Introduction dates of commercial driverless trucks are increasingly coming into focus. Daimler Trucks has – for the first time – set a date for commercialization of their self-driving trucks. Meanwhile, Aurora has provided a fresh data dump of their plans to put driverless trucks on the road next year, as well as updated metrics. Both companies have provided business projections. Waymo is taking a contrary approach.
In the automated driving world, vehicle manufacturers move on different timescales than startups. They don’t have to be in a hurry because they’re selling huge quantities of cars and trucks every year. Compare this to the startup world, where venture investors are looking to see an investment return, creating a “get to market really fast” mentality. In between are the publicly traded companies with similar pressures, but the investor base is much broader (and very fickle). Publicly traded Aurora and venture-funded Kodiak Robotics both aim to release their first fully driverless truck to customers in 2024. As a perfect example of these dynamics, Daimler’s trucks will come a few years later.
There’s plenty to unpack, let’s get at it.
Daimler’s Boston Truck Party
Daimler Trucks spun off from Mercedes-Benz about a year ago. The first-year anniversary was commemorated by a capital markets day in Boston last month, where CEO Martin Daum covered a wealth of issues, including EV, AV, recurring revenue streams, and their ESG approach. Not surprisingly, his overall outlook was optimistic. This Daimler deck from the event offers fascinating insights.
Daum announced that their autonomous trucking product could come “as soon as” 2027. Previously, neither Daimler, nor their subsidiary Torc Robotics, had stated a specific launch date, only referring “the last half of this decade.”
Here’s what’s cool: not only did Daum announce their planned commercialization date for automated trucks, he laid out a four-phase deployment approach encompassing where they will deploy and in what sequence. Phase 1 will encompass California, Arizona, New Mexico, and Texas on interstate highways I-10 and I-40. The I-40 route will continue into Arkansas and on to Memphis. Oklahoma City to St Louis on I-44 is also included. Phases 2 and 3 will add more Texas routes, as well as continuing eastward from Memphis on I40, connecting to I-95 on the Eastern seaboard. I-10 plays prominently coast to coast, and in Florida there’s a tie-in with I-75 to reach Atlanta. I-95 and the major interstate highways nationally come online in Phase 4.
As you can see from the image below, next to the four-phase map is a bar chart indicating mileage added each year from 2027 to 2030. This is just conceptual, as the vertical axis is unlabeled. There’s no explicit statement that the map phases match with these four years, but with the two charts side by side that’s my hunch.
Daum also reiterated Daimler’s “open” go-to-market plan, in that they will sell customers their homegrown robotic driving system via Torc Robotics, at the same time supplying vehicles that customers can equip with autonomous driving technology from other vendors. The latter is very important for the broader automated driving industry, as this stimulates competition across the ADS space.
Daum offered an interesting projection on the business side too. He said that in 2030, the company expects to generate over 3 billion euros ($3.30 billion) in revenue and 1 billion euro earnings (before interest and taxes) from automated truck operations.
What do Daimler’s revenue numbers mean in the real world? To answer this question, I turned to my go-to trucking expert Lee White, who spent decades at UPS and after retirement worked for TuSimple as VP of Strategy until late last year. At UPS he was very involved in their evaluations of automated driving tech and setting a path forward for eventual adoption.
I asked Lee, who now runs LM White Consulting, about the Daimler numbers. He came back to me immediately (I think he did the math in his head): “Breaking down the $3B Euros into trucking math, it would mean more than 6,000 trucks driving 1,000 miles a day.” He assumed $2 per mile with the trucks running five days per week.
In North America, Daimler Trucks sells around 70,000 Class 8 trucks per year via their Freightliner brand. Using White’s number of 6000 trucks, this works out to 1500 per year.
White sees the information shared by Daimler as very encouraging to the AV trucking industry. “We have the leading OEM communicating definitive plans on when they will enter the market, as well as the expected revenue stream. It gives us some commercial handles we can hold on to for the future of AV trucking. That is a very bright north star for the industry!” He also noted that Daimler did not communicate the business model or details of how they will generate that $3B Euros. At some point I expect we’ll be hearing about this, but not anytime soon.
