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[Started Abruptly] …Finance and Investor Relations. With me today are Austin Russell, Founder and Chief Executive Officer; and Tom Fennimore, Chief Financial Officer. As a quick reminder, this call is being recorded and you can find the earnings release and slides that accompany this call at investors.luminartech.com. In a moment, you will hear brief remarks followed by Q&A, but ahead of that we are going to take a little over five minutes so that you can watch our latest and final installment of our Path to Series Production video series. The URL for that video www.luminartech.com/path is on the screen right now. So please take a moment and we will rejoin the call a little after five minutes. [Video Presentation] For anybody who may have joined a little bit late, welcome to the call. We are taking five minutes to give you a chance to watch our new Path to Series Production video installment. The URL is at luminartech.com/path. It’s on the screen. Please take a look at the video and then we will be back in a few minutes. [Video Presentation] Well, I hope everybody enjoyed the video. Similar to last quarter, in the spirit of continuously improving our shareholder outreach, we will be addressing some of the top questions submitted online on the Say platform at the end of our prepared remarks today followed by analyst questions. But before we begin the prepared remarks and Q&A, let me remind everyone that during the call, we may refer to GAAP and non-GAAP measures. Today’s discussion also contains forward-looking statements based on the environment as we currently see it, and as such, does include risks and uncertainties. Please refer to the press release and business update presentation for more information on the specific risk factors that could cause actual results to differ materially. With that, I’d like to introduce Luminar Founder and CEO, Austin Russell.

All right. Hey, everyone. You guys hear me okay?

We can hear you, Austin.

All right. Thumbs up. Thanks. Cool. All right. We are live from our -- from the Gores office, which is a great partner of ours and Board member with Alec, and with that, we can just get rolling. So thanks everyone for checking out the video. And again, thank you, Trey, and welcome everyone to our quarterly business update. So this is certainly a monumental quarter for Luminar with a bunch of different things converging at the same time. And to name really the five things that are happening here is, number one, achieving start of production with Iris, a huge convergence over the past 10 years leading up to that. But at the same time, number two, the debut of SAIC’s RISING AUTO R7 in China, which is really the first vehicle of its kind from the large automaker in China. Number three, Volvo’s vision for standard safety with Luminar is materializing with the unveiling of EX90, now one week from today on November 9th. Number four, Polestar next generation vehicle, the Polestar 3 was introduced a couple of weeks ago and is successfully launching with Luminar available to order on vehicles beginning in Q2 next year. And number five, we remain on track to meet or beat each of our four key company level 2022 milestones following our guidance raised last quarter, and of course, that includes our financials. So despite a strong backdrop of broader industry skepticism and macroeconomic headwinds among other things, we are delivering. We are breaking out of the pack of moonshot R&D efforts and into the first autonomous company that’s delivering this capability into production consumer vehicles. And our success to date can be attributed really to three simple things at the end of the day; one is our winning, rock solid strategy; two is that breakthrough technology that we developed from the chip level up; and three, of course, is relentless execution. And from the start, Luminar strategy has always been focused on partnering with the automotive industry to be able to deliver the foundation for next generation safety and autonomy. And as many of you know, it takes year’s worth of work in advance with automakers prior to production to make it possible and we are now at that inflection point with our first SOP. We are going to jump in a little bit more detail on that for the first instance. We also have a slide deck available with a few different graphics that we can share and is available as well for you guys online on our IR website. You can see that, okay. So SAIC, as you heard in the video, SAIC is the number one Chinese automaker in the world’s largest auto market and is now launching with Luminar in the series production vehicles in China starting with the R7. And the R7 is the first flagship vehicle from SAIC’s new smart electric brand, RISING AUTO. So our tech helps power what they call the RISING PILOT Intelligent Driving Program to enable advanced safety features and automated driving capabilities. This follows RISING AUTO’s high speed testing across China encompassing more than 400,000 kilometers to start out. So Tom will be going off into four different key company level 2022 milestones and we get it all. But the first of four was being ready for series production by year end. And here we are at the beginning of November and we are now both in series production and launching with our first major automaker. So we have successfully proven that we can achieve all these major commercial wins more than the rest of the landscape altogether, but now critically, we are proving that we can deliver. And with that, I want to take the opportunity to thank the entire Luminar team and our production partners at this very special moment in time, it’s a decade of innovating, prototyping, developing, and industrializing efforts. I mentioned this in the video that it’s tough to describe in words just how much has gone into making this possible and it couldn’t be more true. We are just getting started. But now, it’s all about being able to successfully scale to higher volumes with our automaker partners and we are well on our way. So, with that, next up is Volvo and we will talk about Polestar. So, and what you guys had seen and what you see here too by the way is the final production integration up on there with the Volvo for life, which is kind of a cool little additive there. But that said, as we successfully continue to prove ourselves to the major automakers, they are becoming more and more convinced that the path to autonomy and next-generation safety will be paved by Luminar. And Volvo was, of course, the first or among the first to reach this conclusion. And as you saw in the video, Volvo views Luminar to really be the symbol for the automotive safety in the 20 [ph]. This will be key to enabling their journey towards zero collisions and the introduction of unsupervised autonomous driving. That’s why they are going all in to standardize Luminar on the new EX90 and you get a sneak peek in today’s video to see the final production of Luminar integration as you can see on the screen here and they will be fully unveiling the EX90 on November 9th. So, next up, Polestar. So for those that don’t know, Polestar has effectively become the largest new EV company in the western world and is also backed by Volvo. So just a few weeks ago, Polestar introduced the Polestar 3, calling Luminar the cherry on top and spotlighting the critical role we play in helping enable advanced safety and autonomy. Polestar announced the customers can pre-order the Polestar 3 with Luminar starting in Q2 of the subsequent year here. So, in conclusion, our vision of saving lives and power in autonomy is coming to fruition. What seemed like big audition that’s just a few years ago around building auto grade product for consumer vehicles, safety and highway autonomy versus urban autonomous robotaxis is now happening and becoming a reality. So in a world of over promising and under delivering for autonomous vehicles, we aim to be the standout that under promises, over delivers and will help make this industry happen and into the hands of consumers. I think today is evidence of exactly that. So, with -- on our four key milestones and Q3 financials.

