Aurora Innovation, Inc. (AUR) September 2026 Capital Markets Day Transcript

I know, I just heard that. Good morning, everyone. I'm Stacey Feit, Vice President of Investor Relations. And on behalf of the entire Aurora team, welcome to our 2026 Analysts in an Investor Day. The last time we got this group together was two and a half years ago. I want to thank everybody in Dallas here who joined us then and who came now to come out to Dallas. We know how much time it takes out of your schedule, and we really appreciate it. And we want to thank everyone online as well. Back two and a half years ago, we were in the process of closing our safety case for commercial launch. Today, we have our second-generation trucks operating driverlessly on the road every day. It has been quite the journey. We have made such tremendous progress and are in such a different place today. And we really want to thank everybody for being on the journey with us this time. We have a really great program set up for you today that will show you how Aurora is driving the inflection in autonomous trucking. As far as our agenda goes, our co-founder and CEO, Chris Urmson, will set the stage for the day. Our president, Osa Fisher, will then detail why our commercial flywheel is accelerating. She will then host a driverless customer panel that brings together executive leadership from some of our customers, including Detmar Logistics, McLean, and Werner, and they will give you their first-hand experience hauling commercial freight with the Aurora driver. From there, Shondor Barna, Senior Vice President of Hardware Products, will outline our multi-platform path to scale. He will then host our partnership ecosystem panel, which will feature partners from our OEMs, our Tier 1 and upfitting partners, including Volvo, Paccar, Amovio, and Rausch. They are going to show you how this all comes together. Next, CFO David Madej will host a fireside chat with one of our key insurance partners, Apollo. We know liability and insurance is top of mind for many of those in the investment community, so I think that will be a really exciting conversation. Dave will then walk you through our path to scaled economics we'll bring the presentation portion to a close with some closing remarks from Chris before opening the Q&A and also note we've built in some brief windows for Q&A during all of the panels in the fireside chat so there should be ample time for questions and then finally for the most exciting part of the day I'm obviously a bit biased but most of our attendees here will have the opportunity to participate in a driverless ride-along on public roads seeing the Aurora driver in action with nobody behind the wheel now before we dive in we have the usual housekeeping item to cover this is the most boring part of the day but you know the drill I need need to quickly read this I need a note that we will be making forward looking statements these statements are based on assumptions and beliefs as of today and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the risk factors and other disclosures in our most recent 10-K and our other filings with the SEC. And our discussion today may also include non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not substitute for or in isolation from our GAAP results.

Now let's get into the fun stuff. enjoy how does the world change this is information can bring a new dignity to mankind two ways let's travel into the future little by little what will we see then all at once change sprouts from ideas once thought impossible addressing collective problems holding back modern society we are about to take off on the highway of tomorrow progress isn't linear it takes resilience and conviction on top of innovation it's going to take someone with a spread of adventure and the biggest leaps don't take shortcuts they're built for the long haul aurora is revolutionizing how goods move ready to strengthen a one trillion dollar u.s market once they found that the idea would work they began to improve it refine it after years of building our foundation our business is ready to scale we've proven that this inflection point was never a matter of if but when and that time is now this world of tomorrow is a world of beauty hell yeah okay

welcome and thank you for joining us i know it's a lot to ask you to come down here to dallas has spent a whole day with us so we really appreciate that we hope this could be worth your time today what i really want is for you to spend to get out of today is to learn a little bit about what we're about aurora a little bit about where we're going and hopefully come away with the same level of excitement that i and we have for the road ahead it's going to be a hell of a few years for us today aurora and the freight industry are at a point of inflection we no longer need to talk about when autonomous trucking is going to happen. We can talk about how it is happening on the road today. The road driver is here now, and we're ready to scale. I like spending time understanding how new technologies kind of came into existence as you look back over history. And in doing that, I've seen this common pattern. Most of the world's most transformative products have something in common. They spend a couple of decades wandering through the wilderness, really kind of trying to figure out how to actually make it work. And then all of a sudden, they look inevitable. For decades after Benz invented the automobile, it really was this novelty for rich people that no one thought had a hope of replacing the horse-drawn carriage. It took 20 years of refinement. It took Henry Ford kind of innovating the assembly line. And then we were able to get to the point where we could start to put a car in every driveway. And boy, did that change the world. It didn't just change how we moved, changed how we lived. It changed the world, the shape of the world we live in. In the shipping industry, Malcolm McLean began experimenting with containerization. And at first, it went nowhere, right? It was opposed. Freight had moved the same way on ships for literally centuries. but 20 years of refinement and this kind of magic moment of product market fit in the Vietnam War suddenly kind of opened the world's eyes to this and all of a sudden it was inevitable it opened the way for new economic hubs and it built the global supply chain that we all rely on today and then finally you know Vint Cerf and his buddies back in 1969 you know connected a few nodes to create the ARPANET. Initially, it was very much a curiosity, right? It was for academics to talk to one another over a network. It took almost 30 years, the revolution in telecommunications, to create a global telecommunication network and the web browser. But ultimately, they created a platform that fundamentally changed not just the way we communicate, but the way we connect and how we do commerce. Cars, cargo, information. The same pattern. Investment for a period of 20 years and then suddenly inevitable. And not coincidentally, these are all the bits of technology that we need to enable what we're doing now. Each of them transformed our world and created immense value. And our technology is on a similar shape of trajectory. 20 years ago, DARPA kick-started automated vehicles with their Grand Challenges, these robot races across the desert. I took part in those early competitions, ultimately leading the team that won the 2007 DARPA Urban Challenge. We looked at what we'd built at the time, and we had big dreams. This was going to be big. It was going to transform the world. We literally had no idea how hard it was going to be, and I can tell you if I probably did, I wouldn't be here talking to you about it today because I would have gone and found basket weaving or something. I then spent seven and a half years leading what's now Waymo. And we made tremendous progress, real strides, but we still weren't ready. It's now been about 20 years since those challenges, and I can tell you we are ready today. Our first product, as you all know, is a road driver for freight. We chose trucking for a bunch of reasons. First and foremost, there's actually a huge need for this technology. The market, the addressable market that we can reach, is gigantic, and we think there's an opportunity for incredible unit economics. The customer decision makers are dispassionate. If we are safe and we can help them bring value and grow their business, they're going to adopt this technology. That is clear. And finally, there's a tremendous amount of existing infrastructure that we can leverage. As someone who's excited about scaling this business and doing that in a capital light way, that's cool. I imagine that's pretty cool for all of you that we don't have to continue to invest heavily to actually scale and grow the business. To have the privilege of serving this market, we have invested heavily. We've been developing our software and AI systems, our verifiable AI system that's on the road today. We've invested in our second and third generation hardware that meet our affordability targets, that meet our robustness targets, that meet our ability to scale. Our OEM strategy means that we can put the Aurora driver on the platforms and vehicles that our customers demand. And our customers are excited for what we've built. And we're seeing that demand accelerating. Our philosophy from day one has been do what we do best in the world and then work with amazing, great companies. I believe and we believe that we will scale faster and deliver more value if we can focus on what we do best and they can lean into their strengths. We are proud of the ecosystem we've built. It contains world-class OEMs, amazing logistics companies, hardware partners. It's awesome, and you'll hear from many of them today. building a connected ecosystem like this is hard it takes time to build the relationships and build trust there's really no shortcut to that but what we are seeing is that with each proof point each example we put on the board our ecosystem is accelerating people looking look at what we are doing want to be part of this they see the benefits to their businesses this is why i believe we're at an inflection point the tech the partners and the customers are all ready it has been a hard journey but the aurora driver is now on the same rapid adoption curve as we've seen with these other technologies in the past today we are the only company operating driverless trucks on the road and scaling not in a pilot not you know with a safety driver behind the wheel but in actual day-in, day-out operation. And this is just the beginning. By the end of the year, we expect to have 200 trucks on the road. A road driver, too, was a huge step forward for us. It allowed us to get our verifiable AI systems out on hardware that was cutting edge, that had both price or cost and scalability and durability that we needed. And it allowed us to deploy the tools and services that will ultimately allow our customers to use this technology in their operations and allow us to scale with them to meet their demand. Now, trucking is a tough business, and it's only getting tougher. Driving is difficult and demanding, and that means that there aren't enough people that want to do this important job. And our policy decisions are actually taking more supply out of the market. People need a rest. That means that these assets have to sit idle, or companies have to do complicated logistical things with slip seat driving or team driving. And driving a truck is dangerous. As a truck driver, you are ten times as likely to die on the job as the average American. 5,000 people are killed in collisions with heavy trucks every year. This is something we can do something about. Fuel, labor, insurance, these are all costs that are increasing. When a customer integrates the Aurora driver into their fleet, we will be able to help them drive all of these down simultaneously. The Aurora driver makes trucking safer. 360 degree perception, validated safety case, millions of tests. This gives us conviction when we put it on the road, it will be the safest best driver out there. The Aurora driver never needs to take a day off and our customers can deploy it where they need it, when they need it, allowing them to meet their customers demands of course the Aurora driver doesn't need to rest allowing trucks to operate 24 7 really creating that opportunity to double utilization and finally all of this drives down the cost of labor fuel and insurance again simultaneously taken together the Aurora driver is nothing short of transformational for these businesses and these business benefits are not hypothetical. We're delivering real-world value with customers today. When you look at the video here on the left, this is the Aurora driver on I-20, bombing along at 70 miles an hour, I think. At this moment, this construction worker decides it's time to go have lunch on the other side of the road. They run across, the Aurora driver sees them, slows down, everybody goes home safe. In our long-haul applications with Werner and McLean, we're seeing trucks running 225,000 miles on an annualized basis. Again, that is double the normal utilization for these assets. And then finally, in our short haul application with Detmar, we're doubling the number of trips per day that they're able to operate. Safety is table stakes. Doubling utilization is a fundamental change in the value we can provide. Now, as I mentioned before, we are fully allocated to exit 2026 with 200 driverless trucks on the road operating for customers on our existing routes. For customers to use the Aurora driver, we need to meet them where they are. That means operating from and to their endpoints. Today, we're live operating driverly for Detmar between the Capital Sands mine and between their distribution point. In the coming weeks and months, you'll see us begin to operate driverly for more customers. Make no mistake, it is clear that the core value that we provide as part of the Aurora driver is operating directly between customer endpoints, and that is the product we're building and deploying. Having had the opportunity to work with customers at their endpoints, it's really given us the ability to improve and optimize the road driver and ensure that it will fit seamlessly into their businesses. And as we head into 2027, we're further expanding the network we're going to be supporting and growing into. It took us six years to develop, validate, and deploy for the first lane. It took us six months for the second lane, and earlier this year, we deployed a lane in six weeks. In the not distant future, it's going to take us days. That's because the Aurora driver is now generalized, and every bit of further generalization we make eases the ability to open new lanes. In parallel, we're continuing to develop the tools that allow us to map, validate, and verify the Aurora driver so we can have confidence that's safe on the road. The combination of these two is not just a linear improvement in how quickly you can open lanes, but an exponential one. Once again, we see this inflection point that means that we will be able to scale and build the business. Now, before I hand off to Osa, I want to take a moment to zoom out. Over the long term, automating freight is going to bolster the U.S. economy. The Aurora driver will make our logistics pipelines safer, more robust, and lower cost. Lower-cost logistics is great. It's going to both help the end consumer, because goods will cost less, we will help fight inflation, but beyond that, through Jevons Paradox, lower-cost freight will mean that there is more demand for freight, which will grow our customers' businesses. And in parallel with that, automating the middle-mile long-haul routes we're going to be focusing on will actually help our partners elevate the role of their logistics professionals, allowing them to focus on being the face of the company in short-haul applications, and importantly, allowing them to sleep in their own beds at night. We're going to help transform this industry. We're starting this flywheel in motion today. Of course, it is not going to happen overnight, but the long-term impact of what we're building is profound. So thank you for being on the journey. Thank you again for taking the time with us today. Hope you find the day informative and useful. Really excited to get you in the truck. And with that, I'm going to hand it over to Osa, our president. Take it away, Osa.

