it's more working out the kinks in the manufacturing process as opposed to having a big obstacle and in front of us that were struggling to solve.

Lei Xing:
Yeah, I think you're now into the nitty gritty stage of delivering, right? We talked about that last night. So I want to go into China a little bit. I mean we don't call the this pod China EVs & More without talking about China, right? So, and I was a little bit surprised you spent a considerable amount of time going into the China strategy, because from what I've heard before or at least from the Chinese media, chatter, that, we haven't heard Luminar, I mean the only other thing that the China factor was the SAIC Rising Auto R7 win. But maybe you have to repeat some of what you said, but just quickly, your priorities now going forward in China, what have you done, what do you want to achieve, what are some of the tactics or strategic path that you're taking? Please talk a little bit about that.

Tom Fennimore:
So China is a very important market to us. It's one where we want to continue to be a winner. Now that the travel restrictions are going to be lifted. It's one that we want to accelerate the building of the foundation that we established really over the last year. And our western customers, a lot of their businesses is in China. And so they want to make sure that we have the right local capabilities there to support their business there. We've had some success with some local brand companies like SAIC and Pony.ai. But at the same time, the China market is a little different than the U.S. both in terms of, I would say, the increased complexity of the rules and regulations of how you operate there, but more importantly, what is the ultimate functionality that customers want to use from our LiDAR? I think there's this big trend in China of putting LiDARs on vehicles. As you said before this podcast, some OEMs are just putting it on there to say that they have them on there. I remember talking to one local OEM customer in China and they wanted to put five or six LiDARs on their vehicles and we we're kind of like, what do you want to achieve with that? 

So, when you think about or when an OEM comes to us and says they want to use our LiDAR. Our first question to them is, what is the functionality you want to enable? What do you want to achieve with this? This is an expensive piece of equipment. You can get a lot of value in it, but what do you want this to help the car to do? Is it highway autonomy? Is it next generation proactive safety? In China, I think highway autonomy is going to be important, but maybe less important than it is in Germany where you drive high speeds on the autobahn. Safety, I think is going to be very important in China. One of the things and this is part of the reason why we established our strategic partnership with ECARX, which is a member of the Geely family, is how do we specifically design not only a LiDAR, but the system around the LiDAR, the software, the other sensor suite to achieve the optimal functionality in China. Because it may be a little different than what some of our western customers, especially the high-end ones are looking to do.

We have done a very extensive study of not only the LiDARs out there, but the systems around that LiDAR, what are the sensor suites in there, what chips are they using, what is the cost, what is the functionality it can enable. And because right now, our LiDAR is more expensive than a RoboSense or a Hesai, it has better functionality, but you have to develop that value proposition for the Chinese OEMs, that the functionality enabled by our more expensive LiDAR is worth it, because it can do a lot more than this.

Lei Xing:
The way I would describe Luminar’s China business, or the China factor is that, interestingly enough, all of your announced, maybe except Nissan, your other wins are either Chinese brands or brands under the Geely Group umbrella, even including Mercedes because Geely owns what, 9.7% of Mercedes? So you actually have a lot of “China” business, right? If you think of it that way, what I was going to say is, can we infer with ECARX, that the wider Geely Group could be a potential customer? Is that…

Tom Fennimore?
That’s what we are trying to work towards. So I make a couple observations. One, this trend of putting LiDARs on the vehicles, the western OEMs are noticing, that is creating increased interest by them in LiDARs, specifically our LiDARs. Because China for a lot of them is one of the biggest if not biggest markets. If they see the local competition, particularly from these newer EV companies who are trying to establish themselves as technology leaders, putting LiDAR on the vehicle and trying to differentiate from the technology, they need to be prepared to do the same or else they could lose market share and some of their brand value as being cutting edge on automotive technology. That's a trend that we're noticing and that we're seeing there. And it's creating increased demand for our product, because they want to accelerate some of their LiDAR deployment plans, because they see China moving quickly. On the ECARX thing, I wouldn't infer anything yet, but that's what we're working towards, which is how you develop a system that works more for a local China branded vehicle as opposed to a system that was designed by Volvo and Mercedes. I think there's going to be a lot of similarities and a lot of advantages, but there's also going to be differences, because you are right, Hesai and RoboSense, they're out there, they're making good progress in China. But if you can develop a much better functioning system that is maybe a little bit more expensive, that is a solution that can, we think, be very popular among the China OEMs.

Lei Xing:
So what you're saying is you're not definitely competing on price or at least not yet, maybe you differentiate yourself through other ways specifically to China, because…

Tom Fennimore:
Customers choose our tech, customers choose us because they want to put the best technology on the vehicle. Customers, I would be very surprised if they're going to choose us because we're the cheapest LiDAR out there. Having said all that, there is the value proposition. At some point, you have to prove how much better your technology is to justify the higher price, but there's a lot more cost that goes into the system as well. When you look at the other sensors that are required, when you look at the chip that's required, the LiDAR is one of the more expensive things, but the overall system can cost a few thousand dollars as well. And so what the OEM is looking at is not necessarily just the cost of a LiDAR, but what does this system cost? One of the benefits of our LiDAR is the richness of our data, which reduces the need for, maybe the best chip out there, or some of the other sensors. That's what we really want to work with the ECARX team to figure out is, how do you kind of build the right system with the right price point and the right functionality to sell to the local market in China?