All right. Thank you, Austin. Let’s start by reviewing our progress towards the four key 2022 milestones we laid out at the beginning of the year. Our first milestone was to achieve series production readiness by year end. I am proud to say the team achieved this milestone by reaching SOP or start of production when we recently launched with SAIC. Our advanced manufacturing team and production partners are now focused on the next phase of industrialization as we prepare for scale and additional upcoming launches. This includes the construction of our new, highly automated manufacturing line and larger higher volume facility in Mexico for launch in the second half of next year. Our second milestone is to achieve the beta milestone for our software suite by year end. Our team continues to develop and deliver software leveraging our Iris LiDAR as the foundation while at the same time making great strides developing and refining full-stack software capabilities including proactive safety and other ADAS and autonomous features. We will publicly demonstrate the beta version of our Sentinel software functionalities at CES in January. Our third milestone is to grow our major commercial win total by 60% year-over-year, up from 40% at the beginning of the year or five new wins this year. During the quarter, we signed a major commercial agreement with a new non-OEM customer. We will talk more about this new win in the financial benefit at our upcoming Luminar Day. At our year end update call, we will tally up announced and any unannounced wins and we remain on track to meet this milestone for the year. And finally, we remain on track to achieve 60% year-on-year growth in our forward looking order book based on the commercial momentum we are experiencing with both new and existing customers. Let’s review our financial highlights for Q3. Revenue for the quarter was $12.8 million, up 60% year-over-year and coming in ahead of expectations due to accelerated timing of new customer contracts. We achieved sequential organic growth in both of our segments during the quarter. For Q3, we reported a gross loss of $10.1 million and COGS of $22.9 million on a non-GAAP basis. The majority of our COGS expense was from R&D expenses associated with program development revenue, inventory reserves and fixed overhead. As stated previously, these factors inflate our reported COGS and gross loss at this stage and are non-indicative of volume production unit economics. Our Q3 cash spend was $52.5 million. Cash spend was down slightly sequentially from Q2 and in line with our expectations. We ended the quarter with $553 million in cash and marketable securities. As I mentioned in the last quarter, this liquidity position leaves Luminar with sufficient capital plus a healthy cushion to reach positive cash flow and profitability. We will update investors at our upcoming Luminar Day on our path and timeline to profitability. We are affirming our previously raised full year revenue guidance range of $40 million to $45 million. Our Q3 revenue outperformance was largely due to accelerating timing of new customer contracts executed in Q3 instead of the expected Q4. As a result, we expect Q4 revenue to be in the range of $11 million to $13 million. We maintain our full year guidance at net cash spend will be moderately higher than last year’s total of $155 million, as well as our year end share count guidance to be in the mid-$360 million range. Consistent with our comments from last quarter, we expect our non-GAAP EPS loss to increase sequentially next quarter and be in the low $0.20 range for Q4, as we continue to invest in our business in a disciplined manner to prepare for series production. One final note, as I mentioned earlier, we are planning to host a Luminar Day in Orlando covering our technology, roadmap and long-term financials in February. Stay tuned for the exact date. To conclude, I would like to thank the broader Luminar team for another great quarter and the incredible effort in achieving SOP. With that, I will hand it over to Trey for Q&A.

Thanks, Tom. We are going to start the Q&A with a few of the questions that we received on the Say platform and then we will move to analyst questions. So, Austin, Tom, the first question is when will Luminar turn profitable?

Yeah. And Trey, as I mentioned, we are going to cover that in more detail at our Luminar Day in February and going through the credible path and timeline we have to achieve it. The good news is that we have the business in hand, as well as the cash on hand plus a healthy cushion to get there, so we are going to talk more about that in February on Luminar day.