Thanks, Chris. As you can see, it is an incredibly exciting time to be at Aurora. I have the pleasure of spending a good portion of my time with our customers, and their enthusiasm is simply palpable. I thought that before I get into the numbers, I might share a few stories from the road, just so you can get a feel for some of the things that I'm hearing. So last week, I had dinner with the CEO of one of our longstanding customers, And we were talking about S-curves and inflection points, sharing many of the same stories that Chris was just telling you about. And he said that the external factors or market forces that are often required for adoption to move from one part of the curve to the next had already arrived for autonomous trucking. He then went on to say that the decision to adopt AVs was no longer just a smart one. it was now an urgent one. And that sentiment was actually echoed with another CEO of ours who we had the opportunity to introduce to Secretary of Transportation, Sean Duffy. As he was talking to Secretary Duffy, he said this marked a high point in his career. He had never before seen such technological momentum coupled with regulatory acceleration. It's as if the two were working in lockstep with one another. And I'll share one story before I move on. A CEO of ours who might just happen to be in the room with us today was driving on I-20 when up along beside him comes the Aurora driver, hauling his freight and no one behind the wheel. And it was just cool. He said it marked a new level of excitement for him and for me. I share these stories you can understand how fun it is to be at Aurora right now. We are in a materially different spot than when I joined four years ago. And so with that, let's get into a little bit more of the specifics. When customers come to us, what are they asking about? Well, first and foremost, it is always safety. And at this point, most of our customers and frankly, even our prospects have had the opportunity to experience the Aurora driver firsthand. They know that the Aurora driver is one of the safest, most capable, most experienced drivers on the road. But we didn't want to stop there. We engaged third parties to validate how we approach safety. To have sued came and audited our safety management system. They found that we were highly proficient, reliable, thorough. basically we passed with flying colors. We then went to EdgeCase and they did a first-of-its-kind audit of our driverless safety case. They did a rigorous sampling of our facts and evidence and they found that we had reached a whole new standard of transparency when it came to autonomous trucking. After safety, money talks. This is probably the most common conversation that I'm having today. We took ATRI data and looked at total cost of ownership for a traditional driver versus the Aurora driver. The savings are staggering, upwards of 20% or a full 50 cents per mile. Now there's a lot in this slide, but I really want to break it down into three key themes that we keep hearing and talking about. The first is, of course, the driver itself. In this analysis, we compare it against solo driving, which is actually a conservative view. Team driving might be the more comparable approach, but even with solo driving, you see great savings. After the driver, there is fuel. We are regularly seeing 10% fuel efficiency on the lanes we're hauling today, and we see an opportunity of 15% depending on the lane and type of freight. That's quite notable to our customers given diesel prices today and where we expect them to be. The third category is insurance. Dave, our CFO, is going to talk in detail about liability and insurance, so at this point I will just say that a safer driver is a cheaper driver to insure. The great thing about these economics for our customers is it affects both sides of a carrier's P&L. What do I mean by that? Let's take the top line. Our truck is not subject to our service limitations and we don't have a driver that needs to get home. That means we can effectively double the utilization and in turn the revenue for any given truck. Now the bottom line, any carrier will tell you that this is a razor-thin margin business. Every penny counts. Based on the analysis I just showed you on the previous page, there's a ton of opportunity to improve the bottom line as well. But let me make this tangible. We did an analysis. We took our lane, Phoenix, to Fort Worth. We took a single truck, and we mapped it over the course of a year. You see a doubling of revenue and a six-fold increase in margin. That is an incremental $340,000 in revenue and $160,000 in margin per truck per year. Did I mention these conversations are fun? And then beyond that, beyond safety, beyond the economics, we also want to meet our customers where they are. And that's where endpoints come in. Opening up endpoints this year has been a great demand and growth driver for us. But beyond just opening the lanes, we want make sure we're providing the service and support so that our customers can not only start operating with us but they can scale operations with us and with that i'd like to take the conversation just a little bit deeper inviting three of my favorite people industry experts and also aurora customers to the stage please help me welcome matt detmar from detmar logistics eric hildenbrand from mclane and Dara Mahone from Werner. Thank you, gentlemen. So appreciative of you making the trip. And I think we're going to have a really fun conversation here. I'm going to actually start the conversation with Dara. For those of you who were here two and a half years ago, you'll remember that Dara was on this panel with us as well. And I'd like you to think back to that moment and then ahead to today. There's a lot that's happened. You've approved driverless operations with Aurora. Tell us a little bit about the last two and a half years and what gave you the conviction to move forward?

Yeah, so thanks for having me first. I think back to two and a half years ago, it doesn't seem like that long ago. I feel like top of mind back then were three things. First was the tech. Was it there or was it getting there? Second was safety. And third was reliability. And I think I'll put safety first here because in my mind, you know, that's what we eat, sleep every single day at Werner, safety, how safe, how do we drive safety into our fleet, how do we make sure that we maintain that, and we wanted to make sure that you guys could prove a safety case. And I think, you know, I think back to even prior to that, maybe two years before that, the first conversation I had with Sterling and Chris was about safety. So I think you guys have done an excellent job up to that point, but up to this point you've proved your safety case and we feel like you guys are there from a safety perspective now you got to go millions more miles in the road to keep proving it but i think that this point millions of miles in the safety case has been proven and we're very satisfied with that second thing is the tech um like i feel really good with the tech i don't think there's any question anymore in fact we talked about this um internally all the time tech is there we're not worried about the tech uh we have some integration work to do etc but But all of that's relatively easy in comparison to the heavy lift you guys have done to this point. And then the third part for us is reliability. Like, we put these trucks on the road. We have to know they're safe, and we have to know they're reliable. And over the last eight, nine months, whenever it was we approved driverless operations, we haven't – I mean, we've run a lot of miles with you, but in comparison to what we run on a daily basis, it's not really a lot of miles. So the reliability has been there. Again, you've got to run a lot more miles to prove it's there. But we feel really good about where we're at right now. We're still bullish, and I think we're just ready to keep moving forward, you guys.

We really appreciate walking alongside of you on this journey. We've learned a lot from you guys as well. With that, I want to really turn it to Eric and then to Matt. I think Eric McLean's been working with us for two years. What prompted that decision, and where do you see it going from here?

Yeah, I think for us, first, it starts with safety as well. I think that's probably where everyone in the industry is, and we saw an opportunity to have a potentially very safe lever that we could use to grow, right? And that for us was critical. How are we going to manage our growing middle-mile logistics and redistribution operations? Drivers are scarce, as I think we all know, and we need them desperately for our final mile into our customers. And so finding a solution like yours that could help us in that middle mile and deliver the safety, the reliability, and those types of kind of opportunities to put our drivers where we really needed them was why we turned to you.

Yeah, so we've been working with – first of all, thanks for having me. Glad to be here. We've been working with Aurora for about a year now, and it was multiple things that prompted us to look at this and go down this journey. Safety, of course, being a big one. The Permian Basin is an incredibly dangerous place. the roads a lot of traffic a lot of truck traffic at night a lot of people trying to get to these drilling and frack locations to get deliveries on time secondly is operational capacity so you know not only are we in the trucking business but we're also in the oil and gas business so we're in two cyclical industries. So the push for innovation and competition is very high. So as we look at the operational capabilities to be able to double our utilization and continue to look at how we can provide our customers a value-driven approach, when you look at both those things, it made the most sense for us to go down this path.

That's great. I remember the first time I visited in Midland, and there's very little infrastructure there.

And I think you guys have a slightly different use case than the long haul we typically talk about and can you talk sort of a 60 mile loop that we run perpetually tell the audience a little bit about how that works and why autonomy is helpful in that regard yeah and I'll go ahead and kind of explain how you know the oil and gas logistics space works as well because that could give more clarity so as we look at our trucks especially in the sand side and you look at pipe and a lot of other commodities that move in the Permian Basin and in different oil and gas basins sorry Sorry, I just lost my train of thought. But as you look at that, most of the drivers, especially in the Permian Basin, do not live in the Permian Basin. They are coming from a lot of the southeastern United States, different parts of Texas, Oklahoma, New Mexico. So almost all the trucks you see are running sleeper cabs. Day cabs have never really broke out into that market because drivers don't like to come live in man camps. They don't like to switch trucks because, you know, they don't know which driver was driving that truck before. Was the driver smoking in it? Did the driver not report something on his pre-trip or post-trip? So anybody who's really come to try to work the day cab slip seat model to run 24-7, it's never worked out very well. So we run sleeper cabs. So our drivers work, on average, three weeks on, one week off. So when you look at that from a utilization perspective, you know, on the monthly, you're getting 75% utilization. So now go into their hours of service. You know, they're driving about 12 hours a day. Okay, so now you cut that in half. And then you also have their 34-hour reset that comes on top of that as well. So when you look at the utilization of the tractor, you're looking at sub-40%. So with what we've seen with Aurora and our drivers are averaging two, two-and-a-half truck loads per day, getting into the five to six range on the 60-mile loop is fantastic to see from a utilization perspective. So you're taking that 40% to greater than 90, so effectively almost more than doubling the utilization. And then on top of that is the trailer utilization. So as drivers go into their three-week shift, when they go back home, their trailer goes back in the pool. But because the drivers will stage next to the nearest sand mine that they might be picking up from the next day, they're always attached to that trailer for their shift. So now, not only are we doubling the utilization of the tractor, we're also doubling the utilization of the trailer. So that's where we see a lot of the use case and the optimization for the uptime and utilization of the asset.

