Introduction

Hey folks, there's been quite a stir in the autonomous driving sector recently!

Aurora's stock has been on a rollercoaster ride in January.

The company's CEO, Chris Urmson, announced that Aurora will soon commercialize its driverless trucks, but profitability is still several years away.

Intrigued? Let's Talk Driverless Cars (public account: Let's Talk Driverless Cars) is here to discuss this further.

(For further reference, please click: "Volvo and Aurora: A 'Powerful Alliance' in Autonomous Driving – Will It Spark a 'Chemical Reaction'?")

Image source: Aurora official website introduction

I. "Survival of the Fittest" in Autonomous Driving

The race for autonomous vehicles is a true battlefield, littered with casualties.

General Motors shut down Cruise, Ford and Volkswagen terminated their heavily funded Argo AI project in 2022, and Uber spun off its self-driving technology division after a fatal accident in 2020.

Smaller players like TuSimple, Embark, Ike, and Starsky Robotics have also faded into obscurity before many even heard of them.

However, Waymo, a subsidiary of Alphabet, stands out as an exception.

As the longest-established and best-funded autonomous driving company, Waymo operates autonomous taxi fleets in Phoenix, San Francisco, and Los Angeles, with plans to expand to Austin, Atlanta, and Miami.

Forbes estimates that Waymo generated over $100 million in revenue last year and anticipates significant growth by 2025.

Aurora is also unique, being the only pure-play autonomous driving company listed in the US.

Its founding team boasts impressive credentials. Chris Urmson, the company's founder and CEO, was a key figure in Google's self-driving team. Sterling Anderson, the chief product officer, led the development of Tesla's Autopilot system, while Drew Bagnell, the chief technology officer, was a pillar of Uber's self-driving team.

Aurora collaborates with automakers such as Volkswagen, Byton, and Hyundai, aiming to apply autonomous driving technology to mass-produced models.

Despite not generating revenue for over three years since its listing and twice delaying the launch of its driverless truck service, the CEO insists that Aurora will embark on a path to commercial success akin to Waymo this spring.

II. Aurora's Commercial "Puzzle"

Aurora's service, originally scheduled for 2023, will commence with semi-trailer trucks transporting goods between Dallas and Houston in April 2025.

More vehicles will follow, and Aurora aims to have "dozens" of trucks on the road by the end of the year, some operating on another route connecting El Paso and Fort Worth.

While this is a cautious start, it is the result of meticulous planning.

Even if everything goes smoothly, investors may have to wait patiently for several more years to see Aurora generate revenue and profits commensurate with its $11.7 billion market value.

Currently, Aurora collaborates with companies such as FedEx, Uber Freight, Schneider, Werner, and Hirschbach for cargo transportation.

Upon the official launch of its driverless services, it expects to continue collaborating with Uber Freight, Schneider, and Hirschbach.

The company anticipates reporting revenue from its driverless services in the second quarter of 2025.

Since September 2021, Aurora has transported over 8,200 commercial shipments, accumulating over 2.2 million miles of testing.

However, the company is still not profitable and aims to achieve gross profit by the end of 2026.

III. Dual Challenges in Technology and Business

Aurora faces numerous challenges.

Technologically, it needs to develop advanced computing systems to process visual data in real-time and find cheaper, more powerful sensors to capture detailed images of road conditions and hazards.

Consider highway driving: high speeds, heavy trucks, and inclement weather significantly increase the risk of accidents.

Although Aurora aims to solve these challenges with its proprietary lidar technology, Firstlight, which generates 3D maps of distant road conditions and enhances camera and radar data, AI expert Missy Cummings questions whether the problem of highway driving has truly been solved, as no autonomous driving company has yet demonstrated reliable operation at highway speeds.

Even Waymo quietly shut down its autonomous truck project.

Commercially, the transportation industry is vast but has low profit margins, requiring the establishment of complex relationship networks with freight companies and truck manufacturers.

For instance, Ali Sinha Malik, who runs the mobility technology consulting firm Middle Third, notes that building relationships in the trucking industry requires significant effort due to the industry's high degree of fragmentation.

Competition in the autonomous trucking sector is intensifying, with companies like Waabi in Canada and Bot Auto, founded by TuSimple co-founder Hou Xiaodi, striving to launch commercial operations.

Kodiak targets a relatively niche market and began using driverless semi-trailers to transport sand to oil and gas fields in West Texas last year.

Silicon Valley's Gatik avoids highway freight routes and uses small commercial trucks to deliver goods on urban and suburban streets.

Although Aurora's transition to commercial operations has taken longer than planned, Urmson believes it can be the first company to break into the trucking sector.

The company has invested heavily in simulation, meticulously handling AI, setting up safeguards, and leveraging modern technology to its fullest potential.

However, in this challenging and uncertain field, Aurora's success remains uncertain.

In summary, Let's Talk Driverless Cars (public account: Let's Talk Driverless Cars) believes Aurora is a lone warrior in the autonomous trucking sector. While it faces numerous challenges, it also harbors unlimited potential. Whether it can break through the bottlenecks in technology and business and emerge as a dawn for the industry remains to be seen. What do you think, dear reader?