Thanks, Tom. The second question was really about scalable production in our factory and would that be possible by 20 -- the end of 2022? The question said Rochester, but I think they really meant Monterrey.

Yeah.

I know. Kind of walk through maybe the industrialization path and kind of how that’s working through the end of 2022 through 2023?

Well, I think, maybe -- yeah. Maybe as a quick context, I think, we -- as far as I understand, the Say portal was closed yesterday before everything that we just announced today as well. So I messaged…

That’s true.

Yes. So this is probably answered with flying colors. But, yeah, we are already in series production in leveraging our partners and everything from our subsidiaries like from the chip level up all the way through our partners in Thailand and Monterrey, Mexico where the final assembly is done. So that’s already happening as it stands today and if there’s other audio here in the room, we can mute it.

Yeah. And then we talked about, and both Austin and Tom have talked about the second half of 2023 moving to the more automated kind of dedicated facility.

Yeah.

Right?

Yes. And just for a point of clarity, because I know that Rochester was in the question that came up on the Say platform. There is a firm up in upstate New York hence the Rochester, that is actually building most of our automation equipment for series production.

Right.

We actually just went through the initial validation of that equipment. That equipment will then be shipped down to this new dedicated facility that we are building out in Monterrey, Mexico. The plan is for that equipment and that facility to be up and running in the second half of this year. In the meantime, our contract manufacturing partner, Celestica, has their own existing facility right down the street from that new facility in Monterrey, Mexico, where they are currently building our Iris units that are going to SAIC and our other customers. So I just want to kind of clear up. I know sometimes you get a little confusion, but everything that is currently going on and expect it to go on in why the Rochester location came up in the question.

And then that highly automated line that we are building that can do the 250,000 units per year is going into this new dedicated facility that we are constructing that for very high volume that’s also downloaded in Monterrey, Mexico. So that’s how it’s all coming together and how we can ramp up successfully, not just with SAIC, but also with Volvo and Polestar and other vehicles.

Great. Thanks for clarifying that guys. The third question from, say, and then we will go to the analyst questions. So what is the future outlook for LiDAR technology in the automotive sector? So Elon Musk comments that their vehicles will eventually rely on camera technology most recently, have talked about disabling ultrasonic sensors in their vehicles?

Right. Yeah. So, I think, obviously, more and more so as we see continued adoption throughout the rest of the industry of LiDAR for pretty much everyone. That just proves the things in more and more so, and obviously, we have gone out and I have been a little bit more outspoken with the state of affairs, which is not by the way, like just the Tesla problem, it is an emerging problem in terms of safe deal. Uber cars are today and where they need to be able to get to be able to ultimately save lives that we need to. But I think the whole notion still stands that solving, trying to solve some fully autonomous problem, even with LiDAR that makes it orders of magnitude easier, like, 100 or 1000x [ph] easier is already almost impossible in the immediate term, much less trying to make it that much harder on yourself. And yes, there is some theoretical world where it could be done. But the reality is, is that no software or hardware exists when it comes remotely close to meeting anywhere near human standards. And then, of course, the question is, is that why wouldn’t you want if it’s, even if you couldn’t meet the human centered or even you could do something, why wouldn’t you want it to be, 10x or 100x safer beyond that. So that’s, of course the whole question, where LiDAR has come into play and why we see this rapid adoption and why automakers are so heavily doubling down on this technology for by all means. So when it comes down to it, cameras are going to continue to have their place. We are partnered with companies like Mobileye, for example, Nvidia. Mobileye’s business is based around the camera system in that side of it. If there any company who would be incentivized to Ole camera for everything, it would be that much, by the way congratulations to them on their IPO as well just earlier here last week. So, yeah, it’s been good, and I think, we are obviously like don’t take it from us, take it from all the other major automakers and all the experts in the field, let’s say the same thing, obviously our proving exactly that.

Thanks, Austin and thanks to everyone who submitted Say questions. We are going to continue use this as a platform to increase shareholder engagement with us. With that, let’s get to the analyst questions that are online. And so, the first one is going to be from Emmanuel Rosner at Deutsche Bank. So go ahead Emmanuel with your question.

Thank you so much. So congrats, I guess, starting production of the LiDAR for the SAIC. Now that we are -- now that you are in production, can you share maybe a little bit more color around expected timing to ramp up? What can these volumes eventually look like and I guess by when? And then, maybe confidence level into how this could translate into either additional models or just additional brands within the portfolio?

Yeah. So, Emmanuel, for this year, because we are entering SOP towards the end of the year, I wouldn’t expect a significant increase in revenue. When you look at when it’s really going to scale up and you are really going to start to see real significant increases in revenue and volume, it’s going to be when that new dedicated facility comes online in the second half of the year. We are initially launching on an R7. This is a new vehicle platform for SAIC. This is, I were to call it, a premium EV that they are introducing to the market particularly to compete against the Tesla Model Y and the Model 3. They have a similar price point. It was important to them. And part of this strategy in terms of how to compete was to put cutting-edge technology on that, hence the reason why they selected us. We are initially going on as an option. We will see how those take rates turn out relative to our forecast. But the initial signs so far have been positive and when it comes to exactly what that’s going to translate into revenue next year, not only for this launch but the others that we are planning, we are going to discuss that in more detail during our year end call, as well as at Luminar Day.