That's fantastic. And, you know, as we've talked before, it's almost insatiable appetite here because diesel prices and the need for oil is just growing. So it's been really fun to watch and partner with you.

What's going on with diesel prices?

We monitor them occasionally. With that, Dara, you know, you've been in this industry a long time. You've seen a lot of changes, but in particular, I know you've looked at other potential AV trucking partners.

And what caused you to land on aurora is differentiated um i think we'll you know there's a couple of things so first of all the very again i go back to that very first conversation i had with chris and sterling in a tent i believe in in a yard in a drop yard or we're illuminated um and i think that you know the thing that came across most strongly was safety was the first conversation we had and then you guys instinctively got the driver problem right that this is not about replacing drivers and I you know I maybe can I go on with drivers for a bit yeah please like first of all you know the very first job I had after construction when I came to the U.S. 30 something years ago was I got a CDL and I went driving for one of our competitors who I don't think are in this room but I can't mention I'll get fired but the reality is is I am a driver and I did it for a short period of time but I understand drivers I also you know So this makes me sensitive to this conversation, no question. I still actually go ahead and drive a little bit today at times. They get me to test drive trucks every now and again. So I have this connection to drivers, and drivers are the lifeblood of our industry. Our founder, one guy, C.L. Werner, with a truck, instilled that message. And just across the entire company, the drivers are the central part of what we do every day. So we have this connection to drivers. They're not just a guy in a truck or a lady in a truck. They are the lifeblood of our company and of our industry. So the thing that Aurora intuitively got when we talked to them was this is not about replacing drivers. This is not what this is for. This is about taking the jobs that drivers don't want for us and giving them to a different mode of transportation, making drivers' lives better. drivers today want to be home as often as possible they don't want to be on the roads for two or three or four weeks at a time they want to be home nightly or at least every other night so we see this as there's places that we find it hard to hire drivers to do certain middle mile routes that are long lonely roads and we think that that's where this really comes in and the way we look at it internally is it's almost like another mode of transport so we do van we do dedicated we do intermodal we you know we do everything and then driverless becomes another thing that we offer to our customers um but it also helps us fill some of the driver shortage that we're experiencing and have been since there was a driver shortage when i took the job 32 years ago um there is still a driver shortage today and it's getting it's looking better it's getting worse so it helps us fill that but it does not and never will replace drivers we say this all the time if you wanted to become a driver today at Werner, we think you can retire as a driver 30, 35 years from now.

Can I echo that? I think, because our choice for Aurora was very similar. It was about the shared values. I mean, McLean's been around for 130 years, and we care a lot about our culture, which is very driver-focused as well. And so I think between that and safety, like working with you for two years, we feel that our cultures are similar in a way that's very differentiated from some of the other competitors and it's why you know we're very happy to be the partner and for us as I said our drivers have to pull into a 7-eleven parking lot with six other cars there and then take 40,000 pounds off of a truck with a handcart so so they're really critical to us and they're basically our face to the customer and we need them to understand this isn't a replacement this takes you now you're doing that versus having to hopefully drive very long miles or kind of very repetitive routes so we see it the same and I think that's what makes our partnership really valuable to us.

And I would also add that I think you were probably the only one we spoke to ever who didn't think initially that we're going to become truckers, right? Move freight, you know, take so that was a big deal for us and I think all of the others have finally realized that being a trucker is tough, it's complicated it takes years of experience to get there and I don't think you guys ever felt like that was your role in the industry which mattered to us as well.

Yeah, that's actually a great commentary on why we picked driver as a service I think, as Chris alluded to, there's certain things we think we can do better than some. We know there's a lot we can't. And maybe as we talk about driver-as-a-service, you all know that's when our carriers own and operate the trucks. We provide the driving service. But tell me how you're thinking about that, why you're excited about that. Maybe, Matt, I'll start with you, sort of why a transition to DAS would be an inevitable choice for you.

Yeah, so we've been in business for about 15 years now. So we've purchased tractors. We've leased tractors. We've done full maintenance lease programs as well. And what makes the most sense for us, because of the use of the application, it's on the road, but it's also very vocational as well. Sometimes our miles are 10, 15% off-road. So the maintenance aspect of it is incredibly important to us for the uptime of the asset. So as we buy the asset, we like to bring our own maintenance in-house, because that really helps us accelerate the uptime as well. Now, I mean, of course, buying trucks also has its own tax benefits as well. So there is that case as well. But being able to handle the maintenance, bring it in-house, and as we look at scaling it, looking at, you know, because it's going to be a whole different path to revolutionize, and we're actually really, really excited about that as well. So that is one of our biggest drivers going into the DAS model, really.

That's great. Eric, how are you guys thinking about either the DAS evolution or just the next several years at McLean with autonomy?

Yeah, I think similarly. I think we have a lot of infrastructure built to take care of trucks, whether it's our own or we have partners that do it. And so I think that having us be able to use our scale to do that while you do the technology and the thing that makes you special probably makes the most sense. There are also techs and other benefits, as you note. I think as we go into the future, we just see so much opportunity, right? I'm always on the phone with you telling you about my next great idea. She's very polite, by the way.

For fun conversations.

And I'm very excited to kind of expand from the lane we're running now, which has been incredibly successful, to some of these places, you know, that we mentioned about our drivers really don't want to do and are really critical and have this consistent freight running on this lane. And it's always like who wants to do that overnight trip to wherever, right? And we'd love to get that expanded as fast as possible under the model.

That's great. I know we want to spend some time getting questions from the audience, but before we do that, could each of you, maybe starting with Dara, talk me through what does this strategy look like for you over the next three to five years? If you come back two and a half years from now, what are you going to be saying to the audience then?

Yeah, I think for us it really is about, you know, taking, I don't want to say tentative steps, but let's, you know, we've gotten our toe wet now. let's take the next move it's about really proving out like the safety case making sure that we feel you know we are 100 comfortable but let's make sure that we understand all the nuances of it it's about the reliability that i talked about i and i think it's about really exploring what lanes this is best suited to like we have a massive network countrywide um across all 48 states um there are lanes that we already know that this will because we you know we have we have trouble getting drivers or keeping drivers in those lanes so i think there's lanes that we can do it there are there's certainly the the concept of utilization like completely utilizing this massive investment in an asset that we have that you know we maybe get we don't get enough of today or we could get more of so i think we want to explore all of those areas safety reliability the tech and let's see the tech keep moving forward because it's fantastic but but how do we get to the point where i think we start to strip the the cab of these trucks of their creature your comforts and work with you guys and that so that that becomes less expensive even and then i think it's it's really finally about you know how do we fit this into our network and how do we make the best use of it so i think a couple of years from now um hopefully we're much deeper into this and we've got more lanes operating um and we've given our drivers a better life and a better a

better job uh across the board i think that's what we'd like to be well said eric how do you see it what Dara said I really agree I think it's about use cases for us which different use cases can we can we use this in the north when it's snowing right like that kind of technology that keep pushing to find the different use cases so we have more flexibility because that's what we really need yeah for us you know of course we're running the Permian Basin and we are looking at areas beyond but today we're brokering out about 75% of our freight in the Permian Basin by the end of the year, we'll be running about 1,200, 1,300 loads a day, so, and we're seeing the opportunities continue to grow out there for us, so, as we're continuing to prove out the safety case, which everything we've seen has been absolutely phenomenal on the Aurora side for the safety, for the safety aspect, you know, we do expect to get into the hundreds of trucks over the next couple years, so, again, we're still proving out some of the deliveries closer to the well side, which I know we're looking at doing very, very soon, And as we continue to get there, and I don't see anything that's really getting in the way of that, I do expect us to scale pretty significantly with Aurora.

Well, we're looking forward to all the expansion opportunities and continue to work closely together. I do want to open it up for questions from the audience. In the black shirt in the front, please. Oh, there's a... Oh. Oh, sorry. Sorry about that.

Thanks. Thanks. It's Scott Group from MOLF Research. Thanks for doing this panel. I'm guessing you saw the slide earlier showing the total cost of ownership savings. I'm just curious each of your perspectives, what you're seeing, and then maybe, Dara, if you think this is best as a middle-mile application, does that change in any way the savings opportunity? And then maybe just, like, my last question would be, like, when do you think you transition from brokering trucks to Aurora to becoming using Aurora as a driver-as-a-service model?

So on the economics first, we're negotiating, so I'm not going to comment. Like, I think if I had to say the one area that – there's two areas we probably are working on. We are working on right now extensively with Aurora. one is legal just contract work which we'll get through it's all fine and the other is economics and and i will be quite honest that we have a gap we we've got to figure this out um i think the economics become viable at scale i mean really viable at scale where nobody's eating some of the cost um and i don't think that is too far ahead of us um and i think that it's some of them in the next few months we will we will get to a point where we believe that economically we can make this work but there's what to do there um the second part of your question um yeah i think absolutely where we run changes the economics for us changes the viability um for us honestly we believe the long haul route is the best the middle mile where we're running you know five six seven hundred two thousand miles whatever that happens to be the longer we could run um the more Utilization we can get out of the asset the better fuel economy we get once we're running those long hauls When we can run a 22 hours a day or 20 hours a day out of 24 all of that matters Shorter short and end the hall doesn't allow us to do quite that much. So I think The economics will get there, but we we believe we have a gap that we've got to work through I think we'll get through it. I think it comes at scale and then I think yes definitely the lanes we operate in change the financial model.

Robbie, here, sorry, yeah.

George Genarigas from Canaccord Genuity. I'd like to ask about reliability, which you mentioned a few times. Is that something that just proves itself out over time? You just need more miles under your belt? And then second, what particular parts are you focused on from a reliability perspective? Is it the autonomous kit? Is it the redundant systems in the truck?

Maybe Eric can take that as the lawyer on the panel.

I think – I can't believe you outed me in front of all these people. I think that the reliability seems really good right now. We hope to just keep proving that out, right? We're not – we're seeing basically 100 percent – I don't want to say that I can't do it, 99-whatever percent uptime on stuff that's controllable, right? There's the stuff that isn't controllable sometimes on our side too, right, getting the freight where it needs to be. So I think that proves itself out over time. We just need more miles, more trucks running, and you're going to see it. But I have no – I have an expectation that we'll just see that continue to be very positive. I forgot the last part of your question.

Are there any particular parts you're focused on?

You know, I think we're looking at the whole truck and the whole system, right? And I do think it's kind of early to say which parts of the driver system we have to watch. We know what parts of the truck to watch. And I have a feeling, if we can get everyone aligned, that because the truck needs maintenance in such a very specific way, particularly if you can get the utilization that we all want, that fixing or updating or all those things shouldn't actually lead to more downtime, right? Because we should be able to do that while we're doing maintenance is that you have to do on the physical asset.

