Hi, everyone. I'm George Gianarikas, one of Canaccord Genuity's sustainability analysts, and we're incredibly happy, excited to have Aurora with us here. Aurora Innovation from the company is David Maday, CFO, and it's one of our long-term stories, near-term stories that we're incredibly excited about, and we're happy to discuss progress with Dave. Dave, thank you so much for joining us.
Hey, thanks, George. A pleasure to be here.
Maybe let's start. You have a really important date coming up in a couple of months, and so I'm curious if you could please discuss and help us contextualize any existing bottlenecks to commercial launch in April.
Yeah, happy to do that. Maybe if I can, George, maybe just take a few minutes. There might be a few folks who aren't super familiar with Aurora, so maybe let me just hit a quick little bit of an overview on Aurora just to provide some context, and then I'll talk about what we're looking forward to in April, so at Aurora, we're a mission-driven company, and it's really important for us to be that way, and our mission is to deliver the benefits of self-driving technology safely, quickly, and broadly, and everything we do is guided on that. Our core product is the Aurora Driver, and the Aurora Driver is a combination of really cutting-edge hardware, our verifiable AI software, and data services, and we're really building this to be a common core that we can apply in multiple vehicle platforms and multiple use cases.
Our first market is going to be trucking, and that's what we're going to talk about a little bit for April. Why trucking? First, the TAM is enormous. There's a great opportunity with over $1 trillion resulting from more than 200 billion vehicle miles traveled per year. But most importantly, it's because we can deliver tremendous value for our customers and for the freight transportation. Not only safety, but if you look at some of the operational costs, we can drive lower cost of ownership, higher utilization, improved fuel savings, and then by safety and less frequent and less severe incidents, we can drive down insurance costs. So there's tremendous value and opportunity in here.
What makes Aurora tick is really we focus in on what we're great at, which is the Aurora Driver and its technologies, and we utilize a partnership ecosystem with our focus to commercialize at scale, right? So for us, if you think about our partnerships, just some of them, we have OEM partners with Volvo and PACCAR. Together, they represent about 50% of the heavy truck market, and they're helping us develop autonomy-enabled platforms that can be scaled. We have Continental, a leading Tier 1 provider, and really we've done a first-of-its-kind partnership with Continental, and in that, we're allowed to really build at scale something where Continental is going to manufacture, but also support our future hardware kit builds, whether that be in service and maintenance and warranty and even financing of that.
You know, we have a partnership with NVIDIA as well as with Continental, and you know we're going to be able to procure NVIDIA DRIVE Thor system on a chip components which will be integrated into the Aurora Driver hardware, and that's really an essential spot, and we need to make sure we can build enough of those with Continental. So we've made a lot of progress on the partnership front. We're making a lot of progress on the commercial front. You know, we work with some of the best customers out there, really some blue chips like FedEx and Werner and Schneider, Uber Freight, Hirschbach, Volvo Autonomous Solutions, and others. And on here, over the past several years, we've delivered over 9,500 loads with nearly 100% on-time performance. So it's really important to understand what you're going to deliver and practice how you play.
You know, on a regulatory front, our launch market is Texas, and when you know they've said when Aurora is ready to go, they're ready to go, so we're really excited about that. You know, from a financial perspective, we're in a really solid position, right? We exited 2024 with liquidity of about $1.2 billion. We expect that to fund us into the second half of 2026, and then at that point, we're going to continue to work on being opportunistic and future fundraising elements. At commercial launch, we will be starting to recognize revenue, but we expect that to be in the mid-single digits in 2025 because our focus is on the technology promise and unlocking that technology promise.
What I would say is, to more directly to your point, George, what to expect in 2025 and really in April, there isn't a ton to do that we haven't talked about before. If you think about the progress of our technology, it's been really developing well. Our trucks drive really well on the roads today. They drive on our launch lane of Dallas to Houston as well as Fort Worth to El Paso. Both of them, they drive very regularly and autonomy. There are vehicle operators in there for now, but we expect to be able to launch and start our driverless operations in April. We're going to take a prudent kind of crawl, walk, run approach at that point in time.
We'll start off with a single vehicle that's driving or is driverless, I'm sorry, is driverless and delivering loads to our customers on the Dallas to Houston lane. You know, at the same time, we're going to continue to build upon that, and we'll add more and more trucks that are delivering driverless loads on that first lane. Okay, and then we'll focus in on the additional technology unlocks that we're really worried about, which is we'll start off in daytime, then we move to nighttime, we add rain in there, and then we start to add a new lane, so Dallas to Houston being first, followed by Fort Worth to El Paso, then we unlock Phoenix, so 2025 is all about, you know, unlocking the technology promise, and we're going to start here in April.
