Volvo Cars is preparing to launch its first fully self-driving technology for highways using lidar and perception technology provided by Luminar, an ambitious tech startup.

Why it matters: The partnership is a major milestone for both companies.

Unlike other hands-off highway driving systems, Volvo's technology would allow drivers to truly relax — taking their eyes off the road — while the car assumes full responsibility for driving.

The deal is Luminar's first production contract and a huge vote of confidence in its lidar system, which works with radar and camera sensors to help self-driving cars understand their environment.

Details: The system will debut as an option on Volvo's next-generation vehicles, starting in 2022, likely with the XC90 crossover.

The cars will be "hardware-ready" for autonomous drive, with the Luminar lidar seamlessly integrated into the roof — a huge design leap over the spinning contraptions mounted on today's self-driving test vehicles.

Using over-the-air software updates, the optional Highway Pilot feature will be activated once it is verified to be safe for specific locations and road conditions.

This article first appeared at Axios | Navigate on May 8, 2020.