Thank you. Ravi Shankar, Mogen Stanley. A question for Dara and Eric. You were both very passionate about how you feel about drivers and how you're both going to be a very driver-first organization for a long time to come. Have you had this conversation with your drivers? Is this message resonating? And if not, how long or what do you think you need to build that trust?

For us, yes. We've been very intentional over the last five or six years where we talk about driverless operations at every opportunity. You know, just last week at Driver Appreciation Week, it's a topic that comes up. We get a lot of questions on it. We've been very open with drivers, not hiding anything. But the message is the same. We want drivers to understand that if you want to take a job at Werner today, if you're at Werner today, you're probably going to retire at Werner today if that's what you choose to do. Because, you know, we keep reiterating that message that today, depending on what numbers you take, whether it's from the ata or the dot there's a shortage of anywhere between 100 and 200 000 drivers right now um and that only grows even in aurora and all of the driverless operations trucks most bullish case um we still need a million drivers in the next decade to come into the market so we've been very open about that we've told drivers what we plan to do we've told them that we're doing this slowly methodically and a lot of intention and thought um but they know and and we've certainly talked to them.

You can't hide things from drivers. It's the first thing you learn working for drivers. They have the best communication network you've ever seen in your life. Yeah, we've been completely open about it. I think we have a little advantage over Werner there, which is, again, these guys have to deliver into small stores using hand trucks or liftgates. So they sort of don't, I don't think, have a fear because they know that right now that job is very safe and will be, we think, for the foreseeable future. But, yes, we've been very open about it, and we were ready for pushback, right? And drivers always ask great questions, but I think they actually get a little excited about it, too, and they get the safety point as well. Good drivers want more good drivers on the road, and they sort of view it that way.

Yeah, and I very much resound what he's saying on that. We conduct a weekly driver call with our drivers. I get on and do a fully unscripted Q&A. It does come up often, but as these guys mentioned, drivers are the lifeblood of what we do. None of us would be even sitting on the stage if we didn't have good, capable drivers to help us drive our business forward. So what Eric said is you do see good drivers. They get really excited about it because sometimes your good drivers are running next to drivers that might not be the best drivers. So when they know that you're building a team that's adding more reliability, to the roads, more safety to the roads, you do see the more professional drivers be very excited about this technology.

Hi, David Vernon from Bernstein. Thanks for participating in the panel. Eric and Dara, I guess it sounds like you're talking about a future where the driverless technology is doing the work your drivers don't want to do and is somehow complementary with your existing drivers. But if you're not taking the driver out of the cab, how does that affect the economics of the implementation, the first and last mile cost. When I talk to trucking companies about adoption of this stuff, there seems to be less certainty around what the actual total cost could be because of some of those business model issues around the first mile, the last mile, things like that. Could you talk a little bit about how the economics or your view of the economics of these technologies are affected by the fact that you might still have a driver in the cab?

I think it's different types of freight. I think you said it maybe in a good way, which is like you use intermodal when that makes sense. Do you use drivers when that makes sense? Do you use Aurora when that makes sense? So I think if you looked at the whole company and how it would affect McLean's economics, I don't know that I want to get into that. What I do see is a tremendous amount of value that can be driven TCO-wise on millions upon millions of miles McLean runs today, right? Because I have, because of redistribution and other things, I have to move full truckloads of freight from A to B before that gets broken up or even gets unhooked and then goes into the city and makes all the deliveries. And if I can get, you know, savings on those millions of miles, sure, I'm not getting savings on these other millions of miles. I still need a driver. But that's very beneficial to my economics as a whole.

Yeah, I mean, same answer. I mean, if we have a driver's operation, we wouldn't have a driver in a truck between Houston and Atlanta, for example. And if we're doing that, you know, 100 times a week or whatever the number is, significant savings. But, you know, I think we have to just think about it. The market's growing, right? Retail is growing. retail is our biggest customer so we're going to be moving more freight not less freight over time need more drivers drivers are hard to get so there is a hole that it fills for us just just by nature of the fact that we're growing and then i think it's also important to realize like there's other costs besides just the cost of the driver in a truck like to get a driver in a truck we have to recruit the driver we have to train the driver like all of those costs are are significant as you guys know so i think when you add up all the economics and when we get to a point where we're we're happy with our negotiation and then when this gets to scale like i think that's the and again i don't know if the aurora people will disagree with me here but i think that's the that's the real inflection point for us is when they get to scale and all of a sudden those prices start to drop not just for the truck and the hardware in the truck but you know but the tech and everything that Aurora does becomes more economically viable for us too. So I think the driver out of certain routes helps us. It doesn't eliminate. We still want drivers talking to our customers, so it doesn't eliminate that. We have the similar type to you. We have retail stores that we unload and walk pallets into as well. So we still have those drivers at the final mile points, but middle mile for sure.

I am sure we have to transition. I do want to know, like, on the stuff we run with Aurora, we don't want a driver in the truck. There is no driver in the truck, just to make sure that was clear.

Great. I think we have time for one more for this panel.

Thank you. Good morning, everyone. Andre Shepard from Cantor Fitzgerald. First and foremost, thank you for the Aurora team for putting this day together, and congrats on all the great success. You know, I think the team has done a great job articulating the value proposition, cost savings, higher efficiency, increased safety, of course. I'm curious if we can maybe better understand, like, your aha moment. Like, how long did it take for you to visualize it, understand it, implement it? How long did it take you to convert into a customer? And curious if you can maybe talk about kind of what kind of industry reaction do you expect? Are you the consensus? Are you the outlier? Just curious to kind of understand, like, what really drove it in home for you? Obviously, we talked about the benefits, but was there something specific, and how long did that process take?

Maybe we'll start with Matt, who's the most recent adopter.

I mean, the aha moment is doubling utilization for us, really. And then, again, mentioning the safety case, you know, we're driving down Interstate 20. I don't know if you've ever driven down Interstate 20 between Midland and Odessa, but it's a disaster, and it's a disaster all the time. It's always under construction. There's always accidents. There's always traffic. And since we've deployed this technology with Aurora, which we started at the beginning of this year, right, it's almost been an absolute perfect safety case. So that's an aha moment for us, the ability to double utilization. Customer feedback has been great. There's been a lot of excitement about it, especially right now. You know, I mean, we've seen capacity shortages in the broader freight market over the last 8 to 12 months. Historically, in oil and gas, we run about 8 to 12 months behind. So we're really starting to see the driver crunch right now, a big capacity crunch, which is developing even more excitement from our customers in the industry. So those two moments really being the aha moment for us. And the industry, again, is very excited to look at this. When you look at oil and gas, you know, they've been under significant pressure, right, to get their operation or control. Like, no one wants to boom or bust anymore. Everybody wants to see significant return. So if they can baseload their operations with guaranteed capacity, helping to fix their costs overall long-term brings excitement. So all in all, those have been really the biggest positive things for us and what we've seen.

Multiple aha moments. for me um i don't know if it was aha but when our 20 plus year safety person walked into my office and said okay you can go meet aurora because they had validated that the safety worked you know i could say can i can i go now no you can't tell yet um you know that that was um that was probably a great it was i don't know if it's aha but it was a real fun moment in my office because I thought, okay, we're really going to do this. That was pretty exciting.

Yeah, I think there's multiple for me. I mean, as a tech guy, as a geek, like it was the first time I sat in a row of a truck. Like you go, holy crap. Like, I mean, this really works. And that's been almost how it's been five years ago. So like for me, that was just exciting. It was one of the reasons I came to Werner was just this concept of autonomous trucking and how it would get there. Loved what I saw. So that was a big aha moment for me. This actually really works. And I think the second one was, you know, there was probably multiple throughout the, like the safety case always felt like the hardest one because everybody was struggling with it. And Aurora took a totally different approach to it. And when they finally, we sat down two years ago and went through it in great detail, there was multiple aha moments during that period where, okay, this really is safe. This can work. The tech's there. Safety's there. Now we've just got to work everything else. But I think, in general, it's been a series of aha moments, and it's been fantastic to be involved. Lawyers don't have aha moments.

I was going to say, Eric, I thought it was the first time we met. Well, that's a great note to bring us home on. Thank you all for your partnership and your conviction, and we're really excited to be on this ride with you all. Thank you. And now I'd like to turn it over to our Senior Vice President of Hardware Products, Shondor Barna, who will talk to us about our multi-platform path to scale. Please welcome Shondor.

Thanks, Osu. So when it comes to physical AI, it's hard to be more physical than autonomous trucking. And as with all physical AI, the actual hardware is critical. And frankly, you know, hardware is cool. So, our hardware roadmap and multi-vehicle approach is both deliberate and highly differentiated. We're the only autonomous trucking company with such a deep partnership ecosystem and such a carefully thought-out roadmap, and that is what will enable true industrial scale. Our second-generation hardware kit is currently being produced at our contract manufacturer, Fabronet. Fabronet's a top-tier CM based in Thailand with over $4.5 billion of annual revenue and the 3 million square feet of manufacturing space. This is our 8,500 square foot clean room in Chonburi, Thailand. The ROAR kit was designed with three key objectives. First, meaningful unit cost reduction on the order of 50%. Secondly, increased reliability to a million miles. A million miles drives down the cost per mile. In addition, this has been tested to demanding OEM specifications with a goal of enabling line-side production. And it has the headroom to scale up to 1,500 trucks. It's already on the road, powering driverless operations today, and we're ramping to build over 50 kits per week this year. Once the kit is finished, it heads to our UpFit partner, Roush, in Labone, Michigan. Roush has five decades of excellence in vehicle UpFit. They have extensive experience with autonomous vehicles. we have a 20,000 square foot aurora dedicated facility with a multi-station assembly line the first trucks are already off the line and here in texas today we're establishing capacity to 20 per week beginning next month and 20 per week is a thousand trucks in a year so now let's take a moment to look at what's happening in michigan right now that's pretty fun i i gotta to be honest. I think it was showing off a little bit. So our second generation of hardware is also being installed lineside onto the Volvo V&L autonomous truck at Volvo's New River Valley, Virginia manufacturing facility. Volvo Autonomous Solutions recently announced that we will have driverless operations in the first quarter of next year, and these trucks will be powered by the rower driver. Volvo expects to exit 2027 with 300 driverless trucks, paving the way for industrial scaling in 2028. The second generation hardware supports our initial scaling to over a thousand trucks. But now let's talk about our long-term strategy. We're partnering with Almovio to develop our third generation kit. This will be industrialized automotive grade hardware with tens of thousands enabling tens of thousands of autonomous trucks over time. It is an industry first hardware service structure so our hardware cost is paid per mile. That means no new upfront capital expense for our customers, and it enables an asset-light model for Aurora to support our SaaS-like gross margin strategy objective. And for Immovio, this partnership unlocks a brand-new recurring revenue stream. The incentives are mutually aligned across the entire ecosystem, and everyone benefits the more miles our trucks drive. The start of production is expected in the second half of next year, with material economic benefit in 2028 and beyond. Our third-generation hardware kit will power all of our truck platforms, whether it's UpFit with the International LT Series at Roush or LineSide Install at Volvo and Packard. This multi-platform approach allows for customers' different preferences and perspectives and provides scalable supply. This will position us to meet this market-defining opportunity. Now I'd like to welcome a panel of partners to join me here on stage to talk about the ecosystem we're building together. Please help me welcome Jeremy McLean from Amovio, Noel Unstead from PACCAR, Brad Zetelny from Roush, and Sasko Suclev from Volvo Autonomous Solutions. Thanks, everyone, for joining me. Let's start with you, Brad, from Roush. Roush has dedicated a facility to upfitting Aurora's second-generation hardware onto trucks. Why is this program so important for Roush?

