Aurora stock had a wild ride this month, and CEO Chris Urmson, who led Google’s self-driving car program in its pre-Waymo days, thinks it’s on the cusp of commercializing driverless trucks. But the payoff is years away.
from Alan OhnsmanForbes Staff
Tthe landscape of the self-driving vehicle it is littered with the corpses of those who tried and failed. Last year, General Motors pulled the plug on Cruise; Rivals Ford and Volkswagen scrapped their heavily funded Argo AI venture in 2022, and Uber axed its self-driving technology unit in 2020 after a fatal accident. Then there are the smaller companies that died before many had heard of them: TuSimple, Embark, Ike and Starsky Robotics.
Alphabet’s Waymo, the oldest and most funded self-driving firm, is the big exception here, with robot fleets in Phoenix, San Francisco and Los Angeles and plans to expand to Austin, Atlanta and Miami. Forbes estimates that its revenue reached $100 million last year and could grow significantly in 2025.
Then there is Aurora Innovation. Founded in 2017 by three autonomous driving experts from Google, Tesla and Uber, it has managed to stay alive and is the only publicly traded autonomous vehicle stock in the US. But more than three years after going public, it has yet to book any revenue. And it has been forced to delay the launch of its driverless truck services – twice. Co-founder and CEO Chris Urmson says that won’t happen again, and next spring Aurora will be on a similar path to commercial success as its Alphabet-backed rival, which he led when it was being incubated inside Google.
“We expected this to be a hard enough problem that there would only be a handful of people to solve it. … And it kind of plays out that way,” Urmson said Forbes. “Waymo seems to have cracked it and we’re on the verge of launching in April.”
This launch, originally slated for 2023, will begin with a single semi truck hauling cargo between Dallas and Houston. Others will follow, and Aurora hopes to have “dozens” of trucks on the road by the end of the year, some of them traveling a second route between El Paso and Fort Worth.
It’s a deliberately slow start. And even if all goes well, investors will have to be patient, likely for years, before Aurora generates the revenue and earnings to justify its $11.7 billion market cap. Aurora isn’t facing any immediate risk from the funding (it has more than $1 billion), security or management problems that have killed some competitors. But the timeline for when and if it goes into the black remains unclear — assuming all goes well in April.
Meanwhile, the challenges, both technical and business, are formidable: developing better computer systems at instant processing of visual data, finding cheaper and more powerful sensors for detailed imaging of road conditions and hazards, and in the case of trucks, construction and fighting a mess. relationships with freight companies and truck manufacturers.
Shipping is a huge, trillion-dollar global industry, which is exciting, but it’s also generally low-margin.
“Transportation is a huge, trillion-dollar global industry, which is exciting, but it’s also generally low-margin,” said Alysin Malek, who runs Middle Third, a mobility technology consultancy, co-founded the startup of autonomous ships May Mobility and was part of the GM Ventures team that bought Cruise in 2016. “And you have to have a whole set of relationships – which is a lot of work to set up in transportation trucks, because it’s a very fragmented industry.”
Investors are viewing Aurora with cautious optimism. Earlier this month the company’s weak shares, which have traded below $5 for most of 2024, surged 29% to close at $8.39 on news of technology partnerships with the chip giant AI, Nvidia and truck parts maker Continental. However, since then, much of this profit has been lost. Aurora closed at $6.80 on January 17. (Even at that price, the 146.3 million shares Urmson owns puts his net worth at about $1 billion.)
Aurora and remaining competitors like Kodiak and Waabi are developing AI-enabled big rigs for one simple reason: The trucking industry generates about $1 trillion in annual revenue and faces a shortage of human drivers. If they can successfully commercialize the technology, the autonomous truck business could be worth $600 billion a year by the mid-2030s, according to a McKinsey study.
Five or six years ago, operating an autonomous semi on highways seemed a lot easier than deploying robotaxies in big cities. This is because highways are simpler than urban roads and have fewer obstacles to navigate. But highways require higher speeds, and the massive size of 18-wheelers, weighing 80,000 pounds with the cab and a loaded trailer, present their own challenges. Throw in high winds, torrential rain, or slick, icy conditions, and the potential for horrific accidents increases. Even the robotaxis cannot yet operate safely at highway speeds; Waymo cars travel at less than 45 miles per hour.
