Aurora Innovation (AUR): Highway Robbery
Initial Disclosure: Funds managed by Bleecker Street are short Aurora Innovation (AUR). Please see the full disclosure at the end of this report.
Aurora is a pre-revenue autonomous trucking company recently worth $12 billion.
Aurora recently completed its “driver-out” milestone, completing a commercial freight route between Dallas and Houston fully autonomously.
While Aurora has called this a “commercialization event”, it really exhibited how far behind the company is on a viable business model, and how unlikely it is that Aurora can scale the way it currently plans to.
Our research revealed that PACCAR, a key Aurora partner and supplier that made the Peterbilt truck that Aurora modified, was apparently not on board with the company removing the safety driver.
A PACCAR representative said, “We will not agree to commercialize anything that is not proven to be super safe. We’re not there yet.”
Aurora claims that it will be able to scale to 10,000+ revenue generating autonomous trucks by the end of 2027, but a senior executive at its other OEM partner, Volvo, told us mass producing trucks in 2027 is out of the question: 2030 is more likely.
Meanwhile, we believe Aurora will need $2-3 billion just to contemplate reaching commercial scale, well north of the ~$750 million Aurora claims to require now.
Aurora also appears unsteady at the top; Aurora Co-Founder Sterling Anderson just left his position as Chief Product Officer, making for three senior executive departures since Aurora’s Analyst Day last year.
Anderson is free to sell his remaining 44.8 mn shares soon after selling down 8 million previously, while CEO Chris Urmson entered into a 10b5-1 plan in March 2025 for up to 5 million AUR shares.
Uber CEO Dara Khosrowshahi left $AUR's board in January. And yesterday, #1 holder Uber announced $1.0bn of 2028 notes secured by & exchangeable into Aurora shares. We think this is a clever way for Uber to start to sell down its outsized equity position. We are short AUR.
Aggressive Targets, Undisclosed Challenges
Aurora Innovation (AUR) is a ~$12 billion autonomous trucking company that just completed its “driver-out” milestone, announced on May 1, 2025. The company pitched this as its “commercialization event”, but we believe it really showed how far behind its timeline Aurora is.
Aurora’s recent Dallas to Houston self-driving trip seems to have been a demonstration of Aurora’s commercial weakness more than its technological strengths. OEM partner PACCAR does not appear to have approved the use of one of its trucks for the ride, and a PACCAR representative said that the self-driving technology is “not there yet”:
PACCAR said in an email:
“PACCAR's Autonomous Vehicle Platform (AVP) is a special version of our trucks that includes redundant safety systems and a HPC platform with API's to connect with robotic driving systems like Aurora's. The AVP is still under development. We will not agree to commercialize anything that is not proven to be super safe. We're not there yet.” (emphasis added)
Volvo is Aurora’s other OEM partner, and its trucks did not even make an appearance in the commercial launch. This absence is significant, as Volvo is Aurora’s only announced path to making its ambitious 10,000+ truck production target for 2027. We believe Volvo’s platform is years behind schedule: a senior Volvo executive told us 2030 was when mass production might first be possible for autonomous trucks:
The senior Volvo executive said:
“For the 2027 [Volvo] product, it's not there yet because now it's already 2025… I think the time window is really about 2030, not 2027.” (emphasis added)
While Aurora is regarded as the leader in autonomous trucking, there is competition hot on their heels: Torc, Kodiak, Waabi, Plus, Gatik, Bot, Nuro, Einride, Applied Intuition, Wayve, and of course, Waymo, which has paused its trucking efforts for now but is an advanced autonomy player. Competitors have nearly equivalent technology but with dramatically lower cost structures, resulting in better, more scalable models. An industry participant said of Aurora: “They are ahead. They have done a very good job, but under the hood, there’s nothing special in their AV (autonomous vehicle) stack.”
