Q1 2021 Luminar Technologies Inc Earnings Presentation
Last quarter, we made the transition from a lidar company to a lidar led autonomous vehicle company, combining our software with Volvo's autonomous software subsidiaries and SAP as well as partnering with the largest automaker and China SAIC.
We've continued our win streak across the board and look forward to sharing more and in key areas and business for this update call, including team product production and commercial wins.
And then jumped our CFO, Tom who will share some of the company level annual milestones and where we stand on those that from what we set forth at the beginning of the year.
Let's start with the team.
Can't overemphasize, how critical visits.
This is a technology.
And the industry, that's never existed before and something that we've been having to pioneer at the tip of the spear.
He was even if you have the perfect vision technology or product you need a world class team to be able to execute scale and go to market with commercial wins and build the critical infrastructure for the business too.
And two leadership hiring wins that you've probably seen one of which kicked off the call is trey.
And who is now leading our investor relations as an executive coming from Intel and.
And Alan Prescott, as our Chief legal officer, who has a safety engineer and legal industry leader, who led that team and functional task flow.
What isn't as visible as what we've done in parallel across all the teams to accelerate our ability to execute so far this year, we've already hired nearly 100 additional top notch hardware and software engineers.
Fly chain experts employees and contractors to execute the back half of product industrialization and preparation for series production.
Includes everyone and chief assisted driving and engineer from a top tier one all the way to bringing on a top industry deal executive to lead our corporate development efforts.
Next up.
<unk>.
So first off this is with Iris we've continued to hit our <unk>.
Key milestones and deliverables.
With now multiple key partners already running live with Iris as we optimize it for series production.
We've also continued to quantitatively hit our key Lidar performance metrics, we promised not.
Not just us numbers on a slot.
Our target milestone for the end of the year remains delivering the first see sample, which we remain on track for.
Second from a software standpoint Sentinel following into the introduction of the last quarter. We've kicked off the next phase of our software development and partnership with Zen fact at full speed ahead, leading up to the alpha release before year end, we made two key achievements on this front already since the announcement a couple of months ago.
One we successfully collected on Iris light Arctic it doesn't train and optimize the performance of our perception software, which was executed and.
And two we received the grid and the Green light from Germany to proceed with Sentinel development and testing on public German roads, where our music operations base.
And there's all only reinforcing our transition to a system level autonomous vehicle company and partner moving up and beyond the foundation of our lives.
Next up production.
This area is a key focus for the call with regards to supply chain execution and manufacturing execution on the path for series production.
Today, we've achieved the most significant milestone we've had to date when it comes to advancement towards series production to leaders and advanced electronics and optics production and partnered with us to scale, our product for us and deliver the leading Oems and beyond and in fact, we've already been working closely together for months to get the initial line up and running and it's less.
Our facility in Monterrey, Mexico, as we've mentioned in the video we pulled it off.
So let's go is responsible for product level assembly and fulfillment for fabry net assembled some of the core optical components for us.
Both continue to accelerate and Derisk our plants.
Just as we pioneer this breakthrough technology as well as advanced manufacturing process with pioneer a new manufacturing business model, but the first of its caught.
Enormous that Oems only work directly with legacy tier ones as they've been working with for decades and to have a shot you have to license and technology to those tier ones.
Early on and we knew that while that model was easy and appropriate for less complex technologies or products tier ones had experience with and our prior capacity, we knew that we needed to have ownership over the product process and customer and and if this is going to be successful and for the past five years, we've executed exactly to that retaining 100% on.
Ownership over the product manufacturing process and of course, the economics and relationship with the automakers.
Lastly, when it comes to a commercial standpoint, and major commercial wins, we've been crushing it beyond what we could have imagined at the beginning of the year, just a handful of months ago.
Q1, we announced a big leap forward with two major partnerships.
First from a product standpoint, with Zen fact, and second from a commercial standpoint with SAIC.
So far and Q2, we've continued to diversify beyond our core OEM business, working with leading players and verticals from aircrafts the robo taxis.
And with Airbus is up next division marks a significant milestone for Illumina as our first foray into aviation and nearly one trillion dollar industry on its own and the step and the right direction for the broader automation economy.
Earlier. This week, we also announced another major commercial win with the largest autonomous car company and China, Tony AI since logging their pilot service not long ago, they've driven more than 5 million kilometers across global operational coverage area and five major cities, providing more than 220000 robo taxi ride.
And our business and China is certainly off to an incredible start following our kickoff in the region with SAIC just a couple of months ago.
So in conclusion at this stage and our company execution is everything.