Well, we're a product development company. We're a contract manufacturer, and we have products of our own. So we very much understand the urgency and importance for our customers to get their products to market, you know, as fast as possible and of quality. So it's near and dear to our hearts. And also we have, you know, as a company, 50 years of reputation for delivering for our customers. And we plan to uphold that. So it's a very important program to us.

Great. Sasko, so together with Volvo Trucks, VAS has made remarkable progress towards line-side integration of the Roar driver. What makes the depth and velocity of the Roar relationship unique to you as you execute on your commercial autonomous roadmap?

I mean, it has been a long journey, right? I think the first time we met you guys was 2017 or something in Mountain View. I think at that point in time you were like 20, 30 persons or so. You're a completely different company today. one year later we integrated for the first time the Aurora driver with a Volvo truck a European FH we tested that worked out in a fantastic way and to be honest we felt that we in a way clicked on many aspects with Aurora already from the start safety, we have talked about safety already we both share the same values when it comes to safety, super important the most important topic for autonomous us we we aligned on responsibility splits one one thing that stood out as well was that you you really wanted to or aurora really wanted to do this together with us and uh and not as as the other players and we met all at that point in time where they said more give us the truck and then we'll take care of the rest so it's it's a long-lasting partnership that we value a lot and just to emphasize on the partnership this is not about aurora providing a driver to us and then and we integrate it, or we provide a truck with some CAD files to Aurora to integrate. It is really a joint program. We work side by side in developing and integrating and commercializing the solution. So I think we have built something very, very strong here.

Thanks. Jeremy, so Tier 1 industrialization is super important to get to scale. And we're incredibly proud of the partnership we've built together. Why is this program central to Elmovia's growth strategy, and how do you view this opportunity?

First of all, we're a very new but a very old company. So having spun off from Continental just last year, a year ago, we've got a long legacy, and it's a very long story to Sasko's point, building safety into products at scale. So if you want to, what do we do well? We build safe, reliable products at large scale. And we've been working in ADAS and autonomy for many, many years. This is roughly three decades. We put our first automotive radar sensor into the market in 1999. And I've been working personally on autonomy for many years, and we've been working personally on autonomy for many years. And it was about finding the right point in time. What is the inflection point when it makes sense to bring that expertise, building safe, reliable products at large commercial industrial scale to autonomy. And exactly that moment is here, and the partnership has been running for a couple of years. And I think the interesting thing about that partnership was exactly seeing the need to be able to prove that the technology was ready and was safe and could be deployed, and in parallel making sure that we're ready for that industrial scale. And that's what we've been doing, and the third-generation hardware is back there, and it's exactly that inflection point that makes it exciting for us because that is the next growth opportunity. We typically grow with volumes and there you get a kind of saturated market if you look at ADAS and it's about how do we unlock that next opportunity. You unlock that next opportunity by bringing autonomy to industrial scale. So we're quite excited about it.

Turning to Packard and Noel. The freight industry, as we've heard earlier, continues to face a lot of challenges. What are you hearing from your customers about the prospect and value of autonomy?

Yeah, thank you. And thank you, Sandra, for having me on the panel. You know, the customer panel that was up here earlier did a great job kind of answering this. But I think the big change has been from a focus on the technology to discussions now about the business efficiency opportunities. It's really pivoted with our customers. And there's a huge conversation about just the challenges the industry is facing with the diesel prices, with labor shortages. And they want solutions that are safe, reliable, making sure that they're efficient in their business because really the businesses there and, you know, are successful are making money. So they're shifting to how can they incorporate this technology into their businesses to be more efficient. And at the end of the day, it's not just about our customers. that want this technology, but it's what will it do for them to deliver their customers more reliably, you know, freight on time, meeting their commitments at a scalable option. And so they're very excited about where this can go for them and how they can incorporate it into their business.

All right. Let's go back to you, Brad. A lot of people may not be that familiar with the UPFIT model. Could you walk through how the outfit process works and how we can get to 20 trucks per week?

So we saw a quick two-minute version of it in the drone footage, which is great. It really starts with the, you know, there's eight overall steps that happen. There's many stations in the manufacturing process that you can see. Step one is we receive the vehicle, we inspect it, make sure it meets the specifications, and it's good to proceed to the next step. Once we get into our facility, we wash all the trucks. Our certified technicians then start actually decontenting the trucks, taking the parts off, getting it ready for the hardware system. The third step is the fabrication. So that's when we're drilling holes. We're cutting holes into the body panels in the truck to actually prep it for the hardware install. Simultaneously, we're doing offline subassembly. So a lot of the components that go into the truck, they still require some form of assembly that we do in our facility offline to where we can, it's a lot more efficient and repeatable to do it that way. And then once those sub-assemblies are complete, they move to the main line, which you saw, and they get installed into the vehicle. You know, really the fifth step is the installing of the actual hardware, the autonomous equipment. That's done through our MES system, our manufacturing system. We have, you know, digital work instructions, everything talks to our system, torques, traceability, as those get installed. The sixth kind of step is kind of throughout the entire process, which is in-process quality. So we don't just wait until the end to check to see if we're building what we're supposed to be building. That is built in across the entire process from when that truck arrives at our facility all the way to the end. Throughout that process, we're checking and making sure we're doing what we're supposed to be doing as we go. So the seventh part of the process is the bring-up part. So that's when, you know, the truck is, everything's really installed. That's really to bring the truck up, test the software, make sure everything's fun. It's really a functionality check of everything that was just installed and make sure that's operating properly. And then the final step is the final quality sign-off. So our quality team will go through and check to make sure that everything is completed that's supposed to be completed. There's no open items that need to be addressed. and that the vehicle is 100% ready to go to Aurora.

And how are we doing on getting to 20 a week?

Right on plan, right on plan. So facility is and has been up and running. We're fully staffed. All of our equipment, tools, fixtures, those are all validated up and running. And as of last week, we actually just brought on our second shift operation. So we're building trucks 16 hours per day right now.

Let's go back to you, Noel. So PACCAR is known for being very disciplined and having a very responsible approach to new vehicle introduction. As we work together towards defining the third-generation integration, how do you see the autonomy-ready truck fitting into the advancement of Peterbilt and Kenworth in general?

Yeah, we do have a very disciplined approach to new product development at PACCAR. You know, whether it's new powertrains, it's advanced safety systems, it's connectivity, and now autonomy, we follow very similar processes and that's why it's been a joy really to partner with Aurora to come up with a way that we can have this new technology in line on our Peterbilt and Kenworth products and it's really the reason we're so disciplined in how we approach new technology and integrating new technology into our trucks is because we need to make sure that we're delivering safe proven reliable products to our customers as well as the infrastructure to support them once they leave our facilities. And so it's really the approach that we take in the partnership with Aurora that we're following.

Sasko, so as you go out and engage with major fleet operations about the Volvo Autonomous Solutions offering, how would you characterize that discussion?

I mean, I would say that the discussions we have had or we have with the fleets are going extremely well. We have had an approach where we said early on, Let's not go out and talk to everyone because it creates a lot of expectations. Let's instead join forces with like a handful or five to ten customers that we work extremely tight with in a partnership approach. And we have done that and built sort of the ecosystem, developed the solutions together with them. And now when we have announced that we are launching in quarter one next year, Q1 2027 we are launching by the end of next year we should have 300 plus trucks in operation then we have opened up and talked to more customers and the interest is huge and what is, have in mind when we talk about those numbers, these are purpose built trucks for autonomy with the redundancies in place for the safety critical systems, with the Aurora driver integrated in our manufacturing facility in New River Valley which has been an important thing for us and our manufacturing facility in New River Valley, that's really like the flagship of the Volvo group where all our Volvo trucks are coming out and we have already built the first batches of trucks coming out from the factory and as I said 300 by the end of the year so huge interest, I can share some examples, last week we had a discussion with one of the big fleets that are super interested because today they have problems. They have to turn down business. They don't have drivers. So they really see autonomous as the alternative here so that they can capture that business. Another one, one of the big ones, they said, we want half of the 300 directly. So I would say that the confidence is high that we should be able to allocate those trucks.

Great. So back to you, Jeremy. So under this hardware-as-a-service structure, Amovia's economics are actually tied to operation of the fleet, operation of the kits. How does this mutual incentive shape prioritization and execution at Amovia?

It's really about aligned incentives, and I think that's the important thing. We heard about it earlier in the earlier panel as well. Our traditional business scales with volume, maybe scales with software-defined vehicles and so on. But if you look beyond that and where we stand here with autonomy, it's all about as-a-service business. And we see it scaling in a very different way. It, of course, scales with miles. The value of autonomous trucks especially comes with reliable, safe, reliable, and quality service. And, of course, when we build a model around that, We find other unit economics that help us to recuperate those investments, which is, of course, important. But it also aligns the incentives to make sure that when we design, together with Aurora, that third-generation kit, we design it in a way that it's going to operate over the full life cycle of the vehicle. And then we measure the performance against that target by the way it actually operates in the field. And we get incentivized to design it properly and as well to make sure that it operates properly in exactly that way. So it's driving a different kind of business model for us. We did that on purpose with the vision that that is one of the next frontiers as far as business models in our kind of tier one space as a service business where we build that into the hardware. and we maintain it over its life together with the fleet partners, together with the OEs in a way that generates new value streams and generates value for the end customer, and the end customer in this case is not a consumer but the fleets.

Great. Thanks. Thanks, Jeremy. Actually, at this point, we'd like to open it up to questions. Oh, we've got quite a few. We're going to grab a mic.

Thanks so much. This is Colin Rush from Oppenheimer. This is really for the OEMs. You know, I'm curious about how you're thinking about single-source risk and how you manage that. You know, you talked about discussing with multiple partners, you know, as this industry starts to, you know, take shape and scale. How are you thinking about that risk, managing that, and preparing for the potential for multiple partners from a technology perspective?

So our approach at PACCAR is really to develop the truck as a system. So we call it an AVP, so an autonomous vehicle. platform so that when we can in the future as the need grows we can bring on more partners aurora is obviously the one we're working with right now and then it's really a platform approach for us so that we can grow in the future yeah similar answer from from my side so so we are also developing our our truck our autonomy enabled truck in a in a platform with a platform approach that we call cost so that this is not something that is specific for autonomy it's how we develop all our products.