Aurora was founded in 2017 with highly regarded technologists from Google and Tesla. Eight years later, having absorbed a large team from Uber’s autonomy project, they have amassed a team of 1,800 people and have accumulated $4.6 billion of losses. With this large team, Aurora is burning $700 million of cash annually. To simply breakeven on its operating expenses, Aurora would need to drive 1.1 billion miles annually (assuming it is getting $0.65 per mile at 100% gross margins). As it stands today, Aurora has amassed 4,000 miles of fully autonomous commercial freight.
The company has been able to develop technology that works in limited conditions and on one route–with more conditions and routes promised soon, although driver out was 18 months behind schedule–the business model is worth the 2021 SPAC paper it was printed on and we consider it nascent at best. Aurora is operating a hub-to-hub solution for pilot customers at the moment, one that requires expensive short-haul drayage to ship loads the first and last mile. While Aurora claims its long-term business model will look like a software company’s, right now it needs to operate and prove that the technology works over several extremely expensive years, with commercialization still years off and uncertain, according to OEM partners and former employees.
Aurora Says It’s About to Hit Primetime: Not so Fast
One industry veteran told us:
“I think the struggle with Aurora is that even if they successfully commercialize, it's going to take a long time to get to scale that product, which comes close to offsetting their cost. So they don't need to survive until launch. They need to survive like 10 years past launch, at which point they maybe will start offsetting their costs…
They're not just going to pop up overnight. They're gonna take time to deploy. And I think that curve, it's not as aggressive as people once thought, and I think it's especially with the method of validation, which they're adopting, the high on roads database validation, it’s hard to scale!” (emphasis added)
Aurora claims it has turned the corner toward scalability. In May 2024, Volvo unveiled an autonomous-capable truck model in conjunction with Aurora, with production to occur at its New River, Virginia plant. In April 2025, Aurora made a roughly 400-mile round-trip self-driving truck run from Dallas to Houston and back. Aurora’s roadmap predicts that rapid geographic expansion, night driving, bad weather capability, direct-to-customer dropoff, decreased human support needs, cheap mass production, and massive customer adoption will lead to profitability in short order on the heels of this milestone. Last week, Aurora said it will take about $750mn to reach breakeven as it produces tens of thousands of trucks in 2027, presumably at Volvo’s Virginia plant. Aurora’s 2024 Analyst Day projected 2 billion Driver-as-a-Service miles in 2028.
History is a good guide. Aurora is already years behind its plan as outlined in its initial SPAC presentation. Aurora was supposed to be operating autonomous trucking on multiple routes and robotaxis by now, but they abandoned robotaxis years ago. The $2.5 billion of capital raised at the time was supposed to get them to launch, but they have since gone back with multiple rounds of dilution ($820 million at $2.77 per share in July 2023 and $420 million at $3.60 per share in August 2024). The fully diluted share count has increased by ~50% over the roughly four years since the SPAC. And the company expects to raise between $650 and $850 million more prior to achieving positive free cash flow, which it anticipates in 2028. We think that number is vastly understated.
Commercial Launch Seems to Raise More Questions than Answers About Scalability, Raises OEM Partner Issues
Aurora appears to have conducted its commercial launch with an unbranded PACCAR truck because it did not have manufacturer endorsement from PACCAR for the run, and because it had no Volvo truck ready to launch. We believe this seeming lack of approval or readiness bodes ill for Aurora’s commercialization efforts with either partner, but especially with the much-touted favorite, Volvo and its Autonomous Solutions division.
Aurora promotional photos from last month’s commercial launch show that Aurora stripped off the branding on the Peterbilt truck, made by PACCAR, used in the ride:
Former senior employees from Aurora and PACCAR stated that Aurora likely took the decision to remove PACCAR logos because there was no working Volvo truck and PACCAR did not okay the self-driving run:
“I think that’s probably because they don’t have a Volvo truck working yet…. If they had a truck that was ready to roll, I think they would have liked that positive attention, given all the press releases they let them do. They probably didn’t have authorization from PACCAR to use it… if they did that [blacked out the logo], that triple-confirms what I said earlier that they don’t have a Volvo ready to go… They had no choice but to use the Peterbilt.