And as you can see we remain diligently focused on delivering our goals and milestones and have been hitting them accordingly from business and execution standpoint, I'm very proud in terms of what we've been able to pull off this past quarter and look forward to taking the industry a step closer to making safety autonomy a reality.
Now I'll hand, it over to Tom to review, our annual goals and milestones as well as permanent.
Boston.
Our focus for this year remains on achieving milestones that will deliver long term shareholder value for lumina and this emerging industry.
At the beginning of the year, we introduced five critical milestones helped you exactly that and measure success for this year.
To the great work of the team a progression so far has us either on track or ahead of schedule to hit each of these milestones, let's review them one by one.
Our first milestone relates to the Iris industrialization and production plant.
This is a multi step plan and as Alison and outlined we took a huge step forward with the process transfer to our contract manufacturing partners and bringing them on line.
The specific milestone is to reach the sea sample stage for Iris by the end of the year, which remains on track.
The next annual milestone relates to software and specifically the alpha release of Sentinel by yearend.
We're continuing to build out perception proactive safety and highway autonomy functionality internally and with our partners and Sac.
We are on track for this milestone and actually play and to show off some of our capabilities before the end of the year.
The third milestone was two and three major commercial programs. This year as Austin mentioned, we've been winning more deals from major players and at a greater pace than anticipated.
We expect to increase this guidance during our next earnings call.
The fourth milestone.
Was to grow our forward looking order books by 40% this year.
Once again, we anticipate increasing this guidance on our next earnings call.
Our final milestone relates to maintaining a strong liquidity profile and cash position with the target to end 2021, with a greater cash balance than where we started the year in the first quarter, we raised $154 million from redeeming their warrants and.
And had a net cash burn of $29 million, putting us well on track to achieve this milestone.
Executing on means by milestones is how we will measure success. This year and the team is off to a great start to achieve or beat each of them.
Before we progressed to Q&A I'd like to share a few updates with regards to our Q1 financials.
Our quarterly financials and the near term are not a good indicator of our longer term profitability potential with <unk>.
Nevertheless continue to execute accordingly, and have some good updates.
Revenue for the first quarter was $5 3 million up 120% from the prior quarter.
One thing worth noting is that while we reported a gross loss for the quarter. This is not reflective of our unit economics, our long term profitability as their additional and onetime Cogs from the initial ramp up of virus production absorption costs from hydro production ramp down and development related expenses related to launching our initial SER.
These production program.
We've maintained a strong liquidity at the end of the quarter with $610 million and cash and equivalents and we had approximately 340 million shares outstanding at the end of the quarter.
Lastly, we are on track to achieve our 2021 revenue balance of $25 million to $30 million.
In closing I'd love to reiterate my thanks, once again for the tire team at lumen are doing a great job. During this past quarter, we're off to a great start in 2021 and with that I'll hand, it over to Trey for Q&A.
And our first question will be from Emmanuel Rosner with Deutsche Bank.
Hi, good evening, everybody. Thanks for taking my question.
So it seems you you've really got three new commercial programs on.
This year between SSC, Cooney AI and Airbus.
And my quirky my understanding and this was the the guide for the full year, So youre, saying it will get.
Raise next quarter, how should how should we understand this.
And you're expecting additional wins for the year and in particular can you provide and update on your.
Pipeline or funnel of opportunities I think last quarter, you were saying, maybe 14 program opportunities and.
The traditional <unk>.
Sure.
So.
First with regards to your later tier last question here. So the pipeline still remains at 14 and as we've kind of moved those two additional ones now into the win category, we replenish them with two additional ones.
Quite frankly with just how much the team is focused on execution and the level of intensity that it takes with each of our customers to convert them from kind of a bad development category into the wing category I went and expect us to make that number higher than 14 are materially higher in the near term here just based.
Upon the level of resource constraints that we've had the second thing I would say is yes, you're right. So.
And so far this year, we've we've won three major wins.
We are.
A lot of them just happened recently, so we're taking a look at our current pipeline are having conversations with our customers not only about potential new business, but the business we've already won.
And the exact programs that they're gonna included in them and we plan to provide updated guidance on higher guidance at our next quarterly earnings call.
And I guess as part of this.
When would you expect traditional on <unk>.
Volume automakers to make sourcing decisions about lidar it feels like so far.
Non specifically just for aluminum, but in general we loved it.
Sourcing decisions seems rather than either the high and automakers or robo taxi commercial vehicle.
Yes.
Or what's your view on timelines for traditional Oems.
Yeah. So when it comes to some of the traditional Oems you know the business has only continued to accelerate as Tom mentioned for the existing programs that we've been working on and when it comes to getting designed into the major platforms. Here you know oftentimes it starts with kind of the lead.
