The Race to Build Self-Driving Trucks Has Four Horses and Three Jockeys

These are the companies set to dominate the highways of tomorrow.

Over the last five years, as it’s become clear that self-driving cars will take longer than expected to arrive on most American streets, some of the biggest players in the industry have turned their attention to long-haul trucking. Alphabet Inc.’s autonomous vehicle unit Waymo, the leader in robo-taxis, launched its trucking division Via in 2017 after a handful of start-ups, including Otto, Starsky Robotics, and TuSimple Holdings Inc., had entered the field. Aurora Innovation Inc., one of Waymo’s most formidable competitors, recently decided to focus its efforts on bringing a trucking product to market before branching into ride-hailing. The logic behind the pivot is twofold: highways are easier to navigate than city streets and cargo is less demanding than human passengers. If a robo-truck drives extra cautiously on its way to a big box store, as Aurora co-founder and CEO Chris Urmson put it when I spoke to him earlier this year, “the roll of toilet paper doesn’t care.”

There are also advantages on the business side. In ride hailing, robo-taxis need to outperform and undercut a large, flexible and relatively cheap pool of gig workers. Truck drivers, on the other hand, are in short supply, a problem that only promises to get worse as e-commerce continues to boom. In one possible version of the autonomous future — a model known as “depot-to-depot”—robot drivers would cover the long and relatively simple stretches of interstate driving and leave the trickier surface streets to human drivers who would take over at highway off ramps. The robots could operate for hours on end without running afoul of service time rules and needing to stop only for fuel, while truckers would still have jobs and could sleep in their own beds at night. TuSimple CEO Cheng Lu estimates that driverless trucks running more hours on the road can reduce hauling costs by 50%.

Self-Driving Truck Hook-Ups

The biggest names in big rigs have all hitched with one of the three leaders in autonomous trucking

In theory, it’s a win-win, and a multibillion dollar business opportunity. The blank-check companies, naturally, have taken notice: special purpose acquisition company (SPAC) Hennessy Capital Investment Corp. V is reportedly in talks to merge with self-driving truck startup Plus.  Yet there are signs that self-driving trucks are already following robo-taxis into the “ trough of disillusionment.”  After a splashy demo covering ten miles on a Florida turnpike in 2019, Starsky Robotics folded last year. In December, the autonomous delivery start-up Nuro acquired trucking start-up Ike, leaving its plans for that market uncertain. For all the advantages that trucking offers, it also comes with unique challenges. “Because of the heavier weight of the vehicle and the high speeds, if something goes wrong, it’s catastrophic,” says Bruno Bowden, a former engineering manager for simulation at Aurora who is now an angel investor, “You don’t get a small accident with a big rig truck.” To avoid these catastrophes, self-driving trucks need to see farther ahead than cars do. “The heart of the problem for driving is predicting about five seconds into the future,” says Bowden. But with trucks, he says, that magic number doubles.

It’s likely that safety drivers will remain in cabs for years to come as companies hone their sensor technology and train their software for every highway scenario. It’s expensive and painstaking work that can overwhelm even the best-run start-ups. The consensus within the industry is that three contestants stand the best chance to make it to the finish line: “It’s TuSimple, Aurora and Waymo,” says Grayson Brulte, co-founder of Brulte & Co., a consulting firm focused on transportation. TuSimple, a San Diego based-company that raised $1.35 billion in an initial public offering in April, is in the pole position, as Brulte sees it, because of its singular focus on trucking and its partnership, begun three years ago, with Navistar International to build autonomous trucks. “They’ve got the head start on it,” says Brulte.

Since that deal, Waymo and Aurora have each struck their own (non-exclusive) agreements with truck makers, leaving the four dominant manufacturers in the U.S. market—Daimler Trucks, Volvo Group, Paccar Inc., and Navistar—tied to one of the three leaders in autonomous trucking. (See chart above.)  If robots are to replace truckers on U.S. highways, these are the companies likeliest to be in the driver’s seat:

TuSimple

Waymo Via

*Spec is for Waymo’s 5th generation driving system yet to be applied to trucks.

Aurora Innovation

As featured in Bloomberg on May 1, 2021.

Self-Driving Cars Face Greatest Skepticism in the South

Despite self-driving pilots fanning out across Southern states like Texas, Florida, and Georgia, our March 2021 Morning Brew-Harris Poll survey found that the region is far more skeptical of autonomous vehicles than elsewhere. You can read our high-level survey findings here.

The big finding: Compared with those in other regions, US adults living in the South are less likely to ride in an AV if available, less willing to pay for them, and less likely to feel safe if they somehow wind up in one. 

