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Revenue
 9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
The Company’s revenue till date has comprised of sales of lidar sensors hardware, components, and engineering services.
Disaggregation of Revenues
The Company disaggregates its revenue from contracts with customers by geographic region based on the primary locations where the customer is situated, type of good or service and timing of transfer of goods or services to customers (point-in-time or over time), as it believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Total revenue based on the disaggregation criteria described above are as follows (in thousands):
Three Months Ended September 30,
20212020
Revenue% of RevenueRevenue% of Revenue
Revenue by primary geographical market:
North America$5,713 72 %$1,473 35 %
Asia Pacific— — %507 12 %
Europe and Middle East2,265 28 %2,243 53 %
Total$7,978 100 %$4,223 100 %
Revenue by timing of recognition:
Recognized at a point in time$873 11 %$1,286 30 %
Recognized over time7,105 89 %2,937 70 %
Total$7,978 100 %$4,223 100 %
Revenue by segment:
Autonomy Solutions$7,550 95 %$3,481 82 %
Component Sales428 5 %742 18 %
Total$7,978 100 %$4,223 100 %
Nine Months Ended September 30,
20212020
Revenue% of RevenueRevenue% of Revenue
Revenue by primary geographical market:
North America$12,313 63 %$3,198 28 %
Asia Pacific475 2 %720 6 %
Europe and Middle East6,812 35 %7,601 66 %
Total$19,600 100 %$11,519 100 %
Revenue by timing of recognition:
Recognized at a point in time$4,914 25 %$2,076 18 %
Recognized over time14,686 75 %9,443 82 %
Total$19,600 100 %$11,519 100 %
Revenue by segment:
Autonomy Solutions$17,708 90 %$9,587 83 %
Component Sales1,892 10 %1,932 17 %
Total$19,600 100 %$11,519 100 %
Volvo Stock Purchase Warrant
In March 2020, the Company issued a stock purchase warrant to Volvo Car Technology Fund AB (“VCTF”) in connection with an engineering services contract. The warrants entitle VCTF to purchase from the Company up to 4,089,280 shares of Class A common stock, at a price of $3.1769 per share from the Company. The warrants vest and become exercisable in two tranches based on satisfaction of certain commercial milestones, upon reaching commercial production and delivering of production units. The grant date fair value of warrants, aggregating $2.9 million, represents consideration payable to VCTF and will be recognized as reduction in revenue consistent with the revenue recognition pattern when these warrants become probable of vesting. The Company’s management determined that the vesting of these warrants was not probable as of September 30, 2021. The following factors were considered in this determination:
•During the second quarter of 2021, the Company issued a joint press release stating that Volvo intends to include Luminar’s Iris unit, the Company’s latest generation lidar sensor which meets the size, weight, cost, power and reliability requirements of automotive qualified series production, as a standard component on one of its vehicle programs as opposed to being only an optional component. While the announcement increased the estimated targeted volume for the Company’s potential business with Volvo, the anticipated start of production and the necessary prototype testing procedures were not modified. This announcement did not impact the probability or likelihood of reaching commercial production.
•The Company is in the process of transitioning from currently producing B-sample prototype Iris units at its manufacturing operations in Orlando, Florida to producing C-sample prototype Iris units at its contract manufacturing partner. This transition is expected to occur by the end of this calendar year.
•The Company only recently completed its initial design freeze for the prototype C-sample Iris units. This design includes modifications from the Company’s B-sample Iris units as well as modifications to the production process for its contract manufacturing partner. The prototype units produced with this design and production process will need to undergo certain industry standard testing procedures. The Company anticipates reaching commercial production once it substantially completes these industry standard testing procedures, which is expected to be achieved in the fourth quarter of 2021.
Contract assets and liabilities
Contract assets primarily represent revenues recognized for performance obligations that have been satisfied but have not been billed. The Company’s contract assets as of September 30, 2021 and December 31, 2020 were $11.8 million and $0, respectively. Contract liabilities consist of deferred revenue and customer advanced payments. Deferred revenue includes billings in excess of revenue recognized related to product sales and other services revenue and is recognized as revenue when
the Company performs under the contract. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized in revenue as or when control of the performance obligation is transferred to the customer. The Company’s contract liabilities were $0.6 million and $2.3 million as of September 30, 2021 and December 31, 2020, respectively, and were included in accrued and other current liabilities in the condensed consolidated balance sheets.
The significant changes in contract liabilities balances consisted of the following (in thousands): 
 September 30, 2021December 31, 2020
Beginning balance$2,284 $225 
Revenue recognized that was included in the contract liabilities beginning balance(2,284)(225)
Net increase due to cash received and not recognized as revenue and billings in excess of revenue recognized during the period579 2,284 
Ending balance$579 $2,284