Lei Xing:
And then with respect to Pony.ai, if I read correctly in what you said and in the press release, in addition to the commercial trucking, autonomous trucking, you're also working on ADAS, PV ADAS, is that correct? Because they are moving toward that area from the robotaxis.

Tom Fennimore:
I think specifically what we announced what we're working with Pony.ai on is their next generation platform which they're planning to launch in 2025, we're going to be their long-range LiDAR there and then also the commercial trucking side as well. But there's, you know why I think what we said and it was something like there are software and other development opportunities we are working there too. But it's been a great partner of ours and we're looking to expand that partnership over time.

Lei Xing:
Rising Auto just got a win from Hesai. It was publicly announced right before CES I think. What does that mean for you? I mean…

Tom Fennimore:
Well this goes back to the point I’m making earlier here, which is our LiDAR has a certain, we're at a price point that's $1,000 or more. And so we're on the high-end segment of SAIC. My understanding of the specific vehicle line that was rewarded to Hesai is a meaningfully lower price point where you kind of wanted to put on a cheaper LiDAR given the price point of the vehicle. And so during my presentation yesterday, one of the things I highlighted is in that EV segment, about 1/3 of that segment is at price point over RMB250,000, so that's what we're focused on, because we believe that that's at a price point that kind of justifies, easier to justify a $1,000 plus or minus LiDAR. Anything below that, it may make more economic sense to put on a $500, $600, $700 Hesai or RoboSense. So we focus on kind of like that top end that has the price point to support the cost of ours.

Lei Xing:
For Luminar to win in China, do you need to depend on the local Chinese brands more or are you happy with the opportunities provided with something such as a Mercedes which is a global…

Tom Fennimore:
Going back to some of the stats I shared yesterday, half the market is western OEMs. And right now the LiDAR in the autonomous package tends to be sourced globally and shared across the global platform. So just by partnering with the western OEMs, we think that we can be a major player in China. Having said all that, that's not just our strategy. We also want to work with the right local partners. Initially, as I said at that high price point that can justify the cost of an Iris. But what we want to do is develop that more value-oriented solution that would open up more of the market for us.

Lei Xing:
China strategy in terms of execution going forward, what is, this is a question I meant to ask you yesterday. Given the backdrop of the China-U.S. geopolitical climate, some of the requirements, the tit for tat, on data, on security, privacy, all of that. What are the headwinds on you executing your Chinese strategy? What do you need to do to navigate or mitigate around that?

Tom Fennimore:
So there are a few local regulations that are challenges, but not obstacles to growing our business there. A lot of it is related to software and data. My understanding is, for example, LiDAR data is classified as mapping data in China, which means you need to have a special license that only Chinese citizens or Chinese companies can own. That limits our access to that data. It makes us have to make a few additional investments in servers and making sure that we follow those local regulators. And we're going to be good citizens as our China business and we're going to follow all of those and do things the right way to comply with all the local regulations. And we're making those investments in putting them in place. But practically speaking, it also means that we're also going to need the right partners. We're probably not going to be able to do this ourselves. That's why we're looking to partner with folks like ECARX and even Pony.ai, because that can help accelerate some of our development, particularly on the software side in the China market.

Lei Xing:
Let's say by, you gave a number, 2026/2027 is the year you want to achieve one million Luminar LiDARs on vehicles, right, globally. How, maybe until the end of the decade, how many LiDAR players do you think will survive? What’s…

Tom Fennimore:
I feel pretty confident by 2030, there will be a lot less LiDAR companies than there are today. I don't know what the right number is. What we're focused on is to making sure that we at Luminar have as much as a big market share as possible. Yeah, we'd love to get to 100%, practically speaking, not sure that that's possible. But what we want to do is have the number one market share globally and we want to be a major player in China. We think we have the best technology out there. As Austin said in his presentation yesterday, we want to save a lot of lives and that means we need to be a major global player. But there is, for the public companies out there, we track their cash levels and their cash spends, and unless they raise capital soon, we think a lot of them are going to start to run out of money probably about a year from now. I think you've already started to see that happen with a few names out there. But at some point, these companies need to start winning business, or I think their futures are going to be threatened.

Lei Xing:
One question, just thought of this, the manufacturing footprint, you kind of revealed basically that you're looking to set up a plant in China.

Tom Fennimore:
We said Asia.

Lei Xing:
Asia. Well, officially Asia. But my question is, in order to support the long term, those 5 million, one million, 5 million in 2030, you need a plant in Asia to support that right? 

Tom Fennimore:
Yes.

