The California Department of Transportation this week gave Nuro approval to test its third-generation R3 self-driving delivery vehicles in four Bay Area cities, a positive boost for the self-driving startup that has faced several setbacks and financial difficulties.
The approval allows Nuro to test its driverless delivery vehicles in Mountain View, Palo Alto, Los Altos, and Menlo Park. Nuro's vehicles, which have no seats, windows, steering wheels, or pedals, are designed to transport packages, not passengers. Despite operating on public roads, they look like large sidewalk delivery robots, complete with climate-controlled storage units for storing food.
The upgraded geographic area would make it the third or second-largest fully self-driving vehicle rollout area in the U.S. behind Waymo, co-founder Dave Ferguson told TechCrunch, noting that Cruise may have had a longer rollout period before keeping its vehicles on the ground late last year.
Nuro also has a 10-year commercial agreement with Uber Eats and is conducting tests with third-party vehicles.
Nuro had been teasing the R3 for a few years, but last year decided to pause manufacturing plans that would have seen the company partner with Chinese electric car maker BYD to churn out thousands of vehicles. The startup, once a darling of the AV industry, having raised more than $2 billion from notable investors, was quickly burning through cash. After two rounds of layoffs in the past two years, Nuro restructured its team to focus on getting the autonomy part right, which meant putting vehicle manufacturing and commercial operations on the back burner.
Ferguson told TechCrunch that Nuro doesn't yet have plans to resume large-scale manufacturing or large-scale commercial operations. The company remains focused on testing and validating its new AI architecture, and Ferguson said that approach is starting to pay off.
“We've actually dramatically accelerated the progress of autonomous driving and the timeline around autonomous driving,” Ferguson said. “And it's not just the software, of course, but the hardware, the sensors, the computing that's tied into the autonomous driving software. [Level 4] “setting”
SAE defines Level 4 autonomy as the ability for a vehicle to drive itself without human intervention under certain circumstances.
Ferguson added that Nuro has been testing and validating R3's new hardware and software stack in a fleet of modified Toyota Prius vehicles (about 100, according to a person familiar with the matter) and continues to use those test vehicles to make deliveries for Uber Eats. In 2022, Uber Eats and Nuro began a 10-year commercial partnership.
Despite putting its manufacturing deal with BYD on hold, Nuro managed to acquire several dozen R3s from the EV manufacturer, and in the coming months, Nuro plans to roll out the fleet in the Bay Area and its other market, Houston.
An Uber spokesperson told TechCrunch that the ride-hailing and delivery giant plans to start using R3 for deliveries this fall.
“One of the advantages that R3 offers over R2 is the significantly expanded [operational design domain]”R2 can only go up to 25 mph. R3 can technically go up to 45 mph. We won't be deploying at those speeds from day one, but this will enable L4 full self-driving testing, deployment and even commercialization essentially everywhere except on highways,” Ferguson said.
Advances in AI at both the enterprise and industry levels have spurred Nuro's efforts. Ferguson says that over the past few years, Nuro's approach has evolved to improve performance and efficiency by using one or two very large foundational AI models that perform many tasks in one place — mapping, locating, recognizing, predicting, planning, etc. Nuro then combines this with a traditional system where every task is run through its own AI model, validating the AI in real time.
This not only means that Nuro's R3 can travel faster across more of the Bay Area and Houston, but it also means Nuro is better prepared to scale up when it's ready.
That's unlikely to happen this year, and even if it does, Nuro may have to find a new manufacturing partner because any products BYD makes would likely be subject to steep tariffs. Ferguson said that while tariffs are a potential concern, he is generally happy with BYD as a manufacturing partner.
In the meantime, Nuro remains laser-focused on making sure the technology is right and that it's making the most of Uber Eats deliveries. Ferguson also noted that Nuro is exploring avenues to market beyond autonomous delivery, but declined to provide details.