I listened in on Aurora Innovation's analyst conference last week ($AUR ) last week, where George Genarikas, a sustainability analyst from Canaccord Genuity and David Day, CFO of Aurora Innovation, had a conversation. All autonomous car fans can be excited.
Genarikas initiated the conversation with a question about an important upcoming date in a few months, namely April, and asked for an explanation of possible existing bottlenecks for the commercial launch. David Day thanked him for the invitation and asked for a few minutes to give a brief introduction to Aurora for those who are new to the company. He said Aurora is a mission-driven company with the goal of delivering the benefits of self-driving technology safely, quickly and widely. The core of the product is the Aurora Drivera combination of of state-of-the-art hardware, verifiable AI software and data serviceswhich serves as a common basis for various vehicle platforms and use cases.
The first target market is truck transportation. Day emphasized the enormous market potential (TAM) of over one trillion US dollarsresulting from more than 200 billion vehicle miles driven per year. More importantly, however, he said that Aurora can create enormous added value for customers and the freight transportation and the freight transportation industry. This includes not only increased safetybut also operating costs, higher capacity utilization, improved fuel savings and lower insurance costs due to fewer and less serious accidents. due to fewer and less serious accidents. Aurora's core business is focused on the Aurora Driver and its technologieswhile for large-scale commercialization on a large scale through a partner ecosystem.
Among the important partners included the OEMs Volvo and PACCARwhich together represent around 50% of the heavy-duty truck market and are helping to develop autonomy-capable platforms for scaling. With Continentala leading Tier 1 supplier, there is a partnership with partnershipin which Continental will manufacture Aurora's future hardware kits on a large scale and also provide support in the areas of service, maintenance, warranty and even financing. A further partnership exists with NVIDIAfrom which Aurora will supply the Drive Thor system-on-a-chip which will be integrated into the Aurora Driver hardware.
Also on the commercial side there has been great progress with well-known customers such as FedEx, Werner, Schneider, Uber Freight, Perschbach and Volvo Autonomous Solutions. In recent years, Aurora has delivered over 9,500 loads with almost 100% on-time delivery which underlines its operational maturity. In the regulatory area Texas is Texas is the launch marketwhere they have signaled that they will be ready as soon as Aurora is ready.
Financially, Aurora is in a solid position with solid position with liquidity of around 1.2 billion US dollars at the end of 2024which is expected to last into the second half of 2026. The commercial launch will begin, generate revenueswhich in 2025, however, will be in the mid single-digit million range million range in 2025, as the focus will initially be on developing the technology.
With regard to the question of the April launch, there is no significant new information compared to previous statements. The technology is developing very welland the trucks are already performing very well on the roads todayincluding the launch route Dallas to Houston as well as Fort Worth and El Pasomostly autonomously with a driver on board. In April the driverless operation on the route Dallas to Houston whereby initially a single driverless vehicle will initially will initially deliver loads to customers. This cautious approach will see a gradual increase in the number of driverless trucks on this first route. The year 2025 will be characterized by the development of the technology promisestarting in April.
Next, Genarikas asked about the OEM partnershipsespecially the close relationship with Volvo and the relationship with PACCAR. He asked about the the combined market share of the two OEMs in the US market and the intensity of the relationship with PACCAR. David Day confirmed the very close relationship with both companieswhich together account for approx. 50% of the Class 8 truck market. market. There are long-standing, multi-year partnerships with the approach of developing fully redundant, autonomous trucks that can be built on a large scale.that can be built on a large scale. The key is to have great partners to build and compete at scale; it's less about the first driverless truck and more about building a driverless business. building a driverless businessfor which strong partners are essential.
Genarikas then brought Daimler another major truck manufacturer in the US that has gone its own way, and asked if there were opportunities for Aurora to work with other OEMs in the future. opportunities for Aurora to work with other OEMs in the future.
Day reiterated that Aurora sees the Aurora Driver as the "must-have" technology in this area and would would like to offer it to all OEMs. There are no restrictionsto do so, and there are even advantages, as customers and OEMs do not do not prefer individual solutions. The goal is for the Aurora Driver to eventually power any truck platform..
The conversation turned to the future challenges . Genarikas asked about the confidence regarding scaling up to additional routes routes (taking into account the regulatory framework) and the ability to ability to reduce both technology and operating costs to become profitable by 2027 and beyond. Day was very confident regarding the scaling to further routes and pointed out that this would be demonstrated in the course of 2025. The cautious approach to the introduction of new routes was justified by the overriding principle of safety principle; the aim is to ensure that the system is ready for any environment. By end of 2027 is expected, half of the USA and almost all of the lower states, subject to states, subject to regulatory approvals.
Another question concerned Potential outside the USA. Day emphasized that the US market, with one trillion US dollars and 200 billion miles driven, offers enormous potential and that the focus is therefore primarily on. However, it is recognized that the that the need for autonomous truck transportation is not limited to the USA and that there are also great opportunities in other parts of the world. These opportunities will be examined and prioritized in the coming years.
In the final minutes of the interview, Genarikas asked about the competitive environment in this trillion-dollar market and the expectation that most customers will rely on dual sourcing dual sourcing. He inquired about the the likely speed at which competitors could enter the market, given Aurora'sgiven Aurora's many years of development work. Day expressed the view that the competitive competitive environment currently appears quite clear and that Aurora has an open playing field. At the same time, he emphasized that Aurora does not have to be the only successful player, as the market is huge and other competitors may enter at a later stage. However, he pointed out the challenges and the failure of some companies in the past and emphasized that this is not and emphasized that this is not a task for a few people, but requires a lot of hard work. He also sees opportunities for companies that focus on specific niches niches. Overall, Aurora sees enormous potential and the field seems to be quite open at the momentbut there are opportunities for others to get involved.
The analyst conference with Aurora Innovation provided a detailed insight into the company's progress and plans. Particularly noteworthy is the upcoming launch of driverless operations in April 2025 on the Dallas-Houston route, which represents an important milestone. The The company's financial position appears solid and funds are expected to last into the second half of 2026. I find the use case of self-driving trucks much more interesting and quicker to realize than robo-taxis.