–Former PACCAR Senior Employee
“I won’t be surprised if [PACCAR] says, we told them not to, but they did it anyway… If Peterbilt gave the okay on it and signed off, they [PACCAR] would have been okay sending people out [to attend the launch].”
–Former Aurora Senior Employee A
And as noted above, PACCAR’s investor relations representative stated that as far as PACCAR was concerned, its autonomous trucking platform was “not there yet”.
While PACCAR appears to have a dim view of the progress of Aurora’s technology, Volvo’s absence is even more injurious to Aurora’s announced commercial plans, which prominently feature Volvo and its Autonomous Solutions subsidiary. Volvo’s lack of a showing at the Aurora commercial launch coincides with layoffs at Volvo Autonomous Solutions, which is supposed to operate a fleet of Aurora trucks, and at Volvo’s New River, Virginia truck plant, where both initial and commercial-scale Aurora truck production is slated to occur:
A former Aurora executive was disappointed by Aurora’s apparent inability to show a driverless Volvo truck:
“My estimate is that Volvo did not sign off that the Volvo truck could do even a one-way journey. I’m surprised, and disappointed, and that probably has to do with Volvo… What’s interesting now is what happens to scale… How far is Volvo away from giving the okay?”
“No one can tell how far Volvo is. This is maybe a little bit of an obstacle… I’m certain Volvo, and especially Volvo Autonomous Solutions would have wanted to make a show-and-tell about it… If I was there and this happened, I would have been very disappointed.”
–Former Aurora Senior Employee A
Another former Aurora employee had similar misgivings:
“I don’t know what happened [with the launch]. Volvo as a whole is not doing well in recent years… If Volvo downsized their Autonomous Solutions division, that’s not good news for Aurora. Now if Aurora has only one OEM partner, there’s no leverage [with OEMs]... I feel like this story is a little lame that they put out there.”
–Former Aurora Senior Employee B
As stated above, a senior Volvo executive we spoke to cited 2030 as a possible mass production start, rather than 2027. A former senior Aurora employee described Volvo’s autonomous progress this way:
“The Volvo vehicle at trade shows is more or less a prop vehicle.”
A lack of readiness among Aurora’s OEM partners and/or Aurora itself would haved dire implications for the rapid scaling Aurora projects as a way to stem the cash bleed. Last week, Aurora projected “tens of thousands” of trucks deployed in 2027, presumably to hit the 2028 goal of 2 billion paid miles articulated in the 2024 Analyst Day. This seems to us squarely out of reach, which pushes out Aurora’s profitability goals significantly. Former employees we spoke to shared this view:
“The volume that Aurora can operate now is not large, maybe 10s [of trucks] by end of 2025. Potentially more by 2026, hundreds by 2027. Not much volume.”
–Former Aurora Senior Employee B
“They won’t sell thousands of trucks right away… it’s going to take them til the mid-2030s to break even.”
–Former Aurora Senior Employee C
Aurora Management
While Aurora presents an optimistic face to Wall Street, it appears that the wheels are falling off internally. There have been three key executive departures since Aurora’s last Analyst Day.
Who remains? 1600 expensive engineers led by CEO-founder Chris Urmson - widely respected as a technologist but clearly not one who has spent as much time flushing out what a commercial business for Aurora will look like. And while Urmson is admired, the former CFO of Aurora gave Urmson an overall grade of C+ or B-. “[CEO Urmson] is a strong technical person, background… but less experienced perhaps on the business side of things and tying it all together.” The former CFO was more critical of the rest of management, offering a D grade for the rest of the C-suite and a C grade for the layer below them.
The former CFO explained:
“I think a lot of the earliest employees at Aurora had left. Now, some of that is natural attrition because you do four years, and then you move on to do your own thing, like you start your own company. Some of those people might have felt like, "This wasn't really the company that I signed up for. I think there's been a lot of talent that's left the company and went on to do different things. There's just not that much talent in the world to be able to replace them with. You feel like over time, the talent density has probably gone down across the entire company." (emphasis added)
It’s not just early employees leaving: one of the earliest and most important employees is, too.