But can you maybe just talk about the scope of the agreement that you expect in the multiple model or is there...

We are -- right now, we are specked into the R7. We are expecting there is an option and that gives us growth opportunities with that customer not only in terms of increasing the take rate and hopefully eventually moving to standardizations, but also potential new vehicle programs. Nothing to discuss now, but needless to say, we don’t consider mission accomplished with all the business we can go out there and win at SAIC.

Okay. And Tom...

I would say, by the way, just as important as new companies there, too, a lot like. There so much business growth that we have like say, within OEMs that given that we have already won a huge chunk of the overall landscape here too is that even just riding the current growth of where we are able to do that. So that’s where we see such a huge growth. A lot of the order book growth, for example, the forward looking order book even comes from even independent of what we are also winning on top of it.

Okay. And then, Tom, as you were very careful to say, look, the losses or the cost of goods sold doesn’t represent sort of the run rate sort of back to unit economics, I guess, when would we see sort of more like the run rate unit economics? Is it when you launch sort of like the next facility, then it sort of makes more sense or do you need to reach a specific level of volume to sort of start approaching this?

Yeah. And I think Emmanuel, it’s really getting that new facility, that new dedicated facility coming online in the second half of the year up and running. I think it needs to be up and running for a few quarters to kind of really get everything running smoothly, get the scale, get hitting our bottom targets. While we hit SOP, there’s still work to do in terms of improving yields, improving efficiencies, right? Step one is to kind of make these things, and then, step two is to make these things and scale and so, I think, we got to get those things up and running. I think we got a little bit of scale before you start seeing what this business is going to look like on a unit economics basis.

Yeah. At the end of the day, it’s -- there is the equation. There is a certain amount of fixed overhead that you have, right? So then there is an intersection point from a volume standpoint as you scale up there, too. I think that point is really exactly when that --yeah, when the new facility comes online when you can achieve those volumes there, too. But I think starting off at Luminar Day there, too, we are going to get and when the facility comes online, we will probably get into a little bit more detail or at least I am talking with the finance team, how do we get more detailed metrics around the specific unit economics and other kinds of things in terms of the things that we can do.

Thanks, Emmanuel. Appreciate it.

Thank you.

The next question comes from Mark Delaney at Goldman Sachs.

Yeah. Good afternoon and thank you very much for taking the questions and congratulations on getting into the startup series production. My first question was on the expansion potential within customers and I think it’s one of the big opportunities you guys have highlighted in some of the past calls and discussing again today. Maybe you could elaborate a bit more on that and talk about what do you think some of these OEMs would want to see before deciding to put your products on more of their vehicles, right? I mean you are on a model with SAIC and Volvo. I mean, do you think they want to see vehicles on road and kind of see how that goes for some period of time, or perhaps, could they come and place orders to put your products on more vehicles more quickly than that?

Yeah. So I think, Mark, it varies by customer. Getting your foot in the door with these -- with the initial win with each of the customers tends to be the most difficult task. As we talked about in the past and you, like, if look at Volvo, we started off as an option on their most premium vehicle, the EX90, then you kind of move to standardization, then you kind of move on to the other vehicle platforms. So, step one, you got to get in the door. Step two, you got to execute, right? You got to do what you promise and deliver to the customer what you promised. And once you start building up that credibility with that customer, building up the confidence, they have the faith to give you more business and then it needs to align with their specific platform development schedule. When you introduce this new technology, you either do it at the start of a new platform or at a mid-cycle refresh. So you have to align the timing of all that. But those are the three things that usually need to go in there to win new vehicle programs at these customers. It’s something we are really gaining a lot of momentum on where we showed some early signs of success and I think you are going to see more signs of that at some point in the future here from Luminar.

That’s helpful. Thanks. And the second question is just how to think qualitatively about the direction of cash spend. I understand the…

Yeah.

… guidance for this year. I mean, as you think about next year, right, you have got the dedicated facility, you are starting to support higher volume ramps and margins for any company and the early parts of a ramp are going to be pretty low, so should investors be anticipating some more material step function increase in cash expenses in…

Yeah.

… 2023 or maybe there some other offsets to that? Thanks.

I don’t think you are going to see a step function increase. I think Q4 this year is going to look a lot like Q2 and Q3. Some of this development -- program development revenue, the cash payments associated with those tend to happen at the end of the year, whether that’s December or January is going to determine -- it’s probably going to be the biggest contributor on what Q4 is going to look like, but I think ultimately, it’s going to look like Q2 and Q3. And then, ultimately, once we get to that ramp up in scale in the second half of the year when the new facility comes online, I think, that that’s when you are going to start to see some real improvements as opposed to step function increases and what our current cash spend rate. I mean, look, what we ....