Lei Xing:
And to support your local activities. Let's say a Mercedes is a global win, but you need to, I mean because the reasons you're producing in Mexico right now for, let's say, for the SAIC R7, I don't think that's, in terms of manufacturing, logistics, you have to be local for local. I don't think that is a sustainable way to supply the Chinese players. Is that a fair assessment that you have to produce local for local?

Tom Fennimore:
There's a reason why we're looking to build a new plant in Asia. While we have said Asia, I think it's fair to say that China is one of the locations in Asia that were seriously considering.

Lei Xing:
At the very beginning of yesterday’s event. I think one thing I remember was Austin talking about when there was seat belts, there were air bags, and then there will be Luminar. I think what he's saying is the democratizing safety aspect of LiDAR becoming ubiquitous as seat belts, as their bags, as cameras. 

Tom Fennimore:
That's our goal. 

Lei Xing:
To be standard, not an option, not a privilege, right? It should be standard. When do you think that happens? That nobody talks about cost anymore? Nobody talks about. I mean it's just prerequisite. And even there's some voices in the industry that LiDAR combined maybe, LiDAR will replace some of the existing sensing technologies. Do you see that as well?

Tom Fennimore:
Yes. We think that as people get more comfortable with LiDAR technology, which is relatively new today, there is the opportunity to maybe take some of the others, sensor content, reduce that on the vehicle, but I think you're going to need to see the technology on the road and get a lot of reps before the OEMs become comfortable doing that. Going back to your earlier question, which is how do you, when does this become standardized? We're seeing some early signs of that with all those standardizing us on the EX90. If you kind of heard what Nissan is saying, this next generation safety system they're developing with our LiDAR on it. They want to put that on virtually every vehicle they make by 2030. So there are some early signs on that, but I think what's really going to accelerate that is getting our technology out on the road, developing the real life data set that this is going to save a lot of lives, bringing the cost down with our next-gen product. And at that point, you have a, the regulators are probably going to start to notice that this technology works, it's affordable, it saves a lot of lives. That's where you may start to get a regulatory pull. Maybe not mandates, but it could be, if you want your five-star crash test rating or your NCAP, the right NCAP rating, that's, that may be a quicker path to creating that regulatory pull for this technology.

Lei Xing:
Yeah, I remember seven years ago talking to Swamy, CEO of Magna at CES, we were talking about backup cameras being standard on vehicles and how that took so many years to be standardized. So maybe one day we'll see similar thing happen to LiDARs down the road. I think that's it. I think we covered pretty much everything.

Tom Fennimore:
Great. So thank you for having me.

Lei Xing:
Thank you for your time, yesterday and today. One on one. I'm still processing yesterday’s, because there was so much information. That was overwhelming, like I said. And I think your competitors will probably start doing similar things on giving their own kind of roadmap and doing similar things because when I talk to them, some of the things that you kind of revealed yesterday are not really talked about, cost, all that stuff, it's, some of it is very suspenseful and secret, but you kind of opened the books almost.

Tom Fennimore:
And a lot of that stuff we shared yesterday, while it maybe the first time we talked about it publicly, we've been working on a lot of that stuff for a while. And I wouldn't necessarily assume we shared yesterday everything that we're working on.

Lei Xing:
Yeah, sure. You're a public company, right? So you have to share we have to share. 

Tom Fennimore:
Thank you!

Lei Xing:
Thank you!

Lei Xing:
Hi, this is your co-host Lei Xing. When China EVs & More approached Luminar about doing a podcast with CEO Austin Russell, the company suggested we talk to CFO Tom Fennimore instead because of his experience living in China and knowledge of the Chinese auto market. Well, it’s no surprise that Tom says China is Luminar’s most important market because that’s where LiDARs are appearing more and more on vehicles, and that is already influencing what’s happening elsewhere, such as Luminar’s partnership with Mercedes. Luminar is really lucky to have Tom as CFO and someone who has the China exposure and understanding of the business and cultural dynamics that hopefully will translate to a smooth market entry and execution of the company’s strategy there. Positioned perhaps as the “Mercedes” of the LiDAR space, Luminar over the coming months and years still needs to prove its LiDARs do make it onto vehicles in China and globally at the volumes in the millions as it projected at Luminar Day. We wish Tom, Austin and the team the best of luck. 

Tu Le:
Lei and I will be sharing more of our conversations with the men & women around the world moving the EV, AV and mobility sectors forward as part of this China EVs & More MAX series. Some folks will be instantly recognizable, but some will just be people that are doing amazing things in the space that we think deserve to be highlighted. Don’t worry though, Lei and I will continue to host our live weekly China EVs & More Twitter Spaces room that summarizes that week’s most important news coming out of the China EV, AV and mobility space. For those that can’t catch the live show, you can find the China EVs & More pod on all major platforms or wherever you normally get your podcasts. 

As EV adoption reaches its global tipping point, it’ll be even more important to stay updated on everything that’s happening here. Lei and I are confident that China EVs & More is the best resource to do that. Until next time, as always, thanks for listening!