That's awesome. Talk a little bit about your OEM partnerships. You're clearly very close to Volvo. You did a great CES keynote or Sterling did with them. You also have PACCAR. So for those who don't know, what percentage of total Class 8 U.S. Class 8 sales do those two OEMs comprise, and how close is your relationship with PACCAR as well?
Yeah, so I think our relationship is really close with both of them. Together, the two combined companies represent about 50% of the market for Class 8 trucks, right? We've had longstanding multi-year partnerships with both of them with the purposeful intent of developing fully redundant autonomy-enabled trucks with both of the teams that can be actually built at scale. So if you think about the past several years, we've been using versions, you know, we've been using their trucks today to help support the development, right? We use PACCAR 579s to do a lot of our loads today. We just started to unlock autonomy driverless or autonomy loads with a vehicle operator, but driven in autonomy for Volvo. And that's been a more recent occurrence, and we're starting to build momentum with Volvo. I think if I maybe I'd use Volvo's words to kind of describe it.
I think Volvo recently said in their own words that, you know, together we've built the most powerful partnership in autonomous transport. We feel like it's critical that we have great partners to build and to compete at scale. It's less about like having that first driverless truck. It's a lot more about how do you build a driverless business, and you really need great partners to be able to do that.
Now, there's a big other company that makes trucks in the United States, Daimler. They've decided to go their own path. I'm curious, you know, and we've talked about this in the context of Aurora as well. Like, you know, we recently had, or a few hours ago, had Waabi on a call. They are also in a relationship with Volvo. Are there opportunities for maybe down the road for Aurora to partner with other OEMs in addition to the two that you've already talked about?
Yeah, absolutely. I think if you look at it from our standpoint, right, like we really believe that the Aurora Driver is going to be the must-have technology in this space, and we would like to be able to offer it to all OEMs, and there's nothing that restricts us from doing that. I would also say that, you know, there's some benefits in that, right? Like customers don't like single-source solutions. OEMs don't like single-source solutions. And so I think there's great opportunities, you know, to be successful. And you know, our aspiration is that the Aurora Driver ultimately powers every truck platform. And so, you know, let's see how it goes from here.
We talked earlier about the tomorrow problems. So the today problems, at least for us, are making sure you can get trucks on the road without a driver, knock on wood, that's going to happen in April. The tomorrow problems are making sure this business can scale, right? So you have to launch additional lanes. You have to make sure that your costs scale. How confident are you on those two vectors that you can, number one, launch additional lanes for the country, assuming the regulatory environment allows you to, which it seems like it will? And then second, how confident are you that you can bring both the technology costs down and the operational costs down to become profitable, you know, in 2027 and beyond?
Yeah, it's a great question. I think from a standpoint of scaling, of operating in additional conditions, I think we're going to demonstrate over the course of 2025 that this is something that really is achievable, and it kind of matches like what we've been saying. So again, we're going to start to launch on one lane. We're going to add in night. We're going to add in rain. We're going to add in another lane. We're going to expand to Phoenix. This is all part of our roadmap in 2025. The benefits of, you know, highway, you know, highway driving or predominantly highway driving, I should say, is that the U.S. highway system is pretty self-similar. So you can operate in one lane and kind of have it look very similar to another area.
So we don't expect significant challenges to add new lanes over time and be able to operate on those. And you know, in fact, last quarter, we wanted to take a look and test a little bit of the hypothesis that we feel strongly about, and we looked at expanding to Phoenix. In less than two weeks, we mapped the route. We were operating on that lane in autonomy with the safety driver and getting similar performance to what we were getting on the Fort Worth, El Paso lane. So there are some things that the reason why you just don't roll it out in every lane is you do want to test it, you know, safety guides, everything that we do, right? We want to make sure that there isn't anything in that environment that the system isn't ready and set up and capable for.
We think that the number of instances that the system hasn't been validated for is going to continue to be less and less and less, and it will allow us to continue to expand. We do expect by, you know, the end of 2027, we're operating in mostly half of the U.S. and mostly all of the lower states, you know, with the exception of states that may not be open regulatory-wise right now, and you know, I think that's the scaling aspect, and I think we'll be able to strongly demonstrate that later this year as we launch and as we expand. From a cost perspective, you know, my confidence level on this is pretty high, right? Because we know the enablers. We know where our costs are at. We know the enablers, and we have glide paths in place to see all of them.