Okay.

Yeah. Go ahead.

Yeah. Thanks, Mark. Appreciate it. Next question is going to come from Samik Chatterjee at JPMorgan.

Hey. Thanks. Thanks for taking my questions guys and congrats on the series production start here. I guess I want to start off with software and you are reiterating the target to get to a beta version by the end of this year. But maybe help me think through or sort of the roadmap from thereon, like, what are the key metrics you are trying to improve to drive higher confidence to get that software from where you are maybe showing us the improvements at CES to automakers signing off and saying, okay, highway autonomy is good to go on the road, like, what are those key sort of portions of the software stack you are really trying to improve in terms of metrics and any insights there would be helpful to get us more confident about that eventually getting a larger sort of relevance with the automaker customers as well. And I have a follow-up later. Thank you.

So, I’d say, the most important part with all of that, too, is you start off with the LiDAR, right? That’s the foundation of it, we saw unique advantage, has a most fundamental question, like, why are you doing software because you have that advantage. It developed in closely with the sensor and it can enable automakers that don’t have that. So our objective is to make them as successful as possible. And what we found is that, automakers can be good at developing certain parts of the software stack, automakers are not great developing many parts of the software stack and that’s where they have to rely on partners like us or other players like Nvidia, Mobileye and other parts of this world to be able to help support. So when it comes down to it, I think, the -- this is the stuff that we are showing at CES is going to be the next version iteration for even better performance from what we have seen last year with the alpha version going into the beta version. But also continuing to develop different vectors of the product, as well as we continue to expand that and we will be going into more detail on at CES where we will showing off there. So some exciting stuff up ahead. But that said, more generally, we are already working with automakers on parts of the software stack today that’s supporting the ability to actually deliver at the end of the day and make it useful. But on top of that, I think, the focus has really been on automakers that have some central software or already have software partners or something to that effect today. The reality is that most automakers at the end of the day don’t have a clear software strategy or plan or ability to develop it. And that’s why we are also making the bet of not just doing some of the foundational software, but even some of the full stack software as well to enable proactive safety and highway autonomy capabilities as part of an all inclusive package and that’s where you really start to see that take off in the second half of this decade. So if you kind of think about different layers of content that scale up to make it successful from both the LiDAR standpoint, because effectively without software, the LiDAR is just a box, right? So there’s no way that you could even deliver a LiDAR system to the majority of the major automakers at the end of the day if you didn’t have software as well. So that’s where how we think about it all tied in together

Okay. And for the second one if I can just sort of ask you about the competitive landscape here. We have seen, I think, just you highlighted your cash position, but we have also seen certain LiDAR companies sort of go bankrupt in the -- from what we can see from press reports. Are you starting to see some narrowing of the field already in terms of sort of considerations from automakers, some automakers starting to sort of change track in terms of which companies they are evaluating, any sort of changes that you are seeing yet or sort of more of that to come and thanks for taking the questions.

Yeah. So, Samik, I think, we are in the early stages of rationalization, not only of the LiDAR industry, but I think the broader autonomy landscape. I think as you mentioned, there has been some bankruptcies and restructuring of some LiDAR companies recently. We are -- there’s also been some kind of bailout financings. And look, we also monitor the cash levels and the kind of the cash burn rates and we know that our OEM customers are doing that as well, because it takes anywhere between two years or three years between when you win a piece of business and the development work you need to do just to get to series production. And when you win that piece of business and you need to do the investments in engineering, in the manufacturing and buying all the equipment. But we know it firsthand, we are doing it in multiple ways now, it’s expensive and that cash burn rate tends to go up. And these OEMs want to make sure that if they are making a long-term commitment that that company is going to be around to deliver on that. Luckily for Luminar and the strength of that balance sheet, we easily address those questions. And then in the broader autonomous landscape, I think, you see it -- there’s been a lot of public announcements recently of some of these larger autonomous software companies having struggles from either the parents not willing to fund them anymore to even getting caught up in some of the geopolitical tensions out there. And so we are in a -- it’s a tough environment out there and Luminar is getting caught up in a lot of this macro storm that we are withstanding. But on a relative basis, we have a pretty strong storm shelter and we are going to survive -- we are in a very good shape to survive this relative to the other players in the industry.

Yeah. And I think the most important thing, though, too, is just at the fundamental level, people can mix up terms of, like, when it comes to, like, these autonomous vehicle companies out there that when people associate autonomy and they are like, oh, it’s not happening, nothing is here, all this stuff and all this skepticism, it’s really around the robotaxi like Waymo, Cruise, Argo, Aurora,

Okay. Yeah. Thank you. Thanks for taking…

Thanks, Samik. Next question comes from Josh Buchalter at Cowen.

Hey, Josh. You are on mute.

Let’s start. There we go. Thanks, guys, for taking my question and congrats on your new series production. I am sure it’s going to be very rewarding for you guys. I wanted to follow up on…

Thank you.