Luxury models and then can expand there on out and then it does and the exact kinds of.
Our.
And the dialogue that we're having in terms of the scope of how the rest of this plays out and.
On the timeline for the launch of the different models and programs, but well when it comes down to it the.
And the OEM side of this this is this is the core and the lifeblood of the business that's been driving this forward and as such the schedule for all of US at the end of the day and they're there and there's no slowing down on that so for for both existing and for ultimately on what will have ahead. So that's why all those things considered on as Tom mentioned wood.
Increasing the guidance next quarter as we continue to get these these new data point says from our recent wins and Tom.
Thanks for capturing later this year.
Okay, Great and then maybe just sign on.
So you and not have two major wins in China between SAIC and and Pony AI can you describe the competitive dynamics over there maybe relative to the U S and Europe.
And may be competing against local suppliers or against some of the.
U S wounds and.
And.
And then if you're able to comment on this but for a program like pone AI would pricing be higher given low volume or generally on robo taxis vs.
Versus traditional automakers.
Yes.
And so I'll say, a generally as kind of a rule of thumb for these program if people come to us when they're when they're really ready to be able to reach that series production phase and when they're starting to make that transition out of development. We generally avoid working with kind of earlier stage programs that.
May or may not materialize or have a lower likelihood of that and that's why we've tried to stick to the major players that have the resources to really be able to put behind it and see it through at the end of the day and yeah, when and when you talk about leaders and their respective fields like SAIC and <unk>.
And even pony here that that's certainly the case for China a.
And beyond when it when it comes down to it you know that that's where again, there's a lot of different approaches that you can take when it comes to the development and testing, but that's the whole point of why we're here and what we're changing.
So taking a holistic step back yeah, I think we continue to certainly see that accelerate and Tom you said are kind of pedal to the metal and.
This is a this is really the start of our operations and trial.
Great. Thank you.
Question is from Duston syringe with Baird and he's on audio only.
Hey, guys. Thanks for taking my question Duston on the line for Trust and.
Was wondering if you could talk a little bit more about Sentinel.
And you received a green light in Germany to develop and test on public roads. I was wondering first if this was a relatively easy process and then what are the implications for testing and development and <unk>.
Other countries do you think it will be easy to test elsewhere, and then I have a follow up thank you.
Yeah. So so when it comes to sense and all of you know theres been a lot of work that we've done and put into place.
And just a second here sorry, just technical adjustment.
So what when and when it comes to Sentinel and this is where we continue to be able to focus on our core development of this you know theres a lot of work that's left to be done to really be able to make this happen and bring us out into and the broader industry.
With the whole point of what we've been doing in Germany, and and Unica, We actually did and Aqua hire of this team brought from Samsung on.
Previously to be able to accelerate the development of this full stack solution and of course, you know recently partnered with with Volvo subsidiaries and tacked on to be able to accelerate this.
We have now really kicked off the actual testing and development on roads and the approval for them from Germany was certainly an important step and that since on the a lot of the development. That's happening there is really being realized and test it and Germany itself.
And that's where we are of course, having a global scope of the overall deployment.
But testing and validation is a critical part of all of these processes and for for the until it actually production ready you know you need to be able to have permission to do that.
Got it okay and as a follow up I was wondering if you guys can talk a little bit more about Airbus up next and your partnership there and more detail.
On what vehicles do you think your lidar sensors will be placed on what problems are really solving and then finally, you know given that solving the autonomy problem and cars and trucks already it's hard enough. How feasible do you think lidar is and flight given that they travel at El <unk>.
And similar speeds and completely undefined environments.
So if a in some ways the autonomous flying problem is easier and defense debt.
There are a lot fewer obstacles that you don't necessarily and counter in flight.
At the same time and it's more difficult in the sense that you need to have.
A critical level of reliability that and to be achieved to be able to make this a safe and autonomous and that's really the whole point of what we're enabling is to be able to better enable autonomous flight on everything from starting on on helicopters and moving all the way to VITAS and ultimately.
Things like fixed wing aircraft in terms of the kinds of capabilities that can have a what were specifically designed into is there vertex platform as they call. It.
Which is basically to be able to demonstrate and prove out and validate these safety improvements and capabilities. They have on these flights and what day of are of course, a certain set of program milestones and everything that they've been delivering that on but basically we are designed into that platform and solution and they can then be.
Ranch off into the different areas. So of course aviation is kind of its own world and has its own aspects to it there's a little bit different than the vehicle platform side, but this is kind of the key first step and it.
And we thought it couldn't couldn't think of them and find a better a player to be able to work with and the largest aviation comment.