One of the strongest plays in automated trucking is Torc Robotics, 51% of which is owned by Daimler Trucks. I recently had an opportunity to experience the Torc automated driving system on freeways near their operations center in Albuquerque. From knowing the team for some time and having many discussions over the years, I expected their truck would run well on the highway. I was not disappointed. The vehicle operated as well or better than an alert professional truck driver, handling lane changes, merging traffic, and freeway-to-freeway interchanges. Their in-vehicle monitor showed vehicle data, relative lane position, and the presence of nearby vehicles, much like one sees in a robotaxi ride. Their “lane bias”technique was particularly effective, moving laterally a few feet to create more space between the host truck and another vehicle passing or merging. This is illustrated in the image below. As another truck was starting to pass the Torc truck on the left, the Torc system checked lane occupancy on the right. See that the right lane had no traffic, the vehicle moved towards the right-side of its lane, creating more space between the passing truck and the Torc truck. The image shows the latter stage of the passing maneuver, at about the time the Torc vehicle would move back to the center of the lane, i.e. the default position.
If you’ve ever driven a large vehicle (like the RV I used to have) on the highway while passing a truck, you’ll know that there can be squirrelly wind and air pressure between these two large bodies with significant air passing between them. Controlling the vehicle can be a bit challenging. This is why the Torc vehicle creates space when possible, as just one more aspect of reducing risk.
Torc also demonstrated their capability to run on surface streets near the freeway. More on this in an upcoming article.
Aurora Raises the Stakes, Death Vigil Postponed
Aurora, another leader in the automated trucking space, provided their 2Q23 report last month. It was upbeat yet they backed up their assertions with data and metrics which I’ll discuss here, along with some industry context.
Aurora said they are now logging over 17,000 commercial miles per week. So far this year they have delivered 2,290 loads for customers including FedEx, Werner, Schneider, and Uber Freight, driving more than 630,000 commercial miles with nearly 100% on-time performance. The Aurora driverless-intent vehicles are being operated under the supervision of vehicle operators.
With all this activity and promising performance indicators, one might think all is rosy. But the doomsayers have long been holding a vigil for Aurora’s demise, due to the company burning through cash at a fast pace. “Aurora can’t survive at this spending pace and will run out of money long before they generate any substantial revenue!,” has been the typical refrain. My recent articles have pushed back on this view, simply because I couldn’t imagine Aurora’s Board and leadership blithely trundling along until the bank account hits zero. My position has been: “I don’t know what the plan is, but they’ve got to have a plan. It’s just not public.”
Aurora’s burn rate has been going in the right direction. The company said it narrowed its net loss for the 2Q23 to $218 million compared with a loss of $1.1 billion in the same quarter last year. “Still much too high,” my colleagues would say.
But then, in July, Aurora unveiled their plan, raising $853 million of total gross proceeds through a public offering, which included “very strong support from key institutional and strategic investors” according to their press release. Aurora said their beefed-up total liquidity is now $1.6B “which will fund us through our planned Commercial Launch and into the second half of 2025.”
Problem solved? Nope. Given their cost structure, revenues by mid-2025 may be substantial but far short of profitability. Once they have a mature self-driving product, they may reduce staff to lower the cash burn. Still, another funding infusion will almost certainly be needed in a couple of years.
Lee White said, “the biggest issue for Aurora will be the speed and path to commercialization in order to get to cash flow positive and offset the over $200M per quarter spend. This won’t be done by 20 trucks running between Dallas and Houston or any sort of in-house truck build out. Aurora will need more than 1500 trucks running with the Aurora Driver 1,000 miles per day to create revenue offsetting the ongoing staffing and R&D expenses at Aurora: that is the challenge in the next 24 months.” He also pointed to a key item not in Aurora’s control: sourcing 1500 driverless-ready tractors from their manufacturing partners, which require specialized levels of redundancy and other fail-safe features.
Aurora has strong partnerships with PACCAR and Volvo, but the pace at which these companies will produce driverless-ready trucks, and the number that will be allocated to Aurora, has not been discussed publicly.
Aurora’s 2Q23 report discussed recent progress in this regard. During 2Q23 PACCAR completed a 1.5 million equivalent mile durability test of a Kenworth cab with the Aurora Driver hardware installed. The company said the Aurora Driver hardware remained fully functional at the end of the test. Regarding
Volvo Autonomous Solutions, Aurora expects to begin testing a prototype Volvo VNL, powered by the Aurora Driver, in the first quarter of 2024.
