And I think that’s the most important metric. Now, when it comes down to it, the other relevant factor is you have to survive to see this through. And that’s where, because it’s like obviously if you don’t survive then there’s no market penetration on anything. But this is where I think that consolidation factor obviously serves as an advantage to us in that respect in terms of the long-term outlook for what we can do. But we’re building Luminar to last for decades. And hopefully, well over that 100-year — I mean, there’s a reason why we have a 100-year goal well over to the goal is to have it be a long-term company that outlives ultimately all of us and towards realizing that life-saving objective and being on all of these vehicles for decades or centuries to come so.
I think that’s really what we’re doing and in the immediate term, the focus is to continue to meet those respective goals, business milestones, survive it through. And that’s exactly what we’ve been set up for success and deliver on what we promised that we would do from the beginning.
Aileen Smith: Next question comes from Jaime Perez at R.F. Lafferty.
Jamie Perez: How’s everything going? I know you’ve spoken a lot about Volvo and Mercedes. How about what are the other customers Polestar? I think a couple months it was announced that the Polestar is going to be equipped with LiDAR, Luminar LiDAR. But I mean Polestar has a pretty aggressive series of models coming out from the Polestar 5 — 4, 5 and 6 coming out. So could you tell me — give a little bit of color on the relationship between you guys and Polestar and the outlook for that relationship?
Austin Russell: Yes. The Polestar is great and they’re like a fantastic company. They’ve been producing some very real product and starting to really scale that up successfully. And first with 10s of 1,000s deliveries now going into 100s of 1,000s of deliveries, very impressive as a company in terms of what they’re able to do in that quote, a more new world EV company. Obviously, there’s like the Lucid and the Rivians and everything out there. We got to sort of pick one up to be able to start out with. Again in terms of just focusing on resources, I think Polestar was the best partner to be able to do that and gives us the biggest kind of revenue and order book opportunity associated with the business and contracts there. So I think it should be public out there what we’re following the announcement that we had with the Polestar 3 and the Polestar 5 in terms of what they’re planning with us.
And again, just incredible partner, incredible team on this I would suggest and everyone here should tune in for Polestar Day as well. They actually — they have it out, what’s going on tomorrow. So it will be great.
Aileen Smith: Our next question is going to come from Mark Delaney from Goldman Sachs.
Mark Delaney: I’m hoping you can give some more color on the path to being gross margin positive next quarter. Maybe Tom, you can help us better understand how much of the COGS in 3Q were launch related costs and where those launch costs may go to in the fourth quarter? And then what the other factors are sequentially to bridge to being at positive gross margin in 4Q?
Tom Fennimore: We had about a $9 million gross loss during Q3. Of that, about $17 million was launch-related cost. That was down from about $24 million in Q2. And so the path there is to really continue to bring those launch related costs down so that we reach a gross margin positive in Q4.
Mark Delaney: My second question was just trying to better understand is any work Luminar still needs to do in order to help Volvo get ready for the launch of the EX90? Or is everything you guys need to do now ready after having successfully done the run at rate test? And then maybe just more broadly, operationally, what does Luminar need to do in order to be flexible, depending on when that vehicle may launch, just in light of some of the delays Volvo encountered on their side but hopefully will be resolved soon.
Austin Russell: Yes. So, I mean, we’re working with them, obviously, hand-in-hand to be able to ensure a successful launch. I’m not, I’m sure, probably maybe more appropriate to ask them in terms of the details there. But we’re supporting with everything that we had. We also — there’s the hardware side, that we have for the run at rate that we successfully did with them. And then there’s also the software side which I think we also said that we completed the successful integration of the software with the Zenseact system and middleware associated on the vehicle. And then on top of that, we actually now successfully implemented everything that it takes to be able to actually, when you have the sensor, then on the vehicle, on the production line, in this case, it started out in Charleston, South Carolina, the end of the full end of line calibration and all the intrinsic and extrinsic metrics and auto calibration associated with that specific factory in line that will — then scale from there on out.
So we’re in a great position to be able to support, as they successfully launched, obviously Iris as a product is independent of just Volvo alone. Like Volvo is the first kind of global large-scale launch that we have with this, that we think is that very clear inflection point. And this run-at-rate was really that fundamental milestone of what’s needed to support. So, we’re excited for this. Obviously, we’ve already — we have, dozens of customers that use Iris but this is where it starts to get into big leagues when you can have a hundred of — a hundred, thousands of Luminar-equipped cars driving around and then ultimately, scaling to millions and beyond, with Mercedes and everything they’re out.
Aileen Smith: All right. We’ll transition back to a few from our investors. The next one is, how does Luminar think about accountability in terms of recent business performance and financial losses? Are there any review processes for unsatisfactory performance?
Austin Russell: I assume these are all the say questions for the retail platform.
Aileen Smith: Yes.
Austin Russell: Great. Yes. So, I would say from an accountability standpoint, we have a high performance culture and, management within that culture. I think that’s something that, we’ve structured Luminar very much as a meritocracy on this. And I think it’s a sink or swim type of approach as people come in and certainly can attest to it in terms of what needs to be done or what you can do to be able to make that happen. But when it comes to the overall goal, like when talking about accountability and the overall goals and everything, I mean, I think we’ve — in terms of the business goals for what we set out in terms of the key corporate company level milestones that we’ve had for 2020, 2021, 2022 and 2023, I mean, we’ve effectively achieved all of those respective milestones that we’ve laid out, plus or minus.