… Samik’s question on software, I think, we have seen some of the auto OEMs struggle with their internal software development and then some on the other side, some compute players investing more and more heavily in autonomous software. And so what I am trying to better understand is where does your Sentinel fit into a broader stack? And then, what’s the economic go-to-market strategy as it matures fully cognizant and that it’s early? Thank you.

Yeah. So I would say this is that, I think, yeah, as we are seeing more and more evidence of people have had their own software divisions, people have had their own -- they are shutting down, they are not what they think that they were and that’s largely just -- it’s as much -- it’s not even just capability problem, like, there’s the traditional notion of, okay, like, automakers will have a hard time like hiring the best engineers, and then, like, you need the best engineers to be able to develop that, which there is truth to this, right? Like, obviously, like, a leading technology company for this industry and growth technology company, we are able to attract some of the best talent as we have seen by some of the announcements or things that we had of the kind of people joining us, which is fantastic. But it’s not even just that. It’s also a strategy question as well where most of the divisions of the software divisions have just fundamentally taken a wrong term strategy in the broader industry there, too, and that’s why you see like dramatic blow-ups and shutdowns, because it’s not like you can just like pivot the code to like go towards consumer cars in a completely different application. And that’s really where we have obviously been focusing the software in. I think as you see more and more of these different types of companies shutdown, they are literally going to pair it exactly what we say our strategy is on the software side. So it ends up aligning very well with the overall approach that we have taken and have that ability. It takes time, obviously, to develop the full stack part of it and we have continued to work our way up through different parts of that stack and expand out. But at the same time, I think, this is -- does two things. One is it increases the value in the ASPs when it comes to like a fundamental LiDAR standpoint in terms of what you can do and what you can enable and that’s why, I think, it’s probably -- I think it’s kind of a surprise to many in terms of like the kinds of ASPs that we get already for products as it stands now and the relative share of value that we have from an OEM standpoint going into market. But then, two, is additional value adds on top of that, like, option upgrade features, other kinds of things that can help enable additional revenue streams associated with the product and with the capabilities, in addition to, of course, the broader notion of supporting standardization of the product and capabilities for multiple automakers. So, yeah, I mean, just increasing content value. I mean, I think, ultimately, the expectation is, is that can help multiply content value and profits over the course of this decade. That’s not a next year thing, but like when you look on, it’s ultimately my responsibility to make bets. We have our next year bets, our three-year bets, our five-year bets. This is kind of spans on the spectrum. It’s more of the middle of the decade side of when we see that inflection take off, probably a few years to offset from the LiDAR. So that’s kind of where, when you start seeing the additional revenue streams and other stuff really scaling up beyond what’s additive already to supporting much higher than what you would expect to ASPs.

Thanks. I appreciate all that color. It’s very helpful. As my follow-up, the RISING AUTO and Polestar offering the LiDAR as an optional upgrade, I imagine given cycle times and we are getting pretty close to that launch, there’s got to be some capacity planning on your part. I guess, can you walk through what initial feedback are they getting on adoption of the LiDAR upgrade? And in particular, how are they marketing it to their customers, how are they positioning it for a longer term, because I am sure they are incentivized just like you are to have more LiDAR on more vehicles? Thanks, guys.

Yeah. I would encourage you, Josh, as well as others on the call go to the Polestar event in early October, go to what the Volvo’s CEO unveiled at the end of September and listen to what they are going to unveil in more detail next week.

And actually, if you go right after this, go to the…

Yeah.

Go to the Luminar website or Luminar YouTube channel there, too, and there’s actually literally like SAIC is putting out video ads like basically like commercial TV-style like professionally-produced ads that are basically for us. There’s, like, it’s kind of like shocking like how much people -- how people excited about, how much people are excited about this, how much they are leaning into it. So it’s -- so you can actually see -- you can see some of that stuff.

Yeah. Our LiDAR is very prominent in our marketing campaigns for these new vehicles. Look on the take rates, it’s too early to tell, what we have kind of embedded in our forecast and our order back are very conservative assumptions. The initial data we have seen so far, and let’s say, it’s very initial, not drawing any conclusion from it suggested maybe too conservative. But we will continue to monitor that and share with you guys once we have enough data and are able to draw some conclusions on it.

Thanks, Josh.

Thanks, Tom.

All right. Hey, for the remaining analysts, we are going to try to get as many as we can on the call. I think we got about 15 minutes, so I am going to ask everybody just to do one question and then we will try to kind of cycle through a few folks. So the next analyst is going to be Jared Maymon from Berenberg.

Yeah. Thanks for taking the question, guys, and obviously, congrats on getting the production milestone. Austin, one question, but kind of two parts. So, first of all, can you -- I know right, but first of all, can you help us better understand how your forward-facing order book is calculated alongside the customer? And then do you see any risk from take rates from macro factors that could impact light vehicle production or consumer demand trends like rising financing rates?