Three Senior Aurora Executives Have Left Since 2024; CEO Filed Plan to Sell Shares
Aurora has lost several senior leaders since 2024. Last week, co-founder Sterling Anderson announced his August departure as Chief Product Officer and board member. SVP of Engineering Yanbing Li, who led Aurora’s engineering team, left in August 2024, months after presenting at Aurora’s Analyst Day. And General Counsel Nolan Shenai announced his departure in December 2024, shortly before Uber CEO Dara Khosrowshahi resigned as an Aurora board member.
From left to right: Co-Founder and ex-Chief Product Officer Sterling Anderson; ex-SVP of Engineering Yanbing Li; ex-General Counsel Nolan Shenai
Experts we spoke to believed Anderson’s resignation was notable, but not very surprising:
“I respect Sterling as a leader. He’s very intelligent. That’s a loss for the company.”
–Former Aurora Senior Employee B
“Aurora’s got to go out there with whatever money they’ve got left and try to force the market. I’m not sure I’d stick around [if I were Sterling Anderson].”
–Former PACCAR Senior Employee
Anderson owns 44.8 mn Class A and Class B Aurora shares valued at ~$330 mn, which he will be free to sell soon. Meanwhile, CEO Chris Urmson put in place a 10b5-1 stock sale plan in March that allows him to sell up to 5mn shares by March 2026. We view these departures as additional indicators that the path to scale is nowhere near as self-fulfilling or as quick as Aurora makes it out to be.
Aurora Insiders Aren’t the Only Ones Selling
Other insiders also appear motivated to get out. Aurora’s 2021 SPAC was led by Reinvent Technology Partners, Reid Hoffman and Marc Pincus' vehicle. In November 2024, Hoffman unloaded 11 million shares in the $5 range.
Yesterday, Uber, which is Aurora’s top shareholder, announced it was selling $1.0 bn of notes secured by and exchangeable into Uber’s Aurora shares, which sent shares tumbling. Uber CEO Dara Khosrowshahi also resigned from the AUR board in January. We think this is a clever way to monetize Uber’s significant equity exposure in Aurora amid share volatility and an indication that Uber views Aurora as a trade more than as a long-term partnership.
Aurora Has Persistent Technical Issues that Hinder Scaling
We believe that Aurora’s claims that geographic expansion and feature growth will be much easier from here are not grounded in reality. Former employees we spoke to detailed the challenges that Aurora will face in growing the number of routes, handling inclement weather, lowering support staff requirements, and delivering directly to customer endpoints instead of Aurora terminals. Many of these problems stem from Aurora’s older software stack, according to former employees, while others are industry-wide difficulties that Aurora appears to be underplaying.
Aurora relies heavily on mapping and annotation to ready lanes for autonomous driving, which multiple formers attested is a labor-intensive, last-generation process. According to a former Aurora employee, Aurora is likely not taking advantage of more nimble machine learning techniques like reinforcement learning, causing lane expansion to be slow and heavily manual. This in turn impedes progress and exposes Aurora to competition from on-and-off rivals like Waymo.
“Their technology is going to plateau… They focus on machine learning only for perception and object detection… The only company that is really properly using reinforcement learning is Waymo. They [Aurora] basically have no idea how [the truck] will perform on an unseen route.”
–Former Aurora Senior Employee C
The next lane Aurora is targeting runs from Phoenix to El Paso to Dallas, and it is subject to the same constraints:
“There are critical bottlenecks, first and foremost the mapping of the route. The road is constantly changing, so we cannot really rely on Google Maps or Apple Maps. Data recency for the maps is one of the biggest challenges… it takes time to train new models on new roads. The new road is much longer than Houston to Dallas.”