The Aurora Scoreboard
Meanwhile, Aurora has released a new software version (Aurora Horizon Beta 7.0) and continues to add substance to their go-to-market narrative. Their premise goes like this: “The Aurora Driver will be ready to launch when we have a closed Safety Case for our Dallas to Houston lane. Our Safety Case is a comprehensive, evidence-based approach to confirming our self-driving vehicles are acceptably safe to operate on public roads. It goes beyond just ensuring the vehicle drives well enough for a demo; rather, it demonstrates that our product, and our company, are holistically and sustainably safe.”
Key to this process is the Aurora’s Autonomy Readiness Measure (ARM), which they explain as “a weighted measure of completeness across all claims of our Safety Case for the launch lane, which reflects the percentage of work needed to move from Feature Complete to our next critical milestone — Aurora Driver Ready.” The ARM is the progress tracker, which reached 65% at the end of the second quarter, a 21-point increase from the previous quarter. Aurora continues to be very bullish, stating that “we are on track to achieve Aurora Driver Ready later this year” and “we continue to expect to be contracted for commercial launch by the end of the year.”
While the ARM is a safety metric, Aurora’s Autonomy Performance Indicator (API) measures the operational performance of the Aurora Horizon service in real-world conditions. “This metric allows us to track not just the state of our technology, but the maturity of our processes and procedures in operating our business,” Aurora says. In particular, any need for on-site support will severely erode profitability – imagine the cost of dozens of support vehicles on standby along the route, complete with dispatchers and highly trained technicians. So, the indicator penalizes the use of on-site support. The API also considers autonomous miles driven which require remote input from the Aurora Services Platform. Aurora says that for 2Q23, the API was 97%, a slight increase from the previous quarter.
Compared to performance in the first quarter, about half of the 2Q loads had an API of 100% and nearly 75% of the loads had an API greater than or equal to 99%.
What about the conditions that required support? Aurora emphasized that none of the support their vehicles received was required to keep the vehicles operating safely: “In over 100,000 commercially-representative miles driven on the launch lane in 2023, including over 65,000 commercial miles during the second quarter, we experienced zero safety-critical interventions.”
Again, I turned to Lee White for a trucking professional’s perspective. What does this 97% API level mean to a trucking fleet? He said, “When I receive these updates, I evaluate them on a path to deployment. Translating Aurora’s 97% Autonomy Performance Indicator of 97% to trucking reality, this means one out of every 33 loads would have needed some type of ‘assistance’ – and that could be as basic as the truck would have called the mission oversight center for help, or perhaps Aurora would have sent out a recovery driver if there was deeper intervention required. On-Road assistance issues for trucking fleets results in potential service failures for customers and a much higher cost for the maintenance issue. The trucking fleets have invested in their maintenance programs to ‘de-risk’ on-road breakdowns as much as possible. For example, OEMs and fleets use preventive maintenance schedules and advanced telematics information to predict and schedule maintenance to be done in their shops, to minimize the chance of a breakdown on road. The Best-in-Class fleets are at one breakdown per 1,000 truck days on road – so they have achieved success in limiting the on-road exposure both in service and in cost.” Lee provides a very sobering reference point: how long will it take for Aurora, or any other driverless truck provider, to achieve this level of performance?
Is Waymo Via Out For Good?
While Daimler Trucks and Aurora have been revving their engines, Waymo is downshifting. Waymo has been more in the news regarding its robotaxi operations, but their long-running truck AV program, called Waymo Via, has resulted in a very strong pre-commercial offering. However, early this year Waymo greatly reduced operations of their driverless trucking commercialization activities. In July, they put the whole thing on ice, repurposing many of their trucking staff to robotaxi operations. As Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov noted in a blog post, “With our decision to focus on ride-hailing, we’ll push back the timeline on our commercial and operational efforts on trucking, as well as most of our technical development on that business unit.”
Interestingly, though, in July both Waymo and Daimler Trucks re-affirmed that their long-running partnership to develop a driverless-ready tractor will continue.
