Self-driving technology developer Aurora Innovation Inc. is turning to global supplier Continental as it pushes to commercialize autonomous trucks.
The two companies said Thursday they have entered into a partnership to design, manufacture and deliver autonomous systems intended for big rigs. They expect those systems to be installed on Class 8 trucks that reach U.S. roads in 2027.
Three weeks after Aurora said its self-driving system was “feature complete,” possessing the technical capabilities needed for commercial service, the agreement now puts details behind the company’s industrialization plans.
But Aurora’s milestone and agreement with Continental comes amid uncertainty in the autonomous-trucking segment caused by technological hurdles, funding shortages, regulatory questions, pushback from organized labor and economic headwinds.
“I know the prevailing sentiment is that AV stuff isn’t going to work, but I’m more confident than I’ve ever been in terms of scheduling and timing,” Aurora CEO Chris Urmson told Automotive News.
He affirmed the company’s plans to commence driverless, commercial trucking service by late 2024, starting with a route between Dallas and Houston. Once that begins, Aurora will add self-driving trucks to its fleet on a gradual basis, working directly with manufacturers such as Peterbilt and Kenworth owner PACCAR and Volvo Group. They are already partners. That all serves as a prelude to scaling with Continental in 2027.
“We’re aligned and they’ve bought into the mission we’re on, and can accelerate the delivery of that mission,” Urmson said. “We need to get to massive scale.”
The tie-up is a pure partnership. Continental is not investing money in Aurora, which at least one industry analyst believes is primed for acquisition.
Aurora lost $1.7 billion in 2022, with minimal revenue of $68 million. That compared to a loss of $755 million and revenue of $82 million in the prior year.
Earlier this month, Aurora filed documents with the Securities and Exchange Commission outlining plans to shore up its cash position by raising $350 million that could include common stock, preferred stock, debt securities, depositary shares, warrants and other financial instruments.
It ended 2022 with about $1.1 billion in cash and short term investments, down from about $1.6 billion in the prior year.
Company executives say they have enough cash and short-term investments to reach their commercial launch, and that they’re undeterred by the choppy landscape.
Continental will invest $345 million in its own facilities to retrofit for producing the autonomous systems, according to an 8-K disclosure Aurora filed with the SEC on Thursday.
The German supplier expects the systems to be produced and assembled at a new factory in New Braunfels, Texas, and at other sites in the company’s global footprint.
The companies will pursue a hardware-as-a-service business model, in which truck operators and carriers pay to use autonomy on a per-mile basis. Trucking companies order the self-driving systems through the manufacturers, then start a subscription to use the “Aurora Horizon” platform. Continental would receive a portion of that revenue.
Beyond production, Continental will provide ongoing maintenance for the automated-driving systems. That work may occur at some existing tire service centers and store fronts, though the companies are still figuring out the details.
“It’s still being developed, how we really do that maintenance at the end of the day,” said Frank Petznick, head of Continental’s autonomous mobility business division. “But we can certainly use our infrastructure. It’s really crucial to keep replacement parts close to that truck and bring them very fast. You don’t want to have downtime.”
Aurora also maintains a separate, ongoing partnership with Ryder System Inc. involving maintenance for self-driving trucks at its trucking depots.
The new partnership marks a milestone in a three-year effort to increase collaboration with other companies in the automated-driving realm for Continental, Petznick said. Continental entered a partnership with system-on-chip provider Ambarella involving driver-assist systems earlier this year.
Next, the company wanted to find a foothold in the autonomous-trucking realm.
“Right now, with the driver shortage and a lot of transport on the roads, we thought that could be a very good commercial case,” Petznick said.
For Urmson, the partnership brings his career full circle. Continental provided lidar and radar sensors and further support for “Boss,” the vehicle Urmson and other industry pioneers used to win the 2007 DARPA Urban Challenge, one of the self-driving industry’s formative events.
Now their work together developing autonomy continues.
This article was originally published by Autonews.com. Read the original article here.