• It’s the only region where the majority of respondents (57%) said they’re not very likely or not at all likely to ride in a self-driving car if given the chance. 

Florida-based AV consultant Grayson Brulte told us this is likely because of a lack of exposure among residents of the South who live outside of regional tech hubs like Austin, Miami, and Atlanta. 

“Perhaps they’ve never met anyone who has been for a ride, or they have a skepticism of Big Tech,” Brulte said. “And it’s the industry’s fault for not engaging with these individuals and saying, ‘This technology is going to impact your life, we’d like to demonstrate it for you, we’d like to learn from you.’”

Reaching out 

Brulte said in general the industry has done a good job connecting with residents of tech hubs—he cited Argo’s involvement in community programs in Miami as an example—but that they’ve done little outside of urban bubbles. 

From Brulte’s POV, outreach doesn’t need to be more complicated than demoing an AV in a parking lot, because, “The magic in all this is when they see the steering wheel move,” and no one is driving. The Society of Automotive Engineers did something like this between 2017 and 2019 called “Demo Days.” 

• SAE gave rides to 1,395 participants across Detroit, LA, Tampa, and Babcock Ranch, FL, and found that 88% of riders were enthusiastic about self-driving cars after riding in one, up from 82% pre-ride. 

Bottom line: Last week, Waymo’s new co-CEO Tekedra Mawakana told us that, “At a national level, we’re seeing more interest in autonomous driving technology.” But there are still many skeptics who aren’t on board. 

As featured in Emerging Tech Brew on April 19, 2021

Aurora’s Plan to Catch Waymo in Robot Trucks, Then Taxis

On Feb. 11, about a month after closing on the acquisition of Uber’s Advanced Technologies Group, or ATG, the self-driving-car startup Aurora held an all-hands meeting. Like every other company meeting since the pandemic began, it took place via videoconference and included the simulacra of in-person office interactions. When managers handed out awards, there was no applause from co-workers. Instead, Aurora co-founder and Chief Executive Officer Chris Urmson hit a button that produced canned cheers and clapping. “I am so looking forward to not having that button,” Urmson said after setting it off for the third time.

The weeks leading up to the meeting had been full of upheaval at Aurora Innovation Inc. Uber Technologies Inc. had essentially paid it to take ATG, forking over $400 million for a stake in the combined enterprise, which was valued at $10 billion. The deal allows Uber to unload a unit that was hemorrhaging cash while keeping a foothold in autonomous vehicles. Aurora, in return, adds almost 1,000 employees, more than doubling its workforce to 1,600 and bolstering its bid to become a credible competitor to Alphabet Inc.’s Waymo. The deal also gives Aurora what could be a bigger prize: the right to provide robo-taxis to Uber’s ride-hailing network.

“Having a strategic relationship with Uber is an incredible advantage,” Urmson says. Over the past two decades he’s done more than perhaps anyone to push the development of autonomous-driving technology. Now he’s in a leading position to be the first to truly commercialize it. But with the addition of hundreds of highly paid engineers and a large pool of potential customers, Urmson is under more pressure than ever to bring a product to market.

Since co-founding the company in January 2017—with former Tesla engineer Sterling Anderson and Drew Bagnell, who came from ATG—Urmson has been lining up deals to ensure that buyers will be waiting when his robot drivers are ready. The plan is to begin with long-haul trucking. Earlier this year, Paccar Inc.and Volvo Group signed agreements to install Aurora’s automated driving system in their trucks. The two companies would then offer these trucks, capable of operating themselves for long stretches, to their shipping customers, who would pay Aurora for the hours of automated driving.

After establishing itself in trucking, Aurora would begin cherry-picking the easiest, most lucrative trips from Uber’s ride-hailing network. A customer looking to go 25 miles, mostly by highway in light traffic, might be greeted by a driverless car. Aurora already has a deal with Toyota Motor Corp. to build robo-taxi fleets.

A 2019 investment from Amazon.com Inc. sets the company up for a similar strategy in delivery, allowing it to service the easiest routes for e-commerce customers. If all goes right, its robot drivers would take over entire fleets of cars, trucks, and vans.

Urmson says Aurora’s driving system can become better than the average trucker in a matter of years, not decades. He has a target in mind for when the first trucking product will be ready, though he’s not yet willing to share it. He knows as well as anybody how the work of building autonomous vehicles can expand endlessly. At 44, Urmson has been working on self-driving cars for most of his adult life, first as a 27-year-old graduate student at Carnegie Mellon University, where he led teams that competed in three Defense Advanced Research Projects Agency (Darpa) challenges, winning the final race in 2007. He then spent eight years with Google’s self-driving-car project, now known as Waymo.