Okay, great. Thank you.
Yeah.
Our next question is from Gus Richard with Northland.
Yes. Thanks for taking the question I was hoping you could give a little bit of and update on your work with mobile at this point.
Yeah, so that certainly.
Certainly continuing I think when it comes down to it and one of the things that we mentioned is that we now have actually been deploying iris.
Multiple programs and customers at this stage so.
And I'd be careful not to not to comment on anything related to customer confidentiality, but things.
Things are absolutely continuing full speed ahead with.
The program there's no.
Otherwise significant update other than.
We're now deploying this in and in a more widespread capacity across the board with the key programs and launch programs and customers and are going to continue.
And to deliver against the execution plan, leading up to the start of production dates of our various programs that we have been designed to do.
Got it and then in terms of production you've got units coming off the line in <unk> and in Mexico.
And sort of what what run rate are you at now and are these.
<unk> B samples.
Are they and the maturation and the product.
Right right. So as of as of today, you know as we speak until we actually just gotten things up and running with those guys and online.
So a part and part of what we're on we're building out is you know for our capacity kind of and then there would be capable of and the tens of thousands of units annually per line in terms of what we're building out in time and in terms of that and then part of the advantage of working with folks like Celestica is that its very scalable. So you can basically just the amount of lines that you need and a modular capacity to be.
To fit the dynamic nature of what this industry is and how this scales. So.
That's what the plan that we've been executing to and this is really all leading up to.
Start of production before the end of next year, and that's where with these programs, we're working hand in hand, and they're coming and auditing the facility our process and and what we have to do in terms of this process transfer, but we've had that well underway we're off to a great start and we've proven that it actually works and.
The model works.
And then what has been the customer.
Interest and Sentinel.
You know.
You know how widespread is and isn't half of engagements.
Little bit of a sense of how many customers are interested and just a sensor and how much one just perception and and then the full stack.
Yeah, Yeah, so let's say, it's one when it comes to the full stack I would say.
80% of the broader automotive ecosystem.
Has to have some either sentinel or some equivalent of this if they actually want to be successful and deploying you know passenger vehicle autonomy and he's kind of proactive safety capabilities because when.
And when it comes down to it.
There really isn't.
Because most of them don't actually have the internal development capabilities and expertise and knowhow and to be able to really make this happen in the first place and that was part of the inspiration.
And so we've been good and continues through the development process and engaging and a number of conversations with all of these guys are some of which we've already seen it start to be adopted and we it's not actually on all for one either some automakers have certain software components that they've been they've developed in house and and are taking it and no more ala carte offering on our ultimate.
Our goal is to be able to make sure ensure widespread penetration of Iris but of course, there's also great economics with the software as well, so yeah and safer for us.
I would say it and for some components or at least some components of Sentinel. The majority of customers do have interest and that's and that's where this is going to be leading up to our alpha release at the end of the year.
Got it okay. Thank you so much.
And next question is from Aileen Smith with Bank of America.
Good afternoon, guys and I wanted to dig in a little bit on Sundance everything serious production lines, and particularly with Airbus at the time I'll find out and kind of like you guys are pretty focused on your product and your addressable market opportunity being at level three far highlight autonomy lessor on a level four or five robo taxis.
And then even lifestyle on non automotive end markets like aerospace and defense and industrial so one of your discussions with new and potential customers over the past few months informed you about teacher product direction, and the relevancy of Lidar and really where do you want us low gas and is the emphasis still on level three plus systems for production and vehicles.
Or are and the recent wins and any way and that could have on the planned traction for highway on tiny being pushed out a lot of that.
Yeah. So on.
So when it comes to our core capabilities and what we're enabling a nothing has changed there.
100% focused on delivering highway autonomy and delivering proactive safety capabilities into these core passenger vehicle production and OEM programs.
That hasnt been slowing down on but.
What has been.
Accelerating as an opportunity for us to leverage is actually some of these other companies. In addition to the major Oems that we see as major players that opportunistically can come up that we can be able to work with to leverage the exact same products and all of the hundreds of millions of investment we put into.
And to this this technology and this business for our Oems, but before these other industries as well and I think the expectation is still absolutely the same that the the only the way that you can build your business you have to have series production and Oems that are going to be driving that volume curve along with this so it's really I.
On the cake you know for these and these other programs and in terms on what we have and what we're winning.
For the right opportunity, though where we're we're certainly not going to say no to it and vice.
First of all we're actually going to work with these companies to be able to ensure that it seen through but we would maintain that the time horizon you know for each and he is different areas is different and it's still actually firmly believes the passenger vehicle OEM market is actually going to be realizing the volume a lot more significantly and sooner than the robot.
