Lidar maker Luminar said Wednesday that Mercedes-Benz will incorporate its sensors and software in a "broad range" of vehicles starting mid-decade, in a significant expansion of an ongoing partnership between the two companies.
Under the expanded deal, Mercedes-Benz will incorporate the next version of Luminar's Iris lidar into an upcoming partially automated driving system that will be made available on many future Mercedes models. Mercedes' new system will allow expanded hands-free operation during highway driving at speeds up to 130 kilometers per hour (81 miles per hour), as well as enhanced driver-assist features in urban environments.
Luminar's shares jumped more than 25% following the announcement.
"We are now set to enable the broadest scale deployment of this technology in the industry," Luminar CEO Austin Russell said. "Mercedes' standards for vehicle safety and performance are among the highest in the industry, and their decision to double down on Luminar reinforces that commitment."
The deal builds on one announced by the two companies in January 2022, in which Mercedes-Benz said it would incorporate Luminar lidar in upcoming high-end models.
"In a first step, we have introduced a Level 3 system in our top-line models," said Markus Schäfer, Mercedes-Benz's chief technology officer, referring to last year's deal with Luminar. "Next, we want to implement advanced automated driving features in a broader scale within our portfolio."
Luminar didn't disclose the expected production volumes, but the company did describe it as a "multibillion dollar" expansion of the earlier deal, and a Luminar spokesperson told CNBC that this new deal is "more than an order of magnitude bigger" than last year's deal with Mercedes-Benz.
Luminar will unveil the next-generation version of its Iris lidar system when it reports its fourth-quarter and full-year results on Tuesday.
—CNBC's Michael Wayland contributed to this report.