–Former Aurora Senior Employee C
Aurora’s technological shortcomings become especially clear when handling problems like city driving. In order to give customers the flexibility they want, Aurora trucks will need to be able to drive directly to customers’ endpoints, not Aurora terminals. However, Aurora’s rules-based tech stack is not well equipped to incorporate new city driving tasks, according to former employees:
“This is going to be a very significant undertaking from both sides… There is a lot of collaboration that’s needed and facility modification needed for autonomous trucks to operate effectively inside a warehouse. Then, they need to replicate this modified terminal to whatever number of sites… there’s an investment on both sides.”
“You’re looking at years to develop this capability, and on the autonomous side to navigate on surface streets and also in the terminal, and to formulate a good facility model or footprint that’s suitable for autonomous pickup and dropoff… [Reinforcement learning] is much more useful for surface streets. If you look at San Francisco, the rule-based approach wouldn’t work. As soon as autonomous trucking is moving toward surface streets, they might be needing those technologies.”
–Former Aurora Senior Employee B
“The corridor you operate on is totally mapped, but the edges of the map are totally constrained to the boundaries of the road. For the vehicle, the entire known world is limited to what you’ve mapped. That leads to a constraint where you can never operate outside of what we’ve mapped. That ends up applying to things like curbs and corners that you have to hop to get around a really tight turn. It’s not just a question of technical ability, it’s a question of if it’s the right thing to do, and can you make a convincing argument that it’s the right thing to do.”
“Some part of the process is manual, making corrections to an autogenerated map… there’s all kinds of things like that that pop up in the real world.”
–Former Aurora Senior Employee E
Since each terminal needs to be mapped, this introduces thousands of additional points of complexity with engineers in the loop that AUR has not yet annotated.
“A lot of the mapping stuff that Aurora’s done, that’s on major highways and stuff that’s near major highways. A lot of the distribution centers aren’t always easily accessible. Then you’ve got to deal with a lot more traffic, smaller cars. And the tight turns, getting in and out of those distribution centers. Like in Irving, Texas, Fedex has a fairly large distribution centers. On the map and on roads it doesn’t look like it’s hard to get to, but on the road it’s so busy that they [Aurora] always want to make sure there’s a safety driver in there if something happens.”
–Former Aurora Employee G
“One of the problems with the Texas FedEx terminal that I visited when I was at Aurora is it is very much built for humans… they’re going to have to do some work reconfiguring and making it easier for an autonomous vehicle to land there… One of the hindrances of the autonomy systems today is it can’t back up… that’s one of those features they haven’t built yet. You see humans able to handle those situations better.”
–Former Aurora Senior Employee F
Similar learning issues apply to inclement weather, which introduces logistical challenges on top of technological ones.
“From Dallas to Houston, the weather is quite friendly. Heavy rain has a very limited distribution. Very low temperature days are also limited. Arizona-El Paso or potentially California involve a lot more weather conditions to handle. Storms, a higher incidence of rain. On the road, you could have fog—all of these scenarios would require them to improve their current capability, both on the operation side and the autonomy side. They would need to stop the truck on the side of the road to wait it out. Everybody knows [bad weather is] a problem, but nobody knows how to solve it yet, because it’s irresponsible to assume that we can just park on the side of the road for hours. A human trucker encounters bad weather and they pull into the next truck stop so they don’t pose a threat to other vehicles. For autonomous trucks, it’s the same thing, but it’s hard to do that. How do they find those locations, and are those locations just for autonomous trucks?”
–Former Aurora Senior Employee B
“Snow, maybe even light snow, maybe even light rain to start, fog, things that impair perception are going to provide challenges to a system like this…. It’s going to be some time before any of that is solved.”
–Former Aurora Senior Employee E
And to acquire and keep large customers, Aurora needs to up its reliability to a point where support teams play a negligible role, another challenge Aurora appears to be underplaying. In fact, today, AUR support trucks have to trail its autonomous ones as AUR remains locked in litigation with federal regulators over emergency beacon requirements.