George Mason University professor Missy Cummings, an artificial intelligence expert who advised NHTSA on autonomous vehicles, said Forbes she is doubtful that the highway problem has really been solved. “I have yet to see any self-driving company — car or truck — operate reliably at highway speeds,” she said. “Even Waymo quietly shut down their autonomous truck program, but nobody’s really talking about it.”
Robotic income
Urmson, with decades of experience with AVs, says ensuring safety is one of the reasons it has taken longer than anticipated to transition to fully driverless highway operations. Equipping Aurora’s trucks with powerful vision systems that have a longer range than robotaxis is part of this.
“The ability to see as far down the road as you need for trucking, I don’t think we understood that when I was at Google,” he said. “We started dealing with it, but we didn’t know how to solve it.”
He thinks Aurora will do this with Firstlight, its proprietary laser lidar technology that generates 3D maps of remote road conditions to augment camera and radar data.
Autonomous vision systems remain an ongoing challenge, Cummings said. “The bottom line is that perceptual systems are quite fragile and they cannot be easily populated by distant humans. Unless one of the companies has some kind of technological breakthrough, I don’t see highway operations happening anytime soon.”
Aurora co-founders, from left, CPO Sterling Anderson, CEO Chris Urmson and Chief Scientist Drew Bagnell
Aurora Innovation
During its current pilot phase, Aurora is transporting cargo with companies including FedEx, Uber Freight, Schneider, Werner and Hirschbach. When his driverless service launches, he expects to work with Uber Freight, Schneider and Hirschbach. By the second quarter of 2025, the company hopes to finally start reporting revenue from robotic services. It is currently being paid by customers to haul loads on training runs with safety drivers at the wheel). But Aurora isn’t ready to set revenue targets or a date for when it will be profitable.
In the company’s investor letter last October, it reported transporting more than 8,200 commercial cargoes since September 2021 and racking up more than 2.2 million test miles doing so. The same publication said it is on a “path” to gross profitability by the end of 2026. Urmson is not Auora’s only technical expert. Its co-founders are Chief Product Officer Sterling Anderson, who helped create Tesla’s Autopilot, and Chief Scientist Drew Bagnell, a Carnegie Mellon University professor who was previously part of Uber’s autonomous technology unit (which Aurora bought it in 2020).
Approaching the launch of its commercial product has not been easy or cheap. Company filings show it poured more than $2.4 billion into R&D from 2020 through the third quarter of last year. In the same period, cumulative losses reached $3.7 billion.
The good news is that we have plenty of money
Urmson is not Auora’s only technical expert. Its co-founders are Chief Product Officer Sterling Anderson, who helped create Tesla’s Autopilot, and Chief Scientist Drew Bagnell, a Carnegie Mellon University professor who was previously part of Uber’s autonomous technology unit (which Aurora bought it in 2020). Approaching the launch of its commercial product has not been easy or cheap. Company filings show it poured more than $2.4 billion into R&D from 2020 through the third quarter of last year. In the same period, cumulative losses reached $3.7 billion.
An Aurora filing this month indicates it may raise new funding at some point, but is not doing so now. It reported $263 million in cash at the end of the third quarter of 2024, and with its short-term investments, the company has more than $1.2 billion in total assets.
“The good news is we have a lot of money,” Urmson said. “We feel like we’re in a very strong position.”
Aurora Innovation
Meanwhile, competition in the truck robotics space is starting to heat up. Canada’s Waabi is also working towards launching its own commercial operations, such as Bot Auto, a startup created by TuSimple co-founder Xiaodi Hou. Kodiak, led by a former computer scientist on Google’s self-driving car project, began hauling sand off-road to oil and gas fields with driverless parts in West Texas last year, targeting a somewhat more niche market. easy. Silicon Valley’s Gatik, another startup, is eschewing highway truck routes for now and hauling groceries, office supplies and other goods in smaller commercial trucks on city and suburban roads.
The transition to commercial operations has taken longer than planned, but Urmson thinks Aurora will be the first company to do so in trucking.
“The work we’ve done in simulation, our approach to artificial intelligence and the way we put guardrails around that and leverage some of the cutting-edge techniques to make it work, I think for the most part, we’ve made the right bets. “, he said. “This is hard, and you have to get it all right.”
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