Tesla is reportedly testing lidar sensors, which Elon Musk dismissed as 'expensive' and 'unnecessary'

• Tesla bought lidar sensors from Luminar for testing, Bloomberg reported Monday.
• Elon Musk has called lidar technology "expensive," "unnecessary," and a "fool's errand."
• Musk says he'll develop self-driving tech that relies mainly on cameras instead.

Tesla CEO Elon Musk has repeatedly derided the use of lidar sensors for autonomous vehicles. Now his carmaker is reportedly testing out the technology.

Tesla has inked a contract with Luminar Technologies, a leading lidar startup, for testing and development, Bloomberg News reported on Monday, citing unnamed sources familiar with the deal.

Shares of Luminar were up roughly 4% as of Monday afternoon. Tesla did not immediately return Insider's request for comment. A Luminar spokesperson declined to comment on the report.

Luminar sold Tesla sensors that it mounted to the roof of a Model Y crossover, sources told Bloomberg. Photos of the lidar-equipped Model Y circulated on social media, and Bloomberg was able to confirm with the California DMV that the vehicle belongs to Tesla.

-Grayson Brulte (@gbrulte) May 20, 2021

Sources told Bloomberg it's not known what Tesla's plans are for its newly-acquired sensors. The automaker could be evaluating the technology to potentially use it down the line, or it could simply be assessing how lidar performs in comparison to its existing camera-based system.

Read more: The world's youngest self-made billionaire is proving Elon Musk wrong by bringing lidar - and self-driving savvy - to the mass car market

Lidar sensors emit pulses of light to generate a three-dimensional image of a vehicle's surroundings, and the technology has become critical in the race to build self-driving cars. Waymo, a leader in autonomous-driving tech, produces lidar sensors in-house and uses them in concert with radar and cameras.

But Musk has long insisted that he can deliver a self-driving car using cameras alone. At Tesla's Autonomy Day event in 2019, he called the technology a "fool's errand" and said "anyone relying on lidar is doomed." He also slammed lidar as "expensive sensors that are unnecessary."

Recently, he has indicated that Tesla will stop using radar sensors for its Full Self-Driving driver-assistance feature.

But Tesla's advanced driver-assistance system, even in its most advanced form, has major issues. For instance, the camera-based system has had trouble distinguishing actual stop signs from fake ones printed on roadside billboards. And user-generated videos of Tesla's Full Self-Driving beta software show that it's sometimes blind to oncoming traffic, curbs, and safety bollards.