So COST stands for Common Architecture and Shared Technology. So we developed that, the autonomous truck, according to that. We already have two partners that we are doing this with. So it's the same product, the same platform for several partners. And with this approach, we should be able to bring the autonomy also to different regions because we have other trucks in Europe, for example. So it will make it faster and easier for us to also scale in other regions, on other truck specification, on different brands. We also have both Mack trucks and Renault trucks within the Volvo group.

Thanks. Ravi Shankar, Morgan Sani. Question to Paccar and Volvo. Again, we can debate the timing and the slope of the curve, but it's very clear that the trucking industry is changing. So, I would love to know your internal discussions on what the truck market looks like 10, 20 years from now, who's going to be buying your trucks, how many OEMs, etc. And also, with both Amovio and Aurora moving to a per mile fee to monetize the product, is there any thought on you guys doing that for the truck itself and how that might potentially change your business model over time?

Thank you. I can start. Let's start with the business models. We have been clear from the start that, and this is based on the dialogues we have had with the customers, actually where in the early stages they told us more or less hey guys we work tightly with together with you and we would like to continue to do that we want you to take the full responsibility so we have said that the starting phase we will offer this as a transport as a service basically like what everyone else I would say is doing at this stage and and have in mind that we have been operating in in a commercial setup almost for two years so the first phase is transport as a service. Then we have always said that we are extremely humble to different types of models. And we are already now looking into additional business models where it's more that the customer operates and so on and so on. So we will, of course, follow what will happen in the industry and listen in. So we would be stupid if we go the other direction when everyone wants something else. So that's on the business model. And then the first question was... the industry looks like in 10 years I think we had a capital markets day when was that mid this year where Nils our president talked about that in 5 years or so every 10th truck will be an autonomous truck so it will we will start to see a lot of autonomous trucks going forward, that's what we see Yeah, on the PACCAR side, I mean, I would definitely echo the Volvo view is that we're really partnering with our customers and we want to deliver what our customers want.

So whether that's truck as a service or, you know, per mile kind of approach from a PACLE sense, for example, or if they just want to purchase the vehicle and then work with Aurora separately. We're really open to making sure that our business model is what customers want and deserve. We're not going to push that on them. And so we've been very open in talking with our customers around that. And then on where we see, you know, the industry in 10 years, other than PACCAR obviously growing market share, you know, rapidly. Thank you for laughing. It's going to happen, but thank you for the, you know, recognizing the joke. Other than that, it's really we're going to make sure that we are ready to deliver what customers need and want and grow their business with us because it's really all about partnering with our customers.

Mark Delaney from Goldman Sachs, thank you very much for the time and doing the presentation and panel. A question for Noel and Sasko. You both mentioned you're developing your autonomous trucks as platforms and would consider other technology partners or maybe already are in some instances. Can you just talk a little bit more around your experiences specifically with Aurora and how you see Aurora relative to some of the other competitors? Why are you working with Aurora now and just other things that may stand out from Aurora compared to other technology providers?

Yeah, I think, you know, Packard, as we mentioned, Packard's approach is very disciplined in product development, and so we partnered with Aurora because we see that they also are very disciplined, focused on safety, and that's our number one focus, is we want to make sure that we have safety at the forefront, you know, proven technology, reliability for our customers, and that's why we partnered with Aurora and are working with them to make sure that we have Kenworth and Peterbilt trucks that will support the Aurora driver. um i forgot your second part of your question sorry well i mean we picked aurora for a reason and i think that's probably enough said for for me on the pack our side

yeah i mean i i touched upon it in in one of the previous questions where we we have felt that already from the start that we share a lot of the the values that are important for us uh in terms of safety and and other things so so we click there and then i i again i i mean a partnership is uh it's almost like it's like a marriage so uh you need to find your ways and and we have done that and and built something strong we have not always agreed on everything but we've sorted it out so it's really a joint program joint initiative we work hand in hand now when we're talking about integrating aurora into our manufacturing facility we do that together with aurora so that we really take care of everything it's not always easy discussions but we, in a true partnership way, we solve it. So it is, again, a true partnership that we feel is extremely strong and we value a lot. Then we have other partners. I don't want to go in here and start to compare. But, yeah, we value Aurora a lot in our partnership.

Okay, I think we have time for one more.

Thank you. Ryan Sigdal, Craig Hallam. Maybe this is for everyone just from a capacity standpoint. Brad it's great to hear you guys are on track but we always want more and look to the future so as you think about capacity expansion if demand is there can you ramp faster can you go quicker and then maybe for Sasko and Noel from a OEM assembly line standpoint talk about retooling if the demand is there again what the process is how quickly you can actually ramp volume capacity should there be the demand quicker thank you yeah as mentioned we're completely on plan right now to reach the planned volume that we're talking about.

Our team feels after building, obviously we have many vehicles off the line. We feel very confident, very good in meeting or exceeding that with our current line. And then we always have the option to expand capacity if needed. So we're very flexible on the route side. So if that demand were to increase, we can pretty rapidly grow that operation.

And then on the PACCAR side, we're really, the program that we're working on right now is to really tool and have in place the online installation of AVP. So that's really for as the customer demand grows, we are ready to achieve that.

Yeah, and on our side, the whole program has been driven with scaling and industrialization in mind from day one. So this has not been about producing 10 trucks and go to hit the pilots. It has been with scaling and industrialization in mind. We have in the plan, as we said, 300-plus trucks from our factory next year, and then we want to be able to go to 1,000. So I don't see that that will be the problem to meet from a manufacturing perspective to meet the demand.

I just would address it from the Amovio side as well. There's a plant in New Braunfels, Texas, four and a half hours south of here, which is exactly being ramped up to be prepared to produce that third-generation hardware that's in the back of the room at scale to be ready to hit those volume demands. And I would encourage you all to go in the back and take a look at that third generation of hardware. That is now design complete. It's in design validation, and the product validation runs will happen from the plant in Texas here in the very near future. So it's really exciting to see that we wrap towards scale. That's really an exciting milestone for the industry, for the business, for the partnerships. It's something we're excited about.

Okay. Well, thank you, everyone. I really appreciate your time here. Okay. So now I'll hand it over to our CFO, David Madej. He'll have more to share with you, but starting with the conversation about insurance. So thank you.

Where's the clicker? All right. That was super exciting. Thanks to the panelists for participating. I think when Sasko mentioned we've had our share of arguments, that could be with me, so that's interesting. We've talked a lot from the beginning about safety and the importance of safety, and we're getting strong receptivity from customers, from our OEM partners, and as well from our insurance providers. And so I know it's top of mind to many of you how the insurance and liability pieces can work. So we are going to be joined, if this all works out brilliantly, via a video link from London. We're going to be joined by Chris Moore. So Chris is the chief underwriting officer at Apollo IBOT. This is a syndicate for Lloyd's of London. in, they are one of the recognized leaders in complex specialized technology and mobility They were the first in really leading the way with companies like Uber, Airbnb, and of course, Aurora. Chris has a background in mathematics and machine learning engineering, so he's a hell of a lot smarter than me, but he also understands how to look at potential liabilities through a distinct quantitative lens, and so hopefully here, we're going to be able to be joined by Chris. hey Chris can you hear us yes excellent I'm gonna sit by myself since he's on video and thanks again for joining from London and through his busy schedule so we're gonna I'm gonna have a couple of prepared questions but we got about 15 minutes I want to enable you guys to ask a lot of questions this is for you I'm gonna start though Chris if you can just just tell us a little bit about Apollo and what excites you about the AV industry and then Aurora in particular?

Yeah, I think the company is probably the biggest opportunity faced in the insurance world today. It also comes as a risk for us as an industry in the same way as well. If you think about the U.S. auto insurance market alone, that's about a half a trillion dollars. And if I can see that you're talking about frequency reductions in actions that could be as high as 19.57. So the premium that can be taken out of that market is not, I'm talking about shrinking from 500 to 50 billion. Now, that's the risk assessment. But for us, moving into that risk, I don't want to progress, I don't want to stay from GEICO, so I'd be worried for those guys, But I'm leaning into really deep embedded partnerships with companies like Aurora. And if I can capture that 50 billion results in market, I'll be happy with 20. So it's a huge opportunity for us. And not to mention any of the benefits that come with autonomy, saving lives, getting goods and services to people in America and globally at a more affordable rate. There's loads of those benefits. But, yeah, for us as an insurer, it's so nice to have a partnership where the insurance costs for those companies, specifically trucking. Trucking is a very hard insurance risk. And when you get those partnerships where they reeling in, where insurance is really valuable, that's a really great place for me to work.

Excellent. Great. Now, I know it looks like from here the reception is a little bit good. I know we're going to be continuing to fine-tune it. So if we have some disruptions, we might go to no video and just the audio. All right, let's talk a little bit about from an underwriter's perspective and you being the chief underwriter, how do you evaluate and differentiate risk across different autonomous technology stacks in the marketplace today?

Yeah, sure. So we've been actually insuring autonomous vehicles for over a decade. So we've built up quite a large data set. We've also built a risk assessment framework for autonomy. So we look at what is the use case of the technology? Is it trucking? Is it robotaxi? Is it autonomous drones? We'll have that as a key consideration. Then we'll look at the ODD. So where are we doing the operation themselves? You know, a truck driving up the road in Arizona is very different to a robotaxi operating on the streets of San Francisco. So then we'll start looking at the experience, which, again, autonomy has performed very, very well compared to the human drivers that we insure. And so there's not a huge amount of developed claims data, but we're certainly building up that data set. And the final piece that we look at when we're trying to assess autonomy is all about culture. And it's super important. And if you asked me five, six, seven years ago, that may not have been part of our risk assessment framework. But it's so important about how we collect data, how we're going to look at those expansions, what are we doing from a safety perspective, how are we partnering, how do we get very, very purposeful in how we want to position insurance, because, you know, the US legal system can be a very challenging one from an insurance perspective, and trucking has had a lot of nuclear verdicts. We want to make sure that if there is ever an occurrence or an accident involving an autonomous vehicle, that we are very well prepared for that. And we know exactly how we're going to defend the technology potentially in front of a jury in a court law in America.

All right. Great. I'll ask one more question that's definitely top of mind. We talked a lot about cost structure for the trucking industry. Insurance is obviously a big cost item. When you look at the economics of underwriting autonomous trucks compared to traditional fleets, how do you see the pricing evolving over time as these platforms continue to scale?

