After making multiple job cuts in 2022 and 2023, Nuro plans to shift its business strategy to focus on the startup's core self-driving technology rather than owning and operating a fleet of slow-moving roadside delivery robots.
The company said Wednesday it will begin licensing its self-driving car technology to automakers and mobility providers such as ride-hailing and delivery companies.
Nuro was a darling of the AV industry, having raised more than $2 billion from prominent investors, but its previous business model was quickly running out of cash. As the company's founders noted during layoffs last year, the race to deploy commercial delivery comes at a cost, and a focus on developing AI could help Nuro extend the time it takes for unit economics to make sense from 1.5 years to 3.5 years.
Nuro said it will pursue two parallel go-to-market strategies going forward. The first will be similar to Nuro's original offering, offering a complete Level 4 self-driving product, including AV software and hardware, for goods delivery and passenger transportation services. The only difference is that Nuro will no longer build its signature cute delivery vehicles; last year, it suspended a partnership with Chinese EV maker BYD to build its third-generation R3 delivery robot.
The second strategy is to work with OEMs and their parts and service suppliers to build autonomous driving products for consumer vehicles, spanning Level 2 through Level 4 driving systems.
SAE defines Level 4 autonomy as a driving system that can drive itself without human intervention under certain circumstances. Levels 2 and 3 are versions of advanced driving systems that can perform some autonomous driving tasks, but still require a human driver to pay attention and take over driving.
“we, [L4] “What we're most excited about is bringing the full power of L4 technology to personally owned vehicles,” Dave Ferguson, co-founder and president of Nuro, told TechCrunch.
Ferguson told TechCrunch that Nuro is still well-capitalized and doesn't need to raise new capital to fund this transformation.
Nuro has not yet signed any partnership agreements, but it has existing relationships with Uber and Toyota through investor Woven Capital, the venture arm of Toyota subsidiary Woven Planet.
Nuro is not the only company realizing that deploying and operating self-driving cars is like throwing money on a fire, and that offering drivers as a service is more economically viable.
The startup will compete against others in the space, including Britain's Wave, which recently announced a partnership with Uber and also sells its self-driving technology to OEMs, and Mobileye, which works with automakers like Porsche to provide self-driving technology.
Nuro's new business strategy comes just over a month after the California Department of Transportation approved testing of its R3 robot in four Bay Area cities, which also allows Nuro to test the technology at speeds between 25 mph and 45 mph.
At the time, Ferguson told TechCrunch that Nuro had no plans to introduce the R3, and would instead focus on developing and testing its autonomous technology.
Over the past month, Nuro has been teasing its new business strategy beyond product delivery. Last month, the startup announced a “road trip” across 53 U.S. metropolitan areas to gather data to train its AI for urban, suburban and highway driving. In late August, Nuro announced that its fourth-generation Nuro Driver, powered by Nvidia's Drive Thor with Arm Neoverse technology, will enable “L4 AI-first self-driving across multiple vehicle types.”
Nuro announced that over four years, it has completed more than one million autonomous miles, both with and without a safety driver, on public roads in Arizona, Texas and California as part of comprehensive testing and delivery partnerships with Uber Eats, Domino's Pizza and FedEx.
Ferguson said Nuro's self-driving software prioritizes safety through its AI architecture: The AV driver generates all movements through an end-to-end underlying model, while a more traditional robotic system operates in parallel as a backup. The backup system validates every step the AI driver takes in real time to ensure it doesn't violate constraints such as vehicle dynamics limits or road rules.
“It's not a question of if Level 4 autonomy will become widespread, but when,” Nuro co-founder and CEO Jiajun Zhu said in a statement.