Sure. So let me try to address your two-part question there Jared with one answer. I will give you a refresher in terms of how we calculate our forward-looking order book and we tried to be conservative in terms of how we calculate it. So for example, for Volvo, we only have the EX90 in it. Volvo has said publicly their plan is to eventually put our LiDAR on every vehicle that they produce. We don’t have all the vehicles of Volvo in our order book. We don’t assume some probability in our order book that we are going to get the non-EX90 business. We only have the EX90 in there. Same thing with SAIC, right? They are -- the only thing that’s in there is a very conservative take rate assumption for the R7. We are not assuming standardization of the R7, we are assuming zero of any other business at SAIC. Nissan has said publicly that this system that we are jointly developing with them is something they are going to deploy on virtually every vehicle that they make at the end of this decade. Nissan makes 4 million vehicles. At the end of last year, we had zero in there for Nissan. So we take a very conservative approach in what we put in there. Any delays in platforms, because of the current challenging environment, that won’t have a material impact on the order book, because we typically do it over the life of the platform. So if somebody is three months to six months late in launching a platform, they are still going to keep it running for five years, seven years, however, long it’s going to be the make. The take rate, once again, we are very conservative on the take rates that we assume. Therefore, it’s an option. We typically take a haircut to what our customers indicate to us, to even what IHS is indicating to us. I know others in the industry have their own methodology for calculating order books which are different than ours. We kind of did hit back envelope calculation of what our order book would be if we kind of used others in the industries definitions. We were getting the numbers in the $15 billion to $20 billion dollar range. Now look, that’s not our official order book, we are going to update it what it is at the end of the year. We calculate it once a year. But it’s very conservative, much more conservative than what’s up you know what others in the industry is.

Got it. Thanks, Tom. And I appreciate you taking the question. Looking forward to seeing you guys at CES 2023.

Thanks, Jared.

Thanks, Jared.

And the next question is going to be from Itay Michaeli of Citi.

Great. Thanks. Hi, everybody. I will stick to one question. Just hoping we could talk about the business funnel. I know you did the formal update at the end of the year, but maybe give us a bit of a flavor on what you are seeing on the RFQ-RFI environment. Anything changing with the macro or some of the wins you have had, is that creating more of a domino effect we were seeing at the increased activity, maybe just a little bit of a preview there at a high level?

Yeah. Look, Itay, what I would say is, we are still on track to reach our goals that we set out at the beginning of the year and then increased during the last quarter. So I think, in general, things are according -- going according to our expectations. I would say there have been some OEMs who said, hey, look, we are going to send out this, there are through the end of this year, some of that starting until like early next year, just given everything going on in the world. Having said all that, there are other situations where we actually see an acceleration, whether that’s a new customer, existing customer, an acceleration trying to get our technology on our vehicles sooner or maybe even taking customer where you have business and maybe deploying that a little faster than expected. I would say, people have also been talking about software. But I would say, there’s also other avenues we have to kind of monetize the ecosystem that are LiDAR can create and we will be talking more about those at Luminar Day and we are seeing some traction there as well. So I think, overall, on average everything is going according to plan, but I would say certain customers are pushing back a little, other customers are kind of accelerating.

Well, I think, it’s fair to say, like, for anyone that is on sort of what we call, like, fishing expeditions of things like they are not really serious about doing something, then you are probably going to think twice around investing billions of dollars more immediately. Anyone who is serious about this is doubling down accelerating other stuff or doing things earlier than what we said we are going to do. We are signing, I mean, even the contracts for what we have for this quarter and for everything that’s accelerated and lead to some of the results. And all these other fronts that are moving full speed ahead, people are doubling down, people are expanding the opportunities there with the OEMs in terms of what we have for the existing ones and then some. I think it’s more of -- there’s already a lot of players there too at the table and that’s why I think what you are going to see is more of the consolidation. But not with like automakers selling, like, selling cars with these features and wanting to equip their cars with this kind of next-generation technology. More of the like macroeconomic -- like what the macroeconomic headwinds are forcing, like, isn’t really for our customer base, it’s more of like the moonshot R&D projects of, hey, does it really make sense for us to keep investing a $1 billion-plus per year into something that may or may not actually come to fruition? So I think that’s where we are going to see the bulk of it there, too, and that’s again not to be confused with the kind of product commercial deals, landscape autonomy, that kind of stuff, like, safety that we are doing

Perfect. That’s all very helpful. Thank you.

Thanks, Itay. Next question is going to be from David Kelley at Jefferies.

Hey. Good afternoon, guys. Just a quick one for me and a follow-up the -- on the RISING AUTO R7s specifically, any color you can give us on how the Luminar LiDAR option is going to be priced in to that vehicle?

You can go to their website now and take a look.

It’s an option, David. It’s the U.S. dollar equivalent from memory is somewhere in the mid-to-high $2,000 range. You can actually go -- if you are Chinese proficient, actually go to the website.

Yeah. It’s in Chinese. Our failure just as like in Chinese.

Yeah.

