My Bullish Thesis on Luminar
CEO (Austin Russel)
Prodigy CEO
Austin Russel is an "optics prodigy." He developed the idea for Luminar at the age of 17 when he was in high school. If you need more proof that he is a prodigy he memorized the periodic table of elements when he was 2 years old. At age 10, his parents wouldn't buy him a cell phone so he programmed his Nintendo DS to act like one.
Time Traveling Prodigy
A funny mistake in my google research shows that he dropped out of college in 2102! So apparently this guy is a time traveling prodigy.
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Youngest Self Made Billionaire
He earned this title at 23 years old after Luminar went public via a merger with a Special Purpose Acquisition Company ("SPAC").
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The Bull Thesis
What is LiDAR?
The technology is complicated to build but simple to understand. Light Detection and Ranging technology ("LiDAR") is a method for measuring distances by illuminating surrounding objects with a laser and measuring the reflection with a sensor. The differences in measurements are used to create 3D representations of the illuminated objects.
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Applications of LiDAR
LiDAR can be used in any situation where the structure and
shape of Earth's surface needs to be known, and can even
measure some gases and particles in the atmosphere.
There are hundreds if not thousands of applications for the
technology. Below is a list of a few of the more profitable
applications.
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Applications include:
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Autonomous Vehicles (Possibly) See Below.
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Land Surveying
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Power Line Inspection for Maintenance
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Forestry and Farming
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Mining
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Other Transportation
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Large and Growing Total Addressable Market ("TAM")
Today the TAM for LiDAR technology is a little less than $5B however by 2030 the TAM for LiDAR technology is expected to grow to over $150B.
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Luminar is Unique
Luminar holds 96 patents and has 77 patent applications pending.
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High Profile Partnerships
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Mercedes Benz - On October 30, 2020 Daimler took a minority shareholder position in the company.
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Toyota - In 2017, Toyota announced a research partnership with Luminar.
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The Bear Thesis
May not be Necessary in Autonomous Vehicles
Elon Musk Doesn't Like LiDAR - In autonomous vehicles (that are not Teslas), LiDAR acts as the "eye" of the car. However, Elon Musk has criticized LiDAR's inclusion in autonomous vehicles and called LiDAR (at least in autonomous vehicles) "stupid" and stated "Once you solve vision LiDAR becomes unnecessary." Elon Musk believes that EV manufacturers who are currently including LiDAR in their vehicles will "dump" the technology in the long run because the sensors are expensive, unnecessary gadgets that need to be built into the car. Because of this, Teslas opt for the use of radar, cameras, sonar, and GPS. The cameras are already necessary to read traffic signs and signals.
My Thoughts - If LiDAR technology is not necessary in autonomous vehicles then the TAM opportunity of LiDAR will be reduced and LAZR's share price will be seriously harmed. However, the technology has a broad range of applications, the company will continue to survive and innovate. Investors in Luminar should understand that they are investing in the future of LiDAR and not necessarily electronic/autonomous vehicles.
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Conclusion
Only time will tell whether LiDAR's inclusion in autonomous vehicles is necessary. Until that is determined, investing in Luminar remains fairly speculative.