Tax and market on that's out there but.
The nice thing is is that.
It is.
He is still Ah and additional opportunity and I don't I don't want to make this sound like you know theres no potential for robo taxis over the long term I actually I'm still bullish on that for like you know.
And just just less over the next handful of years in terms of volumes and we think it's going to ramp up more towards the end of the decade and really through the 2031 other thing and I and I realize I want to make sure. We address one other part also that also relates to a previous question is that.
The question is if something is lower volume do you get higher Asp's and answer is yes.
There is a price volume curve associated with each of these things. So it does make a difference.
Great. That's very helpful. On and then I wanted to understand a bit better and the outsourcing strategy and the announcement around the car and fat.
Brad for the automotive layperson can you describe for us what each of those partners are bringing to the table and so we understand it correctly and apologies expenses.
And I'm answering your question is the manufacturing process separate at all between the channel or is it rather a setup of dual sourcing as it would be pretty standard and the automotive industry.
Yes, so when it comes down to this.
I mean, the reality is this isn't and incredibly intensive process that we have to be able to streamline as much as possible and where we've been building out and focus on building up the supply chain for.
And for this newly developed products and this isn't a commodity this isn't something that's existed for some time. So our whole plan has been to work with the best possible players and each of these respective areas and interpret what they focus on for example, with Fabry net are these guys are historically known for.
And building complex optical assemblies, and doing so with precision optics, and incredibly well and doing so I'm, taking it from a low volume into high volume, helping with Manny.
Manufacturer ability and we're working hand in hand, with that and and that's been great. You know they've been working with and collaborating with our team and Orlando from and advanced manufacturing perspective, and then equivalently with Celestica, they're actually in charge of the overall assembly of the Lidar and the device final Assembly pack out and ship and.
And that's what we've been able to leverage it and outsource with those guys. So it all kind of fits to the broader picture and puzzle you know could we take an approach where for example, we also build it ourselves you know part of the plan in terms of what we have internally is we're actually defining the the the process that capability all the stuff that's really really unique.
And and stuff that relates to us, but what we don't plan to do is also build the whole system and everything and internally actually use these partners exist for.
For a reason and a partner with us and do a great job out of this and in a very cost effective capacity. So it just makes the most sense and it's very modular and scalable you know they already have a lot of capex there too.
And so but it's all about working with the right folks getting the right arrangements in place and setting up the supply chain right and that's exactly what we've done.
Great and and one last question if I may you touched upon and it's a little of that in terms of the hiring efforts of the company over the past few months as you make a shift from a lidar hardware supplier to a lidar land autonomous company and by your definition and are there any technology gaps that you see within the business that you would look to augment thrill.
And and how much and the talent and engineers that you've been hiring would you estimate are more responsible for industrialization and commercialization.
And our existing products and burst is responsible for you and technology and product and element.
Yep Yep.
So I think I think we will probably have.
More and more developments to speak to you know our net next quarter. When it comes to all of those things, but I think you asked a very good question on that and the answer is yes. There are other aspects that aren't maybe as obvious when it comes to the full stack solution in terms of things that we may decide we may not want to specifically do every part of it you know in house I mean part of.
And what we've done for example for the for the strategy and working with folks like us that in fact is that they're actually building on our core module when it comes to the plant and controls actuation and everything associated with with that part of the full stack solution and working with folks like that that can spec out the designs of also certain certain hardware components as well.
On the go along with the holistic solution, but we are continuing to onboard a significant number and both with engineering talent.
As you know did not and from a hardware standpoint, but also significantly from a software standpoint, as well and that's really driving the solution, but we are we're gonna be making our own set of you know for force for certain aspects of it a make versus buy decision so to say when it when it comes to this but are the important part and you start.
With the actual the foundation that can enable all of these guys. Because again you know part of the whole point of this and kind of as it relates to your earlier question is is.
We're doing this to help enable automakers that cant actually.
And they don't have a path forward that don't have a solution unless they can actually.
Or something more holistically and we're really the only ones that can actually do that at this point.
So that's the focus that and make sure that they can get enabled as well and knockout left behind on the autonomy rise.
Great. That's very helpful. Thanks for taking my questions.
Our next question is from E T and the daily with Citi.
Thanks. Good afternoon, just I had four questions on the Airbus agreement first you're talking about the number of light hours per aircraft that you expect.
And maybe talk about the competitive set and whether your architecture and $15 50, maybe is more suitable for aviation applications. And then is there any software component with that and should we expect perhaps more R&D to support these types of programs.
Okay.
Yeah.
A few things there on that.