It’s -- but, yeah. Yeah. No. Exactly. So, basically they are priced at. I mean, the point is that, there’s pretty significant value that’s attributable, obviously, to this and I think that kind of -- there’s, obviously, different calculations of what we can do to the price relative to take rate and/or some curve associated with that. But I think there is a sweet spot where you can get huge adoption and still have huge value. And we have to remember, this is even on -- this isn’t like some like crazy super high end vehicle, too. This is like a…

It’s a Tesla Model [inaudible] competitor.

…lower range. Yeah. Exactly. So, yeah, it’s cool to see you get out there already.

Okay. Perfect. That’s what I thought. Thank you.

Thanks.

Thanks, David.

Thanks, David. The next question is from Richard Shannon at Craig-Hallum.

Sorry. Forgot to get off mute there. Austin, maybe just a question on technology, your Freedom Photonics acquisition from earlier this year kind of alludes to next-generation hardware. I am wondering if you can talk about the timing and urgency of wanting to make that and to what degree does that present any risks for follow-on wins with a change in hardware? Just kind of get perspective on that as well, please. Thanks.

Yeah. So, I think, there’s different parts of each of these things in general, when we look at some of the vertical integration that we have done, whether it’s with Black Forest Engineering, OptoGration or more recently Freedom, which by the way, we will take an opportunity to talk about the bigger picture strategy with all this coming Luminar Day in the first quarter of next year. But I would say that, each of these as a key element of a few different things. One is accelerating technology development that was already on our existing roadmap in partnership with them. Two is with regards to supply chain security. And then three is with regards to defensibility and just basically having total ownership over the respective companies and continuing to build that moat all around it there, too. So I think in the case of Freedom, for example, just as we were able to get the cost of the receiver down to just like single-digit dollars between Black Forest Engineering and OptoGration everything. The laser itself was also -- there is some amazing, amazing technology and that’s Freedom has had in a specific type of laser building out. And I will get into more details on the technical aspect of all this. But this is where there’s already cost-down opportunities that can be implemented. If you take a look at kind of the five-year view, there is stuff that we are already doing today that’s getting integrated and then there is stuff that gets implemented for next generation of products and that’s where you continue to see that exponential benefit when it comes to both a not as a performance standpoint, but even in an economic standpoint, as well as we vertically integrate across the Board. And which we think is going to be fundamentally required you to produce any kind of viable products that can achieve where the ultimate place that we want to get to and the cost that we want to get to and we have shared that very long-term roadmap for extreme profitability at the end of the day.

Great. Thanks, Austin.

Thanks, Richard. The next question comes from Kevin Cassidy of Rosenblatt.

Yeah. Thanks for letting me ask question and congratulations. Now you are in series production and starting with series production. Can you talk about your cycle times and what kind of improvements do you expect you will see as you go to your new factory in second half of 2023?

Yeah.

Go ahead.

Yeah. So, Kevin, as I mentioned earlier in this call, step one is figuring out how to make these with the right technology mean right specs and the right quality where our customers focus to put them on the consumer vehicle. That’s the most difficult step. That’s something that we recently achieved with SAIC. We -- now we are focusing on improving those metrics that you talked about, the yields, the efficiencies, et cetera. I think the most important one and that we are really going to start focusing on is when that new dedicated facility is up and running in the second half of the year. So we still have some work to do there to make those improvements to the efficiencies, but the team is making great progress in terms of tackling that and getting to where we need to be.

And to answer specifically, I mean that basically ends up translating into cycle times that are measured in minutes, not like hours…

Yeah.

… or anything, right?

Okay.

So that’s where with -- obviously, there is a ramp through all the stuff and then you take it one step at a time with each of these. But we need to get to that capacity to be able to ultimately meet all of the needs for the multiple OEMs and vehicle models that we are launching. But the other part of it is it’s not just about the increased capacity, it’s also about automation. So we are constantly automating more and more. We made this early bet on having an advanced manufacturing team and capability as part of Luminar starting, what, six years ago. So since then, we have really worked on refining how you can build and assemble all these different aspects of what goes into the LiDAR and building that into automated capabilities, everything from the component level, to alignment of the system, to calibration, to all of that stuff that’s very, very tough. And like said, it’s one thing having a technology, it’s another thing proving out that it can truly meet all the performance. It’s a completely different thing actually being able to industrialize the manufacturer and that’s something that obviously is a proud moment today, but there’s a lot more left to do.

Great. Thanks. Congratulations, again.

Thanks, Kevin.

Thanks, Kevin.

We will take one final question from Kevin Garrigan at WestPark Capital or we are going to end the call. So thanks everybody for participating in the call. We look forward to talking to you on the next quarter call and also look forward to everybody joining at Luminar Day when we do that in Q1 and if you are in CES also let us know if you are going to CES. Thank you.

Yeah. We will see you guys soon. There will be awesome and I think you may be able to, whether as a Luminar or CES should be able to see the SAIC car live and in the flash as well. So that will be awesome. I look forward to seeing you guys. Thanks again for joining on and tuning in and we will see soon.

Thanks.

Thank you.