Urmson left in 2016, shortly after Google passed him over for the CEO job and instead hired former Hyundai Motor Co. executive John Krafcik. “I’d been leading and building that team and, for all intents and purposes, general managing it for years,” he says. “Of course I wanted to run the program.” (Krafcik announced in April that he was leaving Waymo.)

Aurora was born from meetings Urmson had with Reid Hoffman, the LinkedIn co-founder and venture investor, and Mike Volpi of Index Ventures. The three thought that the automotive industry wouldn’t tolerate a Google monopoly in self-driving technology and that Urmson was the one to develop a viable alternative. “Chris had already gone through and solved the problem once,” Hoffman says, “and now knew which things he would rebuild entirely differently.”

In 2018, Hoffman’s firm Greylock Partners and Volpi’s Index co-led a $90 million fundraising round in Aurora, which has now raised more than $1 billion. It’s likely to take even more before Aurora will be able to support itself. “I don’t understand how Aurora is going to be able to survive without raising more capital,” says Grayson Brulte, co-founder of Brulte & Co., a consulting firm focused on transportation. The acquisition of ATG and its hundreds of engineers adds to that burden. “It’s like taking two money pits and making a bigger one,” says one former Aurora manager who asked to remain anonymous when talking about his past employer.

Urmson doesn’t shy away from the possibility the company may need to raise more money, and he’s confident it would be able to do so. He says the ATG merger is already showing tangible benefits. Before the deal, Aurora spent hours calibrating the sensors on each of its vehicles, with workers walking around holding placards at set distances to be sure the sensors measured accurately. ATG devised a faster, automated process using large turntables to rotate the vehicles. On the February call, a former ATG engineer said the turntables would soon be in place at all of Aurora’s vehicle depots.Electric vehicles, self-driving cars, and whatever else Elon Musk is up to this weekGet Bloomberg.com’s Hyperdrive newsletter.

Aurora will need every possible advantage in the race to bring autonomous vehicles to market. The leading competitor is Urmson’s old shop, Waymo, which, in addition to launching the first fully driverless ride-hailing service in suburban Phoenix last year, has a passenger-sharing agreement with Uber’s top rival, Lyft Inc. A handful of startups that have joined forces with auto manufacturers, including Cruise with General Motors Co. and Argo AI with Ford Motor Co., also promise to be formidable.

Urmson sees Aurora’s singular focus as its advantage. He doesn’t have to worry about quarterly earnings in other parts of the company or trying to keep the Detroit office at arm’s length. “This is the thing we do,” he says. “This is what we’re going to be excellent at.”

During the February meeting an employee asked if TuSimple, a San Diego-based autonomous-trucking startup that raised more than $1 billion in an initial public officer this week, might beat Aurora to that market. “We do think that we are going to be first or at least meaningfully first,” Urmson replied. He defines “meaningfully first” as a commercial product that can be scaled safely.

Urmson also believes Aurora’s lidar—the laser sensors that most autonomous vehicles use to perceive the world around them—is superior, giving it an edge. In 2019 the company bought the Montana startup Blackmore Sensors & Analytics, which makes a type of lidar called frequency-modulated, continuous-wave, or FMCW, that allows the sensors to simultaneously measure range and velocity, which vastly simplifies the problem of predicting the movements of faraway objects. “When you’re driving a truck at 65 miles an hour on the freeway and you want to react to the rare events, you need to see 300 meters down the road,” says Urmson. He says no one else in the industry can match that performance.

TuSimple and Waymo—which started its trucking division, Via, in 2017—also promote the superiority of their sensors. A wild card is Tesla Inc., whose CEO, Elon Musk, sees the lidar arms race as a never-ending fool’s errand. For the past six years the automaker has been using its millions of electric-vehicle customers as test subjects in a large-scale public road experiment in camera-based autonomous systems, offering an “autopilot” that allows drivers to relinquish control to the car. Musk has said Tesla owners will eventually be able to use their vehicles as robo-taxis during downtime. Urmson is skeptical. “It’s just not going to happen,” he says. “It’s technically very impressive what they’ve done, but we were doing better in 2010.”

In 2015, Urmson gave a TED Talk in Vancouver called “How a Driverless Car Sees the Road,” explaining how Google’s software was learning to recognize cars, buses, cyclists, and pedestrians and anticipate their movements. At the end he displayed a photo of his two sons. “My oldest son is 11,” he said, “and that means in four and a half years he’s going to be able to get his driver’s license. My team and I are committed to making sure that doesn’t happen.” His son, now 17, still doesn’t have his license, but he does have a learner’s permit. Over the past few months, while trying to teach trucks to drive themselves, Urmson has also spent a few hours teaching him to drive. “He’s working towards it,” he says. “I’m not actively sabotaging him.”