“Removing the driver is important from a cost perspective, but it’s a bit of a vanity metric. Until there’s a confidence level where for every truck you don’t have to deal with it until 20,000 miles in when it blows a tire, you might see more human support.”
–Former Aurora Senior Employee F
“The probability of interventions should be so low that only a few times a year, the Aurora support team needs to go to the middle of nowhere to fix something… There should be an SLA with the customer; they need to have 99.99% uptime with their customer, basically.”
–Former Aurora Senior Employee C
We believe Aurora has to reach much further than it is capable of doing in 2-3 years in order to get high-volume paying customers before it runs out of money.
With Blitzscaling Out of the Question, We Believe Aurora Will Need to Raise Massive Amounts of Capital to Survive
If Aurora misses its mark of tens of thousands of trucks deployed in 2027, which we believe it will by a wide margin, then AUR faces a vastly larger raise than the company has communicated. We believe Aurora will have to dilute shareholders by $2.2 bn to $3.1 bn to make an attempt to scale, rather than the $650-$850 mn communicated on last week’s earnings call.
We base our $2.2 bn base case cash hole calculation on a mid-2030 scale deployment, with burn decreasing progressively from $700 mn per year to $500 mn per year. Our $3.1 bn bear case assumes Aurora cannot scale to net profitability until mid-2032, either because of continued OEM delays or tepid customer uptake, with burn slowing to $400 mn per year.
However, even our bear case does not capture Aurora being leapfrogged by a competitor with a better business model or failing to raise enough cash to make it to scale. While Aurora has an existing lead, the autonomous trucking race is only beginning and it appears that Aurora is likely to end up as a high-cost operator in autonomous trucking.
Competition is Heating Up
Over the past several years, several autonomous trucking competitors have come up, with lower burn, better business models, and a more advanced software stack, including the use of reinforcement learning.
Torc targets a 2027 launch with Daimler, the largest truck OEM with 40% market share. Kodiak is coming public this year with ~$80 million of annual burn. And Waymo, widely regarded by experts as the leader in autonomy, could quickly emerge as top contender if it decided to return to trucking, per former Aurora employees we spoke to.
Aurora Takes To Rehashing Old News from 2018 CES at 2025 CES, Sends Stock Up 50%
“I couldn’t believe it when I saw it. They’ve already announced it!” - Industry veteran
To drum up excitement at the Consumer Electronics Show (CES) in January of this year, Aurora put out a press release announcing a “long-term strategic partnership to deploy driverless trucks at scale” between Aurora, Continental, and N. Aurora would develop the tech, using Nvidia chips, and Continental would begin mass-manufacturing the Aurora Driver beginning in 2027. This news sent Aurora up as much as 50% intraday.
Well, Aurora and Nvidia first announced a partnership at CES 2018, when Aurora was still doing self-driving cars. The announcement stated that Aurora and Nvidia would collaborate to “develop next-generation autonomous vehicle compute platforms.” Basically, it meant the Aurora Drive computer would run with Nvidia chips. At the time, Aurora said it would have cars on the road in “the coming years.”
Over the years, Aurora changed strategy to focus on trucking, but the plan has always been to use Nvidia chips. It’s not as sexy as it might sound: our understanding is that Aurora is simply purchasing pre-made chips that Nvidia built specifically for autonomous vehicles.
“To me, it’s a little bit comical. Anybody that builds autonomous vehicles or robots of any nature, or machine learns anything, is probably using Nvidia chips. I don’t know what the partnership means beyond the fact that they’re using Nvidia hardware and have been all along.”
–Former Aurora Senior Employee E
“I don’t think it’s that unique.”
–Nvidia Employee
The Continental side of the press release was old news as well. Aurora and Continental first signed a strategic partnership agreement all the way back in April 2023.
Aurora appears not to be above stock promotion in its bids to fund cash burn.
Domination? How About Dilution
We believe that Aurora is pinned between aggressive scale plans and massive cash needs. To even try to scale, it will have to raise $2-3 billion, diluting shareholders 20-28%. With not a business model in sight, we are short.
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