The California Department of Motor Vehicles this week approved Nuro to test its third-generation R3 autonomous delivery vehicles in four Bay Area cities, a positive boost for the autonomous delivery vehicle startup despite some setbacks and financial struggles.
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 not designed to carry passengers, but only goods. Despite being operated on public roads, they look like large sidewalk delivery robots, complete with temperature-controlled storage for food.
TechCrunch co-founder Dave Ferguson said the upgraded geographic area would make it the third- or second-largest deployment of fully autonomous vehicles in the U.S., behind Waymo, and noted that Cruise may have had a longer deployment period before it halted operations late last year.
Nuro has a 10-year commercial agreement with Uber Eats to conduct tests with third-party vehicles.
Nuro teased the R3 for a few years, but last year decided to pause its manufacturing push, which had been planned to produce thousands of vehicles in partnership with Chinese electric carmaker BYD. Once the darling of the AV industry after raising more than $2 billion from high-profile investors, the startup was quickly burning through cash. After two layoffs in the past two years, Nuro reorganized its team to focus on getting the autonomous part right, which meant putting vehicle manufacturing and commercial operations on the back burner.
Ferguson told TechCrunch that Nuro has no immediate plans to resume large-scale manufacturing or large-scale commercial operations. The company continues to focus on testing and validating its new AI architecture, and Ferguson says that approach is starting to pay off.
“We’ve actually dramatically accelerated the timeline for autonomy progression and autonomy,” Ferguson said. “So both the software, the hardware, the sensing, the compute that’s tied to the autonomy software in a (Level 4) setting.”
SAE defines Level 4 autonomy as the ability to drive without human intervention in certain situations.
Ferguson added that Nuro has been testing and validating R3’s new hardware and software stack in modified Toyota Prius vehicles (about 100 of them, according to a person familiar with the matter), and has continued to make some deliveries with the test vehicles for Uber Eats. In 2022, Uber Eats and Nuro entered into a 10-year commercial partnership.
Despite the BYD manufacturing deal being put on hold, Nuro still managed to secure a few dozen R3s from the EV manufacturer, which it plans to roll out in the Bay Area and other markets, including Houston, in the coming months.
An Uber spokesperson tells TechCrunch that the ride-sharing and delivery giant will begin using R3 for deliveries this fall.
“One of the advantages that the R3 offers over the R2 is that it can drive over a much larger (operational design domain),” Ferguson said. “The R2 only goes up to 25 miles per hour. The R3 can technically go up to 45 miles per hour. We’re not necessarily going to deploy at that speed on day one, but it allows us to do full Level 4 unmanned testing, deployment, and even commercialization over a much larger area. Basically, everything except highways.”
Improvements in AI at the enterprise and industry level have helped Nuro make that push. Ferguson said that over the past few years, Nuro’s approach has evolved from using one to two very large underlying AI models that perform many tasks in one place—mapping, localization, recognition, prediction, and planning—to improve performance and efficiency. Nuro then combines this with more traditional systems, where all the work is done by the AI models themselves, validating the AI in real time.
Not only does this mean Nuro's R3 can cover the Bay Area and wider Houston area faster, it also provides a foundation for Nuro to expand when it's ready to do so.
That won’t happen this year, and if it does, Nuro may have to find a new manufacturing partner, as any products made by BYD will likely be subject to high tariffs. Ferguson said tariffs are a potential concern, but he said he is generally satisfied with BYD as a manufacturing partner.
In the meantime, Nuro will keep its head down and work to make sure the technology is right and that it’s making the most of Uber Eats deliveries. Ferguson also noted that Nuro is exploring market avenues beyond autonomous delivery, but declined to share specifics.