So our single biggest cost item that we want to focus in on is our hardware cost. You know, when we launch, we're going to launch on a very purpose-built, small-volume, Aurora-designed and built hardware set. We're moving to our second-generation hardware, which is designed by Aurora, but will be manufactured by Fabrinet in Thailand. What that allows us to do is build at scale with higher quality, reliability, and durability. These hardware kits that we're going to get from Fabrinet are designed to last up to a million miles, right? And so we're going to go from tens of trucks that we can deploy these on to hundreds to thousands of trucks that we can deploy these on. So that's our second generation.
And then even beyond that, our third generation, which is our Continental partnership, where we're able to really have this Hardware- as- a- Service arrangement where we're going to co-design with or co-develop with Continental, but they're going to manufacture, finance, service, warranty the hardware over the life of the program. And they're capable of building tens of thousands of trucks and those tens of thousands or, sorry, tens of thousands of hardware kits that will be installed alongside our customers. And so if you look at that enabler, and that's one of the single biggest ones, we're really solid on where that is. And then some of the other ones, like reducing the need for like remote assistance. We've said before we're going to go from one to few to one to many. We're well on our path towards that.
We know the enablers to get there and the technology unlocks. And again, we're going to continue to focus on these items, but I'm pretty confident that we've identified all of them and we have a glide path for most of them.
I don't want to get too far ahead, but is there an opportunity outside of the United States? I mean, nice warm weather conditions don't only exist in the South here, but in other continents as well. So do you think that that's a medium-term opportunity that you could potentially unlock?
I'd start off by saying like the TAM in the U.S. is $1 trillion and 200 billion vehicle miles traveled. I think there's a tremendous opportunity here, and that is where our focus is. Yeah, of course, we think the need for autonomous trucking isn't unique to the U.S. We think there's opportunities to create tremendous value in other parts of the world. You know, over the course of the next several years, we're going to explore some of those and identify what are the right priorities.
Speaking of tangential opportunities, when the company was founded, when you first went public, you talked a lot about robotaxis. Is that still something on the roadmap that you think about and that you're planning for, you know, later in the decade maybe?
Yeah. I mean, when we started as a company, you know, trucking was still the best use case and the right first entry point, but we didn't have the technology capable that we felt we could safely deploy at the time, and that was our... And you know, then we acquired a company called Blackmore and developed our proprietary FirstLight Lidar. That's what made trucking the obvious first choice. The need for ride-hailing and the need just generally to have self-driving technology help transform the future of all transportation, provide, you know, access to people who may not have it, have safer roads. All those things still hold true in every market.
You know, the challenge in ride-hailing, frankly, is more of an economics piece of it as well because, you know, you need a lower cost structure if you're going to be able to compete at the price points that are necessary to grow the market, which is what you need to do. In the trucking space, you don't really need to grow the market. There's this natural demand that's there with the, you know, and really, you know, the autonomous trucks are going to fill the voids that are left by, you know, drivers who are unavailable to, you know, fill the driver shortage needs that we have today. And the gig economy and ride-hailing, it's more of you got to grow the number of rides. And so I think those two things make it more challenging to start in ride-hailing.
Once we've launched a trucking product and once we're at a profitable level and we're doing a ton of volume, our cost structure drives way down. It's a great opportunity to leapfrog into the, you know, the ride-hailing space, and you need great partners to do that. We have some of the very best that are some of our shareholders in Uber and Toyota. So when it's time, you know, we think we have a tremendous opportunity to take advantage.
Maybe for the last two minutes, Dave, if we could just talk about the competitive environment. We hosted a panel with other companies. I mean, it's a $1 trillion market. Plenty of companies are interested in entering it. I'm curious as to how you view the competitive landscape evolving over the next several years. You mentioned yourself that, you know, most companies will look for a dual source. I mean, that's likely going to happen. How quickly do you think they can get to market based on all the work that you guys have done for a very long time?
Yeah, I think if I was being totally honest, I think right now we think that the landscape has cleared pretty significantly and, you know, we really have an open playing field that's kind of ours to play in and win. You know, at the same time, you know, we don't need to be the only player to be wildly successful. The size is enormous, and you know, maybe there's other players that come in later. I think it's a big challenge. If you look at the track record of some of the folks that have failed and the reasons they've failed, you know, you have to kind of, you know, juxtapose that versus what people are saying is the solution today, right? You know, this is not something that can be done with just a few people. It's a lot of hard work.
But you also see companies carving out specific niches in the space. And I think, you know, there's a great opportunity for that for a lot of companies. So, you know, we think there's a tremendous opportunity. We think the field's pretty clear. But, you know, there's opportunities for others to come play.
That's a great place to stop. Thank you so much for joining us, even with laryngitis. You know, you weren't too intimidating with your raspier voice, but thanks for your time, Dave.
All right. Thanks a lot, George.