Yeah, I think we split up into two key considerations, which would be frequency and severity. So if I deal with frequency, so the number of accidents, the number of collisions, we already have enough developed data that we can really lean into that. And no, we're not at the 90% to 95% that certain mathematical reports have been released, but every year we're seeing that frequency reduction, and we can lean in and price that in. The unknown part is the severity, because we have not seen a large number of claims involving autonomous vehicles hitting courtroom steps. So that is some of the uncertainty. But I would say if I'm insuring a human driver, it's a very linear relationship to the risk. so if you do 10 000 miles in one year my premium is x if you do 20 000 miles i'm pretty much going to charge you double because it's it's a it's it's a linear issue um it's not that for autonomy because every mile driven is slightly better than the mile previously and so you're starting to see a different curve and so with every mile driven you're seeing the price of insurance lower now again that is subject to the u.s legal system and we have seen some difficulties in human driving like the Montgomery Supreme Court case. So for me, leaning into that regulation and legal side is where I'm spending a lot of my effort at the moment. But undoubtedly, in this space, rates for insurance are going down every year.

That's excellent.

All right, well, why don't I, instead of me asking a whole bunch of questions, I'm sure you have a lot, and you usually ask me these questions, so might as well ask somebody that knows more about it than I do. So let's just take some questions from the crowd. And I let Stacey pick, sorry.

Mike Lattimore, Northland Capital. I guess in terms of today's pricing, how do you – what is the price of a, you know, virtual driver versus a human driver with similar frequency severity?

Yeah, good question. It differs – I would say it differs by state, but we're probably slightly above where a human driver is purely on that unknown with the severity. That being said, I think that changes rapidly and by quite a large amount, to be honest. So I think what we're kind of seeing at the moment when I was talking about those rate decreases, you're probably looking in the 15% to 25% range every year. And that doesn't take very long for that to compound and be a really significant factor.

All right.

Other questions? Thanks. That was a very interesting point about you guys already preparing to defend the technology in court against any potential accident. Can you just unpack that a little bit more? You said you've been working with autonomy for over 10 years. When you go to prior technologies, what does that first precedent case look like? And how, obviously there's no circumstances, but how easy does that get over time?

Great question. I think my concern is slightly alleviated. And we can thank our friends in the robo-taxi space for this. I think Uber now making these partnerships with having autonomy on the platform and having human driving on the platform has unlocked a defence for me in that scenario that I haven't been able to rely on before. So the way, and please indulge me, what I would say now is if an autonomous vehicle got into an accident, I imagine a plaintiff's lawyer that's looking for a big nuclear verdict and make big headlines would say something along the lines of if you put a dangerous vehicle on the roads and we need to punish you because you put our community at risk, they scare people and that's how it works. And that we would try to defend that. And what I mean by being proactive is working with the engineering teams and saying, how would we defend the claim? How would we use the sensors? How would we use the cameras, all technology to show what actually happened here and how we try to be the safest possible company in operation? what's brilliant now is because uber have the direct comparison if that happens and they sue uber they'll say well my human drivers get into an accident once every 50 000 miles and the average severity of the injury is x now they can have a direct comparison to say but the autonomous vehicles operating are 90 less likely to get to get into an accident and because of the braking speeds and the reaction times the severity is 50 so i've actually connected you with the safest form of transportation you can't come for me my concern then for the rest of the market you just told me that the safest form of transportation was the av for the money anyway so i think the cost of human driving is just going to keep increasing and the cost of autonomy will keep lowering and then eventually you'll get to an inflection point and say it's just too expensive to allow humans to drive.

And his best part was when it broke up a little bit, but I think you guys got the message. All right. Oh, sorry, David. Hey, David Vernon with Bernstein.

So as you think about the technology being in the cab and having all the information about causal liability being one source of it being cheaper for autonomy versus the actual driver being safer, Like, how do you think of what the technology brings to the table just in terms of being able to say, look, it wasn't the truck's fault. It was somebody else's fault. How do you, like, separate the benefit you get out of that from knowing how much safer the driver actually is?

Yeah, yeah. So it's that dampening severity point again. So I look at that as it's a great discovery tool. I just need to have a playbook that I can use it in a court law where it's as impactful as it should be. You know, there's lots of different jurisdictions. Some jurisdictions may say you're confusing the jury. It's inadmissible. So that's why we have to prepare that playbook. And what I love about the partnership with Helen and her risk team at Aurora is they're having those active conversations before anything's happened. Now, that's someone that has proven to me that they have a safety culture because you don't really talk about things like this unless it really means something and you see the importance. I do think what you touched on with the product itself is there's an argument to say that autonomy has no place to sit in auto liability insurance. There is an argument to say it's a product liability risk, and that comes with a completely different framework for litigation and defense and pricing. So it's a really fascinating time that we're seeing companies like Aurora and partner with insurers that say, hey, we're going to create an insurance product that's not just fit for us. It's fit for our clients and all our stakeholders that we work with.

All right.

We've got time for a few more. Ryan Sigdahl, Craig Allen. How do you think about underwriting different AV technology providers and the due diligence as you think about building that defense case, the safety case, kind of everything that goes in it? And is there a differentiation between Aurora and others and maybe talk through that process? And thanks.

Yeah, it's a great question. I think when I was talking about that risk assessment framework, that culture pillar is really key, and that's kind of where I think your question is sitting. um we won't insure anyone in autonomy unless we meet them in in person have numerous conversations that's a it's quite a long process there's not a 20 50 100 insurers queuing up to write autonomous vehicle risk which i find staggering but that's just me um we have those conversations and that fleshes out whether we have appetite it is a true partnership uh the way that we look at things and there has to be a lot of transparency and a willingness to share information both ways So, yes, I'm receiving information on the exposures that Aurora are operating in, but I'm also sending back trends. I'm sending back, you know, how this is how our pricing model works to the Aurora team so they can see and balance those financials. And I do think the financials will be so compelling to empower the future of autonomy. You can, for me, I find out straight away whether a company is going to be a good partner for us. And we are super selective in who we're going to ensure.

Okay, I think we have time for one more question.

Oh, hey, it's Chris Pierce from Needham. I just want to tie together, you mentioned prices coming down per year, but then you also mentioned you're surprised by the lack of competition in the space. As you get these miles, are you building in a more competitive space and more competitive bidding in that 15% to 20%? Or could we see it come down even more as there's more companies like yourselves that want to insure these drive miles?

Yeah, I think it's a great question. If the market does add in and provide capacity, what I hope for Apollo is obviously we have long-term partnerships and then there'll be an open conversation about what those rates do. We tend to have a renewal retention on our portfolio in the high 90s. I think it's a really difficult one. If you ask me why aren't more insurers jumping into this risk, it is because it's kind of cannibalizing a lot of their business. They have 50 years of developed loss data. Why would they go into an industry and support an industry that's going to potentially completely disrupt the cash cow that they've had for a long time? I'm not in the personal line space, so it doesn't really affect me. So this is why I can lean in to this very exciting space and try to lead it. The capacity will come. You can't ignore the experience. And that's what I love about, again, the data and the transparency. I'm not going to insure someone for 10 years unless I show them how they perform, and we have a very sensible discussion on what margin looks like for both parties.

And I would just add for that, so we treat insurance partners, we use the word partners a lot. They're just like every one of our other partners, whether they're on the customer panel, they're on the OEMs or the tier ones. We're all partners in this together. we will not be successful if we try especially early on just to you know bid out to the cheapest person we really believe in select folks that believe in the technology apollo is a leader in this technology they believe it they have a substantial uh they carry a lot of insurance for us and they will in the future but of course you know as new competition comes in it keeps them on us but more than anything else they're looking to actually increase their level of exposure into us. So I think it's a healthy relationship that we have. All right, Chris, I'm going to let you go. Thank you very much for the session and shedding some light into insurance because you're a lot better at it than I am. Okay, we're almost to the end run. Almost time to drive trucks, which is going to be way more exciting. But I've got to tell you, this has been a great event. I'm so excited. The ability to not only tell our story and talk about this commercial inflection point, but also listen to so many of the people that are helping us get here, and their excitement and this aligned vision is what keeps us all excited. But I know we're also excited about the financials, and you all want to hear about them. So we'll talk a little bit about our path, scaled economics and long-term value creation and of course uh our press release went out this morning so a lot of you saw the the punch line at the end uh but we'll we'll build you into it okay it's important to start off again with the market opportunity and we talked about this uh multiple times the u.s is a trillion dollar market based on 200 billion vehicle miles traveled and And this is a place where we can have an opportunity for unmatched value creation with autonomy. We really can help influence this on a lot of levels. For us, the market has very attractive unit economics. And as Chris Osa and a lot of the panel members talked about, it resonates. They can see the value in the technology. In the near term, our focus, as you can see, is a $60 billion vehicle mile traveled market by 2028. For context, we're about $4 billion today. So we're going to be operating in a much bigger place. Even at a very reasonable single-digit percentage market share, that represents more than a billion dollars of revenue opportunity for Aurora. So it's a great opportunity. so it's also important for us to remember what we've accomplished thus far we always want to reflect on a road map are we delivering to the things that we said you've heard multiple times right that we are the only company operating drivers on public roads today in trucking we've surpassed 500 000 miles and this isn't just like demos these are commercial miles with all the commercial pains and challenges that trucking experiences today we are fully allocated to exit 2026 with 200 driverless trucks which would represent a 80 million revenue run rate on our transportation as a service fleet and as a reminder that's where we own and operate the trucks on behalf of our customers and as shondor outlined we're building the capacity with our upfit center at roush to to achieve more than a thousand trucks so we're really on a good path this is what we're delivering today we really believe we're hitting this commercial inflection point at the end of this year and it really is going to be the key to our growth trajectory in 2027 and beyond right for us in 2027 das is our business model that's our driver's and service business model that's the one that you heard a lot of earlier today that's the one that the customers would like to uh uh own and operate uh the trucks and and they like that because they can deliver real value they can maximize the value of the transportation as a service or the driver's service business by the end of 2027 we will have also launched our imovio hardware as a service partnership this is our asset light das framework this is the one that allows us to build tens of thousands of trucks and this is where we believe we will surpass 30,000 trucks in 2030 now to to really understand the financial trajectory let's just make sure we understand the two models our transportation as a service model is our customer adoption model that's the that's where we are today we've talked about the ownership we expect to get uh roughly 200 000 miles per truck on average per year pricing is roughly two dollars per mile uh including fuel surcharge, on average. It varies by lane. It varies by customer. This is a great customer adoption model, but it is also capital-intensive, and we are going to our driver-as-a-service asset-light business model. So we are going to limit this fleet to roughly 500 trucks. We then shift to our driver-as-a-service business model. That's where all the growth will occur. We also expect, because the actual customers are owning and operating the trucks, they are able to maximize through their network optimization the miles per truck and we expect the actual miles per truck to increase closer to 250 000 miles per year the revenue drops down from the two dollars to 85 cents plus per mile um that's natural right as osa pointed out in the cost comparison now we're just focused on replacing the driver cost and not the overall cost this still allows us to have high margin potential for the business and so we're uh and we think it's a we think it's a great strategy we we know that's what the customers want to have and so that's what we've been building for the last several years now if i look out to the next four years we project rapid top line revenue growth and margin expansion starting in 2027 we expect it end the year at over a thousand trucks that will represent roughly 200 million dollars in revenue for the year. We also expect to achieve positive gross profit. Now our target to achieve positive gross profit on a run rate basis is in the first half of 2027. Now this this target slightly moved from where we were at the where we were talking about the end of this year and that's really just reflecting a slightly slower fleet ramp. All the revenue enablers and all the cost reduction enablers, including the labor and support scale efficiencies, delivering to customer endpoints, and even really getting the full benefit of our hardware set are in place. So we're excited. We're on a path to achieve positive gross margin. If you look at 2028, we again believe that we will achieve positive free cash flow on a run rate basis in 2028. Now, we expect to achieve this with roughly 7,500 trucks operating on the road. Then if you look into the future, and again, our target's going into the future, we really do expect rapid growth. We'll have the full benefit of everything that we put in, our DAS business model, our Immovio partnership, being able to operate everywhere and so we expect five billion dollars of revenue and we expect to exceed 60 percent gross margin really on our pathway to get to 70 gross margin so with this rapid revenue expansion we do expect to that we would deliver you know compelling return on operating expenses and capital efficiency and that's really important we have spent a significant amount of money getting to this leadership position putting ourselves in a position to be at this commercial inflection point and we we are going to continue to spend money to accelerate our lead and grow the top-line revenue so from an from an R&D perspective we expect to continue R&D roughly where it's at today I would say adjusting for inflation of course but like we are going to continue to invest in our leadership position if you look in the future that means that an The R&D dollar is generating $7 revenue in the future. And it's only going to get better, right? We really think this is going to get to, I think, 12% to 14% is really industry-leading at that point. And so we're well on our path to get there. If you look at capital expenditures, for 2027, we expect to spend about $185 million. This number is largely comprised of two factors. number one building out the rest of our transportation as a service fleet so buying more trucks and getting them on the roads and the second thing is buying the remainder of the second generation hardware kits that we're going to put on the road before we go to the imovio business model if you look at 2028 we expect our capital expenditures to drop to below 50 million and on a go forward basis capex as a as a percentage of revenue is going to be less than one percent We will be fully in our driver-as-a-service business model. Okay, and then the last thing is SG&A. We are going to increase spending to achieve the commercial growth that we're targeting. We're establishing a target of roughly 7% SG&A as a percent of revenue out in 2030, and we'll continue to monitor that each and every year. This is really set up so that we can scale the business in the long term. 30,000 trucks is a lot of trucks. You need a lot of support to be able to do that. All right. So let's close it out where Chris began. Right. We are we're extremely excited about the industrialization of the Aurora driver. Right. If you look at 2030, we expect to be operating in one hundred and fifty billion VMT market. Remember, the total market's about 200. We expect to be operating almost everywhere. We're going to deliver more than $5 billion in revenue, more than 30,000 trucks, exceeding 60% gross margin, and having high return on our R&D spend. And this is just the U.S. trucking market, right? We're going to be able to take opportunities to go to global markets and additional adjacent applications. And so this is just the beginning for us. So this is a compelling business just for the U.S. Honestly, Aurora is driving the commercial inflection point in autonomous freight today. And we are exceptionally well positioned to maintain our leadership position. I can say that. I know you asked others what they thought. We really truly feel we are in a leadership position. We're taking advantage of all of the investments we've made, and we're really at that commercial inflection point. We also believe that we're well-positioned to generate tremendous long-term shareholder value for our investors. So with that, I'll ask Chris to come back on stage and bring us home.

