What happened

Shares of lidar maker Luminar Technologies (LAZR 9.76%) opened sharply higher on Thursday, after the company announced a new deal to supply lidar systems to Daimler's (MBGY.Y 3.81%) Mercedes-Benz unit. As part of the deal, Mercedes will also take a stake in Luminar. 

As of 11 a.m. ET today, Luminar's shares were up about 18.8% from Wednesday's closing price.

So what

Luminar and Mercedes-Benz said that they had agreed to a partnership "to accelerate the development of future highly automated driving technologies for Mercedes passenger cars." As part of the deal, Daimler's North American business unit will take a stake in Luminar. 

Russell and Schäfer are shown standing in front of a covered vehicle.

Luminar CEO Austin Russell (left) with Daimler chief technology officer Markus Schäfer. Image source: Luminar Technologies.

The companies didn't share a whole lot of details around their new arrangement. Here's what we know from the press release and a related regulatory filing.

  • Daimler will "develop and integrate [Luminar's] technology on its next-generation series production passenger vehicles." (They'll be Mercedes-Benz models, but we don't know which ones, or when they'll go into production.) 
  • Daimler will share relevant data from test vehicles and production vehicles with Luminar.
  • Daimler will receive 1.5 million shares of Luminar in a series of tranches over time, as certain (undisclosed) milestones are met. (At current prices, that's roughly $22.5 million worth of stock.) 

Luminar CEO Austin Russell described the deal as a "landmark moment in the industry" that demonstrates how "substantially increased safety and autonomous driving functions on consumer vehicles are going from sci-fi to mainstream." 

Most experts see lidar as a crucial component of driverless-vehicle systems. Luminar, which went public via a reverse merger with a special-purpose acquisition company last year, has spent several years tailoring its products for automotive applications.  

That's why Luminar's stock is up today.

Now what

Luminar hasn't set a date for its fourth-quarter and full-year 2021 earnings report, but past practice suggests that it'll happen in mid-February. Investors eager to know more about the status of the company's go-to-market plan and its recent deals with Mercedes-Benz and Volvo Cars (VLVO.F -2.97%) should plan to listen in to the company's earnings call next month.