And are packed into it so.
The first one when it comes down to it for a number of other lidar and it.
Really depends on the on the actual vehicle and everything you know is it a is it a helicopter where youre trying to be able to enable safe landing is it the tall, where youre trying to be able to get a 360 surroundings for urban air mobility is at a fixed wing aircraft and yeah, you can see it scenarios anywhere from one to force sensor or cash.
Operations for each of those different modes of of air transport and but you know depending on forward facing versus 360.
But when it comes down to it.
I think.
Yeah.
From a technology standpoint, the answer is yes. This is well suited to really two things that require high performance systems, there's going to be a lot of different adjacent market applications that can that can benefit from lower performance Lidar systems and and other things that are there I mean part of the whole point of what we've done is we've built to this <unk>.
Credibly stringent and specification, that's what's needed for automotive and all of these different key areas and you have to get simultaneously I mean, the obvious ones that sometimes people will talk about his range and resolution, but there's like <unk> and other things and you have to do and you have to do them, all very well simultaneously and that's that's where we've kind of built dark.
Claim to Fame, that's why we've seen.
And as such adoption with the major Oems and for series production programs, but those benefits do apply into other industries, but E and so it looks like aviation required the utmost level of performance and safety and that's exactly what why is well suited on 15 50 is certainly a significant part of that and kind of going back to the core architecture.
On the same principle applies to cars of course as well.
But but yes, and then lastly from a software standpoint, and addressing that question. The answer is yes. Some of our software is portable into other industries on the full scope and set of software is not necessarily relevant for example.
In other.
And just not yet there arent highways and the Sky. So you know that.
And it's really just kind of more general autonomy and are the most important things are like takeoff and landing and you do need actually some level of perception on that too. So so like you can actually have applicability of the perception part of central what when it comes to that but I would say this.
Software more than anything is focused on enabling Oems and the majority of which they don't actually otherwise how the solution.
So kind of thinking.
A number of moves ahead and this overall game I mean, there are the guys that have that set things up that need a lidar today with this but then there's the guys that.
Don't actually have a plan and that's what we're trying to optimize for.
Perfect. That's very helpful. And then just as a follow up going back to central and you might have actually covered this but a proactive safety and highway economy kind of two separate offerings and then you can can and OEM.
Just just go with one and maybe talk about the progress on the on both and and maybe even though the cost range of how you see proactively highway on them.
Yeah, Yeah, and so and so they are they are two different offerings on that.
Or have there so.
When it comes to the proactive safety capability.
This is the kind of capability that we can see if it can be and and what automakers.
Are asking from us and you'd want to ultimately have a vision of standardizing and across the vehicles, they make of enabling a completely different level and keep ability.
From a safety standard perspective, and such that we can go from starting to try and mitigating accidents and how they happen to actually just be preventing them and the first place and this is a capability that we can offer at a very low cost well to be able to make a standardization and even more capable at the same time, we don't want to give up on the margin for highway autonomy capability of why why do we have like for example, these dynamic pricing.
Models and and other other things that are that are set up.
To enable those and those kinds of things and effectively as upgrade options to the consumer so that that's really division in terms of what we put forth.
What we think proactive safety is going to be the thing when talking about by 2030 or.
And given 2040 of us seeing this ultimately be a requirement for vehicles and actually.
Changing I, you know and when we did the modeling can change the safety factor of the vehicle people fight for like single digit percentage changes and and safety, but this can be up to seven acts in terms of those kinds of capabilities. So that's why we're really focused on it's a really overlooked area of the overall economy landscape and it's something that really nobody has been doing are paying.
Paying attention to it is just the legacy suppliers.
And suppliers that.
They do like camera radar stuff, but that's where we are particularly on the next level and that's also an important aspect of it is the same hardware that enables proactive safety is the same stuff.
And that enables highway autonomy. So you can do over the air upgrades, even after the fact after you buy the car and to have those kinds of capabilities and you already see folks like yeah, obviously different different set of assisted driving capabilities and you can see that folks like the tussles of this world that are already starting to do certain things like that.
With the smart so and then I'll, let Tom comment on some of the economics and how we're seeing that and in terms of the bigger picture sure and what we've said historically and when will actually look at the content per vehicle to borrow a word from the from the auto supply landscape for highway autonomy and this is both a hardware and software are we think it's going to be on the on the order of magnitude of about 20.
And $500 per vehicle for the passenger vehicle space and then for proactive safety, probably somewhere on the order of magnitude of about $1000 per vehicle and so from that perspective, that's how kind of we see the pricing opportunity between the hardware and software and then clearly as you move into the commercial truck and as well as into the robot taxi space. There you were talking.
