Aurora CFO says 30,000 driverless trucks by 2030 isn’t as far-fetched as it sounds
Self-driving truck company Aurora laid out an audacious plan for 2030. Its CFO says its targets aren't aspirational.
Aurora, an autonomous vehicle technology company, has set an ambitious goal of deploying over 30,000 self-driving trucks on roads generating $5 billion in annual revenue by 2030. This target, despite seeming daunting, is not as unattainable as it appears. According to Aurora's CFO David Maday, the number is relatively modest when compared to the overall market, with major truck manufacturers producing around 250,000 to 300,000 new trucks each year.
Maday explained that while 30,000 trucks may seem like a large number, it is not unrealistic considering the scale of the truck manufacturing industry. He firmly believes that achieving this vision is within Aurora's reach. However, the market's response to this ambitious plan has been mixed, with Aurora's shares experiencing a decline since the announcement during their annual analyst and investor day on September 23. Despite this, Maday remains optimistic and believes that the "unlock" for Aurora's growth begins in 2027.
Currently, Aurora operates a transportation-as-a-service business model, using a small fleet of around 500 driverless trucks to provide services to customers such as Detmar Logistics, Hirschbach, McLane, and Werner. The company charges customers a fee of about $2 per mile, which includes a fuel surcharge. Maday anticipates a significant shift in their business model in 2027, when they will transition to a driver-as-a-service model.
In this new approach, customers will purchase the self-driving trucks and pay Aurora a per-mile subscription fee for the self-driving technology, estimated at $0.85 per mile. This change will help Aurora offload the costs of the trucks from its balance sheet, making it easier to scale the business.
Aurora expects to achieve breakeven gross margins by mid-2027, with around 500 trucks on the road. The key to achieving this milestone lies in the mass production of third-generation hardware, which will be developed by Aurora's partner, Aumovio (formerly Continental). Aumovio will finance the cost of the hardware kit and provide servicing and repair services for customers.
As Aurora expands its operations beyond a few states in the South to the vast majority of the continental U.S., Maday remains confident that the company's cost structures will improve, leading to substantial growth in gross margins. Eventually, the company plans to enter the robotaxi market, further diversifying its offerings and solidifying its position in the autonomous vehicle industry.
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