After a series of layoffs in 2022 and 2023, Nuro shifted its business strategy to focus more on the startup's core autonomous driving technology rather than owning and operating low-speed, on-road delivery robots.
The company said Wednesday it will license its self-driving car technology to automakers and mobility service providers, including ride-hailing services and delivery companies.
Nuro was the darling of the AV industry, having raised over $2 billion from big-name investors, but its previous business model meant it was quickly burning cash. As the company’s founders said at the time of its layoffs last year, competing for commercial delivery distribution comes with costs, and by focusing on AI development, Nuro could extend its runway from 1.5 years to 3.5 years before unit economics make sense.
Nuro says it will now pursue two parallel go-to-market strategies. The first is similar to Nuro’s original offering: a full Level 4 autonomous product, including AV software and hardware, for goods delivery and passenger transportation services. The only difference is that Nuro will no longer be building the cute delivery vehicles the company is known for. Last year, it ended its partnership with Chinese EV maker BYD to build its third-generation R3 delivery robot.
The second strategy is to work with OEMs and component and service suppliers to build autonomous driving products for consumer vehicles, from Level 2 to Level 4 driving systems.
SAE defines Level 4 autonomy as a driving system that can drive itself without human intervention in certain situations. Levels 2 and 3 are advanced versions of driving systems that can perform some automated driving tasks but still require a human driver to be attentive and take over.
“We think it’s possible to bring (L4) to privately owned vehicles, so the consumer use case for the whole L4 technology is what we’re most excited about,” Dave Ferguson, Nuro’s co-founder and president, told TechCrunch.
Ferguson told TechCrunch that Nuro still has plenty of room to work and doesn't need to raise a new round to fund this business transformation.
Nuro hasn't signed any partnerships yet, 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 that has realized that deploying and operating autonomous vehicles is like throwing money into a fire, and that it is more financially viable to offer drivers as a service.
The startup will compete with others like UK-based Wayve, which recently announced a partnership with Uber to sell autonomous driving technology to OEMs, and Mobileye, which is also working with automakers like Porsche to provide autonomous driving technology.
Nuro’s new business strategy comes just over a month after the California Department of Motor Vehicles granted Nuro permission to test its R3 bots in four Bay Area cities. The permit also allowed Nuro to test its technology at speeds ranging from 25 to 45 miles per hour.
At the time, Ferguson told TechCrunch that Nuro had no plans to deploy R3 and would instead focus on developing and testing autonomous driving technology.
Nuro has been teasing a new business strategy beyond product delivery for the past month. Last month, the startup announced a “road trip” across 53 major U.S. cities to gather data to train its AI for urban, rural, and highway driving. In late August, Nuro posted that its fourth-generation Nuro Driver, powered by Nvidia’s Drive Thor with Arm Neoverse technology, enables “L4 AI-first autonomous driving for a variety of vehicle types.”
Nuro says it has driven more than 1 million miles autonomously on public roads in Arizona, Texas and California, with or without a safety driver behind the wheel, as part of four years of general testing and delivery partnerships with Uber Eats, Domino's and FedEx.
Ferguson said Nuro’s autonomous driving software prioritizes safety through its AI architecture. The AV Driver generates all actions through an end-to-end model, while a more traditional robotic system operates in parallel as a backup. The backup system verifies every step the AI Driver takes in real time to ensure that it does not violate constraints such as the vehicle’s dynamic limits or road rules.
“It’s not a question of if Level 4 autonomous driving will become widespread, it’s a question of when,” Nuro co-founder and CEO Zhu Ja-jun said in a statement.
