Innoviz Surges as Volkswagen Selects Its Self-Driving Lidar Technology

It’s a nice win for the lidar startup. Innoviz stock was surging more than 20% in premarket trading Tuesday to $4.82.

This is Innoviz’s third design win with an auto maker. It’s also the first time that the name of one of the auto makers is known. What’s more, Innoviz is a tier-one supplier to VW. That means Innoviz sells directly to the auto maker instead of sending parts to another automotive supplier.

“We are thrilled to work with Cariad team and be a supplier …. to support safe mobility for vehicles launching from the middle of the decade,” said Innoviz CEO Omer Keilaf in a company news release. “Cariad is a leading player in the transformation of the whole automotive space.”

Cariad is a software company that encompasses all of VW’s software capabilities. It serves the entire group of VW brands including Volkswagen, Audi, Porsche and others. Cariad was founded in 2000 and has about 5,000 developers, engineers and designers employed.

Lidar is essentially laser-based radar and a key enabling technology for self-driving cars. Lidar is another set of eyes for a vehicle and the technology can generally see farther down the road than traditional radar or optical cameras.

Most auto makers are adopting lidar technology as they launch higher functioning driver-assistance systems.

Self-driving car technology is exciting, but investors’ minds are elsewhere lately. Innoviz shares this year have fallen about 37%. Innoviz is a fast-growing start-up that doesn’t produce profits or cash flow yet. Investor sentiment for more speculative ideas has been hurt by higher inflation and rising interest rates.

Innoviz’s lidar peers — including Luminar Technologies (LAZR), Ouster (OUST) and others — are down about 58% this year, on average. The declines have wiped out more than $6 billion in market value tied to lidar stocks.

Write to Al Root at allen.root@dowjones.com