Did Waymo get it backwards? Back to Lee White, my truck business sensei, for more truck math: “I am disappointed with Waymo Via’s announcement. I am very impressed with what Waymo and Cruise are doing with the passenger cars from a commercialization standpoint – they are adding cities and demonstrating that AV vehicles can be deployed safely at scale! My disappointment is on the economics; a 3% penetration into the trucking market is worth more than a 50% capture of the robotaxi total addressable market. That 3% penetration can be achieved in the lanes where Waymo Via and the other AV trucking companies are currently testing. From my viewpoint, Waymo Via has the potential to provide a faster ROI on trucking lanes than the passenger side. And Waymo Via already has the OEM secured with Daimler, which is critical to scaling. Let’s hope this is a short pause, with Waymo’s return powered by the economics of AV trucking.”
Why would Waymo step away from such a straightforward revenue play on the trucking side?
I can (facetiously) imagine the Alphabet Board saying to Waymo, “You’ve had years of fun with your people-moving sandbox and your freight-moving sandbox. Times have changed and now you have to pick one. Which will it be?”
It’s important to remember that at a fundamental level, Waymo was founded to “change the world” in personal mobility. After an early exploratory phase examining highway driving and personal vehicles, they zeroed in on robotaxis, which have immense potential to revolutionize the way people travel. This has always been their Big Audacious Dream and now they’re of one mind with a single offering. For Waymo to step away from robotaxi and retain trucking could have sent shockwaves through their investor base and cause a revolt from the tech team.
Indeed, Waymo has a very strong offering in the driverless trucking space. If they hold on to this and decide to re-energize it in a couple of years, Waymo Via will be a major player (and could even come to market sooner than Daimler/Torc). For now, there are some strong synergies at play in their new approach. I have long said that robotaxis must be able to travel on freeways as well as surface streets to fully scale up and generate the revenues they need. The Waymo Via team has been living and breathing highways for years. I’m confident that the highway-level autonomy smarts from their former truck developers are quickly being applied to a “Gen2” Waymo robotaxi that can travel on all the types of roads that we are able do on a daily basis. Waymo has already noted in recent press they are now testing on highways in preparation for commercial launch beyond streets only.
Where Are We Now?
Along with their deployment partners, we’re now down to five major players developing commercial autonomous trucks operating long-haul on highways: Aurora, Kodiak, Plus, Torc, and Waabi.
Lee White and I are both upbeat about recent developments. In particular, he notes, “This is fantastic news that Aurora completed this recent fundraising in this challenging capital market. It is a very positive sign for the entire AV Trucking industry.” I would add that, though they would never admit it, Aurora in particular is probably very happy to see their major competitor, Waymo, exit the stage.
I can’t stress enough the critical role of the truck manufacturers. We are now in a world where four major truck OEMs are deep into the platform development for truck autonomy: Daimler, Iveco, PACCAR, and Volvo. Traton is the big question mark. They were a significant player when their partnership with TuSimple was underway from late 2020 to the end of last year. Traton dissolved the partnership due to safety mishaps and management turmoil at TuSimple. They developed significant autonomy expertise on the manufacturer side of this relationship, and I surmise they have been industriously looking for a new partner during 2023. If/when an announcement is made, it could be one of the most significant developments of the year.
In September 2014, the Mercedes Benz truck division enthralled bleachers-full of industry luminaries and journalists at a test track in Germany by introducing their Future Truck (FT). Automated Class 8 trucks were zooming around the loop at full speed, pulling trailers emblazoned with “FT 2025” (see picture below.) I highly recommend the accompanying video, which presented the concept of the driver turning over control to the autonomy and then swiveling around to do other work on his computer. While the press release did not state that the company had “set a date” for introduction, the 2025 timing was a subtle message of their ambitions. I suspect that the management and engineers of Mercedes had no clear idea at the time how they would proceed to achieve full commercial autonomy by 2025, but a vision was set. Mercedes, now Daimler Trucks, has been continuously working toward the now announced 2027 date ever since then, with forays into truck platooning, developing increasingly sophisticated Advanced Driver Assistance Systems, and eventually acquiring Torc Robotics and ramping up significant internal resources to now have a definitive launch date.
Yeah, Daimler is late by two years. At least according to the brave announcement of yesteryear. While they may not be first to market, Daimler’s entry will be a definitive marker. If all happens as planned for the companies discussed here, the real-deal launch of driverless trucking – at scale – is not far away.
Disclosure: I am a strategic advisor and/or hold equity in companies named in this article, including Aurora, Daimler Trucks, and Plus.
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