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| That is all upside to our order book as well as our near and medium-term growth |
| So I'm not going to go into much more detail now, but yes, we are getting good commercial traction on the mapping side, and it's another tool in the arsenal when we go in and have those strategic and commercial conversations with our customers |
| You know that's been a huge driver as well in being able to realize success of the ecosystem |
| You can actually get better pricing in this segment, which helps the margins |
| You know we're very proud of the fact, like, look, Volvo said publicly they're going to be launching the EX90 in Q2 |
| So, yes, it's very exciting time |
| So that's of course, for the next-gen stuff, that's what I'm really excited to be able to unveil at Luminar Day, given that the work that we've done for what, like five years now on the back end for this next-generation technology development, and that's where the transformation can happen of whereas Iris, like an Iris+, it's great for what's there |
| The important part is, I think when you talk about value, Luminar as a company is operating in a way to be able to deliver that long-term value overall to our shareholders |
| Certainly going to be enabling a lot of additional operational and economic efficiencies and exponential economic growth as we start realizing these benefits of the economies of scale with this program |
| Very excited about it |
| We're very confident of that |
| The key is just showing also the safety benefits |
| And we've learned a lot and we're going to be doing things better and more efficient |
| So very excited, everyone |
| Of course, we're also focused on driving further the unit economics, but even today, I mean, it is incremental from a variable cost perspective, it is incrementally positive already, which was how we originally underwrote some of the thinking around gross margin more generally on a product basis across the board for the different kinds of product capabilities that we have |
| So that's really the breakthrough objective that we have ahead |
| That's what the industry hasn't done historically to be able to successfully launch, and that's what we're excited to be able to make happen for the first time |
| But it will grow and we are confident that it's going to grow significantly |
| They're not waiting for the next-gen product, although as you can imagine, I think they're very excited about it |
| And I think, just to be frank, there definitely are greater efficiency opportunities, in particular, given this over a billion-dollar investment that we've made historically, we're past that peak of cash spent, and we're riding that tailwind from that big investment that we've made to be able to realize the full benefit for the next decade to come from that technology foundation, product foundation, and industrial capabilities that we built |
| And so I think we're going to have the results of that test very soon and based upon the work that the team has achieved to-date, we are very confident that the results of that test are going to be positive, but when we have official results then we will share more broadly, but that's not something we are losing a lot of sleep at night |
| That's fantastic |
| And as we execute, we have the opportunity to be able to become exactly like that |
| But we have also, in addition to that, been able to continue to scale our business, adding additional vehicle models, commercial programs overall to our business plans |
| We were hoping it will be a little bit better, but it was still a big improvement from what the first half of the year looked like there |
| And as we get more clarity on the ramp-up at Volvo and the corresponding ramp-down in the cost, which is going to be the biggest driver on that, we'll get more clarity but you know, I think it's very safe to say that you're going to see a fair amount of improvement as we get into the latter half of the year |
| And now, okay, like these models are starting to come to fruition, and that's what's at least exciting to me and starting what, in months in the countdown |
| We've learned this over the last three years now we've come out successfully on the other end and we've learned a lot and we're going to apply those learnings to make Luminar leaner and meaner going forward |
| So I think this is where we see this as a big opportunity to drive further adoption throughout the industry |
| Tom Fenimore Oh, believe me, we've learned that the hard way over the last few years, and we've learned a lot, and we're going to become a better company as a result of that |
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| And I would say not only that, is that the kind of stuff that and this is oftentimes very much confused with Luminar and obviously part of the frustration as it relates the broader industry sometimes we get painted with the same brush |
| But I would say that more conservative forecast there kind of was about a $400 million headwind in terms of order book size that we've reported |
| And obviously, we all have very much shared in the frustration from some of this kind of market dislocations and whatnot |
| But the level of competition that we're seeing in these RFQs is declining and there's really only a handful of LiDAR companies, if that, that we think the automakers are seriously considering to deploy on their vehicles in the coming future |
| The most difficult one by far is the first one, which we're more or less there on |
| And what I would say is, in the conversations, we're having with customers, both newer customers and existing customers, there are some macro headwinds that we talked about before, like EV headwinds, and how that impacts our product planning as well as, I would say, some of the software complexity around getting these systems that right |
| It was still a little bit shy than the billion that we forecast because some decisions we were expecting to make in '23 have been deferred into '24 |
| The next 24 plus should be nowhere near the level of difficulty as we just have gone through |
| And I would say we didn't lose anything that we wanted to win |
| Tom Fenimore But I think the tough part is behind us, right? Doing it the first time is the toughest and I would say most of those vehicle lines are using the same product, you know |
| The other thing that I note more generally is that there's really -- this overall notion of COGS is extremely confusing to a point where like I even sort of have to dissect it of what are all the different components that go into this and turns out there's actually a surprising amount of components that go into this, particularly from the industrialization side as well |
| But you also mentioned that industrialization costs should be coming down, and it sounds like there's also some belt-tightening |
| That resulted, I would say if you kind of look at on an apples-to-apples basis relative to the business we already won about a $400 million decrease because I would say, on average, ISS has more conservative volume estimates than I would the more the customer-derived ones that we've used historically |
| We really didn't lose anything that we wanted to win |
| And if we have to spend a little bit more to get there at the sacrifice of our near-term results like what we did in Q4, we're going to make that |
| It's not exactly there yet, but it's going to be there pretty soon, and I would say waiting a few months to get that next better product, as opposed to kind of taking ours, which is a great product today, but taking that for six, 12 months and then transitioning to the next generation one when there's a natural slowing as people revisit their product planning because of the EV headwind, some of the software struggles they're facing, that is kind of aligning |
| This is tough, right? Industrializing this very complicated technology |
| And I'd say it's become abundantly clear that we've all seen all the challenges that the automotive industry has faced historically in being able to develop, industrialize, and enable this whole next generation capabilities on vehicles and bring it out into the commercial world and into consumers' hands and really all this has been laid bare to the public in recent history, in the media and whatnot |
| And the reality is that there has been a disconnect in value over the last few years relative to what we've been able to accomplish |
| I think it's going to accelerate here as balance sheets start to get tighter and tighter and tighter and the fundraising environment gets tougher, tougher and tougher |
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