*

Global automakers working to launch safer self-driving

vehicles

*

Deal is first step toward a potential supply contract

*

Luminar's ( LAZR ) Halo is smaller, more efficient than its Iris

sensor

By Abhirup Roy

SAN FRANCISCO, April 29 (Reuters) -

Mercedes-Benz has signed a new agreement with

Luminar Technologies ( LAZR ) to develop and integrate its

latest lidar product, Luminar's ( LAZR ) CEO said, shifting from a supply

deal for its currently available sensors.

The contract with the German auto giant is the first deal

for Luminar's ( LAZR ) smaller, more efficient Halo lidar sensors, and it

comes as global automakers race to launch safer self-driving

vehicles.

"Mercedes is on board," Luminar ( LAZR ) CEO Austin Russell said in

an interview. "We're working with them at a global scale to

develop and integrate the technology in their vehicles with the

ultimate objective to be able to get this into scale

production."

The global lidar market is small but growing as automakers

expand autonomous and driver-assistance features. Lidar, which

stands for light detection and ranging, shoots light pulses that

are reflected off objects to create a three-dimensional view of

the world around a vehicle.

Mercedes said it works with several lidar partners,

including French car parts supplier Valeo.

"Mercedes-Benz is also working together with Luminar ( LAZR ) to evaluate

next generation LiDAR technology," it said in a statement to

Reuters, declining to give details. It did not comment on

Chinese lidar maker Hesai, which Reuters last month

reported had

signed a global supply deal with Mercedes

.

Mercedes had signed a supply deal for Luminar's ( LAZR ) Iris lidars

over two years ago and planned to integrate them into vehicles

mid-decade. That plan has been shelved in favor of the

development agreement for Halo, which is set to roll out in

2026, Russell said. Luminar ( LAZR ) will be working on the development

contract with Mercedes over the next couple of years, he said.

The deal, which has not previously been reported, is the

first step toward a potential supply deal but does not guarantee

one.

Some Mercedes top-line models already are equipped with Valeo

lidar and can drive without constant human oversight in limited

circumstances.

Mercedes has said it wants to introduce advanced automated

driving features in a broader range of vehicles.

PRICE OF HESAI VS LUMINAR

Unlike robotaxis, which usually use four or more bulky

lidar sensors that spin for a 360-degree view, high-end personal

vehicles typically employ one or two smaller sensors that are

mostly seen jutting out from cars.

Luminar's ( LAZR ) Halo is smaller and more efficient than its

previous generation Iris sensor and can blend into the roofline

of a car or sit behind the windshield

Mercedes-Benz has chosen Hesai, China's largest lidar maker,

for global markets, despite legal and geopolitical risks,

because of its lower costs and ability to produce at scale,

according to the Reuters report, citing a source.

Hesai's latest ATX lidars cost around $200 each. Luminar ( LAZR ) told

Reuters the target price for the Halo is $500.

It is common for automakers to work with two or more

suppliers to reduce supply risk, especially during periods of

uncertainty such as the current Sino-U.S. trade war.

Luminar ( LAZR ) has a manufacturing facility in the U.S., but makes

most of its lidars outside the country - it has plants in

Mexico, Thailand, China. The company is considering making Halo

in the U.S. if the "tariff situation isn't resolved," Russell

said.