The Swedish carmaker has selected Luminar to equip its self-driving cars with lidar.

Some background: Lidar is the sensing tech of choice for most self-driving cars, which use it to scan the road ahead and the surrounding environment. Austin Russell, one of our 35 Innovators under 35 in 2017, founded Luminar to bring down lidar costs and assembly times so that it would get more accessible. It has managed to reduce the cost of the receiver, a crucial component of the system, from tens of thousands to just $3 and expects to be making 5,000 units per quarter by the end of 2018.

Bringing lidar to consumers: Volvo, which is also investing a “substantial” amount in Luminar, is the company’s second large automotive partner, after Toyota. But it’s the first to use Luminar’s software that automatically annotates lidar images to identify objects.

Why it matters: It could be a big boost for Luminar, which is working to compete against high-end lidar sensor stalwarts like Velodyne. Luminar’s lower prices could help bring down costs for self-driving cars to the point that they may one day make sense to sell to consumers.