As featured in Bloomberg Businessweek on April 15, 2021

Self-driving startup Cruise raises $2.75 bln from Walmart, others

Self-drive automaker Cruise, backed by General Motors Co (GM.N), on Thursday said it raised $2.75 billion in its latest funding round with additional investment from Walmart Inc (WMT.N) and others, taking the startup’s valuation over $30 billion.

The announcement comes a week after peer TuSimple revealed plans for an initial public offering (IPO), at a time when self-drive technology is yet to be commercialised.

“We are focused on our path to commercialization right now but the IPOs happening in the space right now are a great indication of the strength of the industry and the opportunity self-driving presents,” a Cruise spokeswoman said in a statement to Reuters.

In January, the San Francisco-based startup said Microsoft Corp (MSFT.O) would join General Motors, Japan’s Honda Motor Co Ltd (7267.T) and institutional investors for a combined new equity investment of over $2 billion.

On Monday, Cruise said it planned to begin deploying a limited number of its Origin vehicles for ride-hail services in Dubai from 2023, its first overseas commercial service.

“Cruise is executing a global strategy with the right partners,” said Grayson Brulte, president at consultancy Brulte & Co. “At the end of the day it will come down to who can cut the best deals which generate long-term revenue and profits.”

Cruise’s relationship with Walmart includes a trial delivery service in Scottsdale, Arizona, announced in November.

As featured in Reuters on April 15, 2021

Waymo Chief John Krafcik Resigns, Co-CEOs Tapped To Run Alphabet’s Self-Driving Tech Giant

John Krafcik, the auto industry veteran who’s run Waymo for over five years, is stepping down as CEO of the Alphabet Inc. self-driving tech giant and is being replaced by two high-ranking company executives. 

Kracik announced the surprise news via a Twitter post on Friday. Takedra Mawakana, Waymo’s chief operating officer, and Dmitri Dolgov, its long-time CTO, are both being promoted to co-CEOs, the company said. Krafcik will continue to work with Waymo as an advisor.

“After 5 exhilarating years leading this team, I’ve decided to depart from my CEO role at Waymo & kick-off new adventures,” he said on Twitter. “To start, I’m looking forward to a refresh period, reconnecting with old friends & family, and discovering new parts of the world.”

A Stanford University-trained engineer who spent most of his career with automakers Hyundai Motor and Ford, Krafcik was tapped to take over Google’s self-driving car project in 2015. He transitioned from an R&D program to the largest autonomous technology company in the U.S., creating the Waymo brand name and launching the first public robotaxi project in suburban Phoenix. More recently the company has worked to build up its autonomous logistics business, dubbed Waymo Via, amid rising competition to develop self-driving trucks and vans from competitors including TuSimple and Aurora. 

While Waymo has been the benchmark for self-driving vehicles for more than a decade, its efforts to commercialize the technology have developed more slowly than many expected. The company has said it generates revenue from partnerships with several companies it works with, though has never disclosed financial details. It has has raised billions of dollars from outside investors, in addition to billions of dollars of support from Alphabet over the years. 

“The challenge going forward for Waymo is to find a path to meaningful revenue and meaningful profitability,” says Grayson Brulte, president of consultancy Brulte & Co., who closely tracks developments in the autonomous vehicle industry. “In particular, Waymo has yet to demonstrate a meaningful path to profitability for the robotaxi business.”

Krafcik joined Google almost six years ago, after long stints as Hyundai’s U.S. CEO and as a chief engineer with Ford. His automotive career started in 1984, when he was among the first engineers hired at New United Motor Manufacturing Inc., the joint-venture auto plant created by Toyota and General Motors in Fremont, California. The plant shut down in 2009 but Toyota sold it to Tesla in 2010, and it’s been the electric vehicle maker’s main auto-assembly plant ever since.

Computer scientist Dolgov is an original member of the self-driving tech all-stars Google recruited more than a decade ago in a moonshot effort to create the first self-driving vehicles.

Mawakana, who holds a law degree from Columbia University, initially joined Waymo as its head of policy in March 2017, before being promoted to COO in 2019. She previously worked for Yahoo and eBay and is member of Intuit’s board of directors.

Notably, she is also just the second woman of color to lead an autonomous vehicle tech company, joining Zoox CEO Aicha Evans.

As featured in Forbes on April 2, 2021