Multiple sensors per vehicle, but on the passenger vehicle side. Initially we're seeing one sensor per vehicle.
That's all very helpful. Thank you.
And so it's still leave some good room for profit for Veolia.
Thank you.
And next question is from Richard Shannon with Craig Hallum.
Yeah.
Sorry, I'm going to kick off here and thanks for taking my question Scott I wanted to follow up on one Austin and I'm not sure if I understood. Your response on the farmer Celestica dynamics here, whether they're doing exactly the same things or they're doing.
Crossing one after the other subset if you could just describe them or more specifically I just want to make sure understandable.
Yeah absolutely.
David and that next layer of detail. So on so fibernet, there and basically doing the the transceiver are heavily so so basically some of the core optical components that go into it a particular focus on the receiver so they basically take the on the ASIC chip that we make.
And that with our indium gallium arsenide, photodiode on Pakistan, and and automotive grade and and sort of like process and capacity then that shipped off this Alaska and Mexico, where that's integrated as part of the overall final assembly and the device and then ultimately.
And that we shipped off to the and OEM customer. So it's all part of the value stream that kind of fits into play and there's.
Ultimately more than than philosophy on fabric and but those are kind of the two central players with celestica being the company that actually does the final assembly.
And we worked with and to be able to set up a tad test process qualification and validation procedures you know for the actual lidar as it comes off the line. So that's part of what you saw on the video there too with some of the different targets being set up calibration modes and all those other things to be able to do so on and automated capacity that is that does that make sense or kind of what you're looking for it does I missed it I got on a little bit late.
So I missed the video early on so that's probably what I, what I was missing there. Thanks for that my second question was regarding the Ah.
Comments about increasing the order book as you get into the next call is this specifically related to your two most recent deal and CIC.
And he and pony and and not sure what that adds to it and so that takes all the time to understand it or is this also maybe some deals that might be announced between now and the next call or even four even.
Customers and partnerships has been announced even before those two they're just announced a share.
Yes, and specifically, what we're going to be planning to do at our next earnings call is to update the guidance not only on the forward looking order book that you just mentioned, but also the number of our major commercial wins that we expect for the year and the ladder drives the former and so we've had a.
As we mentioned earlier during the prepared remarks.
Better pace of winning than we were expecting and some of them went to just happened recently and so we're going to develop day.
Sit down and look at what we expect to happen between now.
And the rest of the year and not only in terms of how many additional wins and we expect but what that translates into for with regards to the order book growth and.
And we will provide that updated guidance at our next quarterly call and so I think it encompasses a lot of what you just referenced okay. Thanks for those specifics maybe one last question for me Austin and they just kind of big picture long term kind of talked about a two or three different markets. Your passenger car as trucking and then robo taxis.
I made a comment earlier to someone's question about the dynamics and Robo taxis that just kind of broadly speaking and in the last quarter. Since you since your last update and it gets about two months ago. What dynamics are you seeing here in terms of either acceleration or slowdown.
In the passenger car and truck and space, particularly those things are outside of your control no outside of the perceptions back are you seeing them pull forward pushed out and if so can you comment on those drivers.
Yeah, Yeah. So so when it when it comes down to it I think this is where each OEM of course has their own their own program timeline generally theres a lot of time in terms of the lead up to the actual startup production with each of these guys, but I don't think we've seen any kind of monumental wave or shifts there when it when it comes to a couple of them.
And so it absolutely.
The standby the plans and what we are seeing is the Oems, becoming even more and more invested into seeing this through and potentially actually expanding it to more models of vehicles and even they were initially thinking beyond just some of the immediate.
Top of the line of luxury vehicles. So that's kind of where we're in active review with all of these guys.
When it comes down to it I think I'm still bullish on our autonomous trucking as well I think that's where.
The highway autonomy capability and having that constrain use cases is really important of course on various players are at different stages, and I'd say and the overall autonomous trucking space is.
He is actually a little it's a little bit behind the pass car space. When it comes to just overall readiness to really get into production.
So that's gonna be that's going to be a bit of a different timeline, there, but I think over the long term. That's that's that's bullish and then over a little bit of a longer time horizon as well I I like I said I have it.
I just want to make sure that you know we're we're realistic on it so that it's not a it's not a surprise and I'm talking just at the industry level and not just as it relates to US appears from now and a robo taxi overlords arent driving around everywhere and taking everybody between every city you know, it's it's going to it's going to take it's going to take time for this to proliferate, but but again it is one of them.
Incredibly valuable spaces that is it doesn't make a lot of sense and then when it comes to software adoption and everything that has only accelerated for US you know ever since the announcements and all we've seen a huge amount of interest and.
