Financial challenges shutter self-driving truck company Embark Technology

Self-driving truck company Embark Technology is shutting down.

The company announced its closure Friday in an email from CEO Alex Rodrigues to Embark employees.

This is the second recent major failure of autonomous technology company. Argo AI Inc. folded in October after its main backers Ford Motor Co. and Volkswagen decided to pull the plug on the autonomous vehicle technology startup.

Rodrigues cited an inability to raise capital and delays in “the prospect of scaled commercial deployment” of autonomous trucking for the closure.

“I am writing to you today with a heavy heart. The last nine months have been tough for the autonomous trucking industry, and for Embark — the capital markets have turned their backs on pre-revenue companies,” Rodrigues said.

“In challenging times, it is the whole company’s job to be flexible and optimistic in pursuing a sometimes-changing direction — and it is the job of the CEO to navigate the challenges and make sure those directions ultimately get the team to the other side. You held up your end of that bargain, I was not able to hold up mine — for that I am profoundly sorry,” he wrote.

The company is laying of 70 percent of its employees and shuttering offices in Southern California and Houston. The remaining 30 percent will stay on to execute the San Francisco company’s wind down and sale of assets.

The company said in an SEC document filed Friday that its actions affect 230 employees. But it did not provide a number for its total employment. The company listed its headcount at 251 in a November SEC document.

Employees will be paid through June 2. Medical benefits will continue until Aug. 31.

Embark’s previous public announcement focused on expanding its footprint.

A year ago, the company said it has partnered with real estate investment firm Alterra Property Group to identify locations across the Sun Belt that could be used as transfer points for autonomous trucking.

Embark and other self-driving technology companies have worked on a business model where human drivers would shuttle freight to highway adjacent hubs. An autonomous truck would then drive the freight hundreds of miles on a digitally mapped interstate to another hub, where a human would again take the wheel for delivery.

Embark previously said the system would be in place next year, but technical hurdles have stretched out the timeline for the business.

Embark also has engaged in extensive testing of robotic trucks in snowy conditions, among the most difficult of autonomous driving tasks.

Industry insiders believe the autonomous driving technology industry is undergoing a shakeout with weaker and undercapitalized players at risk.

Chris Urmson, one of the founding members of Google’s self-driving car project more than a decade ago, and now the CEO of Aurora Innovation, said its not unlike the early days of the automotive industry.

“I’ve been saying for six to seven years that we’re going to see consolidation,” he said during then December Automotive News Congress  in Detroit. “It doesn’t mean that it’s not an interesting space. It just means some people had the combination of capabilities, capital and technology, then made the partnerships to go and succeed.”

Aurora is developing both autonomous trucking and robotaxi technology.