As was mentioned on not just from us.
For both our customers, but also again engage and folks that are our customers that can now become our customers because we have this holistic offering so that's where we're continuing to do that even even before the.
And the full software suite is ready.
I appreciate those thoughts that's awesome and terminals.
And our last caller is David Kelley from Jefferies.
Hey, good afternoon, guys. Thanks for.
Squeezing me in here and just a couple from my end and and maybe starting with <unk>.
Recent announcements SAIC pone AI.
Just hoping to get your thoughts on the China economists opportunity, maybe even high level as a region I guess from our vantage point it feels like the market is perhaps more focused on streamlining autonomous rollout. So curious as to how you think about it top adoption timeline and China versus the U S. Europe.
And and then if the regional opportunity there and your strategy. There has changed at all on the last few months would be great.
Yeah. So our strategy has definitely gotten more aggressive over the past few months I mean, we knew that we wanted to be able to to launch big and bold and that was really to kick off with SAIC in terms of what we were able to do and pull out there.
That's a I think working with some of the key leading players in China is going to be key I think at the same time on what's tough is that just as with a lot of opportunity. There's a lot of noise and I think theres actually like a surprising amount of noise even within China.
And we'll see how the rest of that landscape plays out over the next couple of years. There I think you know.
People are moving very quickly which is great.
It takes time for development, though there really are no shortcuts and I think the important part is as he's taken the high road and not trying to cut corners. When it comes to performance when it comes to safety and when it comes to all of these things.
And that's that's really what the a lot of the top players are doing and thats. The whole point of why they tapped us to to work with them to solve exactly that just like in India, and Europe and the U S. Here.
Said, that's continuing and we're building on the Shanghai office and and that's something that's really just starting here on all of this is kind of coming together and the past few months. So we're having all of this play out and real time, but.
This is as good of a kicked off as we could hope for for our operations in China.
Okay got it that's super helpful. Thank you and and then maybe just as a last one you're off and you've mentioned the recent Oh I get it.
And I think you Might've mentioned 100, plus or so a number of rolls on.
They're just hoping you could maybe frame that for us how that's tracking versus your prior expectations and we.
And have some visibility to it.
The order book ramping here do we.
Expect some more aggressive uptick here in the future.
Yeah. So so we are absolutely aggressively investing into the overall team into these programs you know of course.
Additional program that you take on provides huge opportunity huge growth huge everything. It does take you know kind of incremental resources of course that you invest into it to be able to see that through.
When it comes down to it.
With all of our team I think are.
I think if you.
If you ask anyone within within luminary, Youll, probably get an answer of it it's kind of a miracle how we pulled this off till efficiently in terms of going through the execution path and this is where.
And everyone's been cranking.
Cranking day and day out you know with.
[noise], a relentless approach Oh, and and this maniacal focus at delivery and execution and all of these different milestones that we have to hit and you know for our core product and and the customer milestones associated with each of this so that's been good I the hunter folks is plus or minus.
You know in terms of according to the plan we remain on track with regards to the overall.
Net spend for them over the course of the year, but importantly, more than anything and and and the team always reiterate this I'm always a huge fan and it really I've been I've been fortunate enough to learn this earlier on of just the quality of people and quality of leadership is just so much more important than the absolute quantity and terms.
And what you can do now of course, you still need that to be able to drive like if you want to build and auto green product that actually and he told the specifications even in a perfect world. It's still like a half a billion to a $1 billion worth of investment and years to actually do this and execute but if you. If you want to actually have a shot and seeing it through and you need to have those right team members and place and its really makes it.
All the difference with us. So you know we did a recent highlight.
Highlight we actually have a couple of the <unk>.
Folks here and the room today with you know al as our.
Chief legal officer, and tie and trays and leading our Investor relations, but Theres also a host of other new great hires that we've had that are incredible skill set to levels that I'm sure. We'll have more to talk about two weighted for next quarter.
Alright, great that's really helpful. Thanks again.
Yeah.
Okay and that was our last question from our analysts.
Great well thanks, everyone. This and this has been a hopefully helpful overview of everything and kind of status update in terms of where things stand.
I really couldn't be more excited in terms of where we are and what we've been able to do I think the whole luminaire team would've been blown away. If we if we had heard just a.
Just a year ago, what we would be able to pull off and and accomplished and I think that.
Ah is a big thank you to the entire alumina attainment and that perspective.
And working day and day out to be able to make all of this stuff happened and.
And just getting started so thanks, everyone for joining and we'll see you next time.
Thanks, Matt if you can close on the call.
Yeah.