Cool. Thank you, Dave. If you talk to Dave, the next few years are going to be tremendous. If you talk to Osa, the next few years are going to be fun. If you talk to me, they're going to be exciting. One thing is clear. The pieces are in place. We are on the road, operating day in, day out, commercially, driverlessly, for our customers. And the thing to remember is trucking in the U.S. is only the beginning. You can count on the fact that we're going to take the show on the road and go and deploy this to global markets and expand in that direction. But it's also important to remember that the foundational investments we've made in building safety-critical, verifiable AI sets us up to go and take on other exciting commercial applications. You can think about wherever a vehicle needs to be guided to operate safely through the world, that's a place where you're going to find Aurora. Transforming trucking is really just the first step in delivering the benefits of self-driving technology safely, quickly, and broadly. With that, I want to say thank you again for spending your valuable time with us today. I'm going to welcome the executive team up on the stage here so we can answer the questions you haven't got to ask yet today. So maybe you guys want to join us up here? I don't know why I'm clapping. Felt the moment.

Because you're so damn excited.

I'm so damn excited. It's going to be fun and tremendous.

Great, thanks. Ravi, Shaka, Morgan Stanley. Thank you for the presentation today. Maybe one for David, one for Chris. David, can you give us some level of detail on how you got to the 30,000 target number, kind of top down, bottom up, et cetera?

And Chris, I liked your and one more thing video at the very end. markets when do you start thinking about those when do we start talking about this thank you okay it's a little bit of both right so we have a top-down vision of where we expect to go to and that's largely based on macroeconomic factors like 30,000 trucks does sound like a lot to some people but when you look at the market there's over 2 million trucks operating on the roads today they build over 250,000 trucks every year so I know it seems like a lot and it will be there's a lot of research out there that says the trucking market autonomous trucking markets can be 10% of the market so there's a little bit of that but we always have to balance that with our plans so we look at both the supply side what do we have you know relative to our hardware set working with the Movio team working with our OEM partners where are we gonna build how much can we build what what do we think is the desired and reasonable capacity each year and we balance that with OSA and the business development side to understand where do we think the customers are going and and again we look at it from a VMT perspective as well so if you if you think about a hundred and fifty billion VMT that you can operate in 30,000 trucks and you do the do the math it's like it's not that much of a market share hit gain so I think we're we're appropriately conservative in some ways but we want to also put a vision out there that like this this is we really are at the inflection point some of the biggest challenges we've faced in the past is is the technology going to be there will customers be ready can we ensure it you know can we build it I mean all those things have been answered and now we Just are going to go and execute it and deliver the value that doesn't mean that there's not a ton of hard work That has to be done, but the doubt about whether it could happen I think has been erased and so now it's about taking advantage and getting to that true commercial inflection.

Yeah And on the other on the other domains, so So, first of all, as Dave has made the case, if all we do is deliver the market leader in trucking, I'm going to be pretty damn satisfied. And I think for everyone here, we'll make a hell of a lot of money for you and your clients and would be proud to do that. At the same time, we're ambitious and we have a lead and we have a capability that no one else can replicate right now. and so we are starting in a very lightweight way to assess where's the right opportunity to go and apply this technology yet you know this is not taking our eye off the ball on the core business because we have to really get that established and build it and shame on me and shame on us if we let that slip so there's no effort to take the foot off the gas in any way in that space but we are starting to think okay you know the gen 3 hardware is in validation at this point right where do we want to go apply next where are the markets what are the opportunities and so we're starting to think about it you'll start to see more over the next couple years my expectation thank you I Ryan Sigdahl Craig Hallam Dave maybe first gross margin 60% in 2030 or previously at 70% 2028 maybe talk through the puts takes on the change there.

And then Chris, just on the last point, are those all AI creations or is any of that actually real products that were shown?

That today is AI creation. Yes.

Yeah, I think when we did it two years ago, I think our target is still to get to about 70%. I think we're going to be above 60%. We put a little bit of a hedge in there in terms of that, just understanding kind of the business a little bit stronger than what we than what we did before right I would say though that it's probably reasonably conservative as well and I thought it was appropriate to set it at that mark there is no reason we can't deliver outstanding gross margins and in reach 70% but you know there's some uncertainties out there of things that we have to do and frankly there's a there's been a lot of supply chain headwinds as well that we're accounting for and addressing so uh you know it's just appropriately conservative i think at this point it's also by the way uh somebody asked a question earlier and and at 60 at 5 billion

where our free cash flow looks awesome or tremendous i guess mark delaney with uh goldman uh well first in terms of the exciting and fun uh i'm very interested and excited to do the actually on-road uh demos this afternoon and remembering a couple years ago your last investor day was on your closed course in Pittsburgh. So really exciting to see the progress and actually get to participate in that. So thanks to all of you for allowing us to do that later. Quick question for Dave on the financials. Maybe talk a little bit more on the 27 topics you're starting to lay out. So you talked about exiting this year 200 trucks over a thousand. Should we think about a kind of a back half-weighted 27 when a Mobio comes on or more linear?

And in terms of some of the the capex numbers you shared are those um numbers that you think maybe you can offset if you find financing and partnership options or is that a pretty firm expectation at this point around cash out from aurora next year thanks uh two two really good uh questions i i think on the first uh it will be a little bit more linear uh next year we really have the installed capacity in place to build a thousand trucks so 20 per week so i think this year it it was really about getting to that capacity and that's why it was back and loaded we're just going to build upon that over time so i think the numbers are going to consistently get higher but it's going to be more of a linear trend than a back weighted so and with regard to the capex you're exactly right we did identify it as capex i we have looked at you know the cost of equity the cost of capital we've looked at various financing options right now I think I'm leaning more towards just purchasing them and and and calling a capex but that doesn't mean we aren't evaluating other options as well it's just I think that is probably the more likely option at this point in time George generics here from Canada Corge annuity just a couple of clarifying questions for Dave and sorry I missed some of this stuff but I just found out My water heater broke, so I'm a little bit thrown off.

So maybe on 2027 guidance, you mentioned you'd be exiting with 1,000 trucks. I'm assuming that's both DAS and TAS. And you capped TAS, I think, at 500. And Volvo just told us it'll be at 300. So I'm assuming that's an inclusive number that may include other OEM trucks as well. Is that an accurate conclusion?

So we're going to be greater than 1,000. we'll give like and this is our targets we'll give you your guidance like we would normally do after earnings and after the Q4 earnings but yes we'll be over a thousand trucks it's a combination of our international upfit which can be both TAS and DAS as well as it'll be Volvo and in Volvo's case we would consider them more DAS because they're owning and operating it we're not doing the owning operating so anything that was in Volvo we would probably consider under the DAS. We will definitely have more DAS trucks operating than TAS trucks by the end of next year, or at least that's our expectation.

Just a couple more clarifying. I'm sorry. That's why we're here. The 4%, I think, SG&A guidance long-term. 7%. Okay, good. The 7x and then the R&D efficiency. What does that mean? Can we help us translate?

Yeah, so for every R&D dollar, we're going to be generating at least $7 in revenue. And then like if we've done some benchmarking and some of the very best are at about 12. And so a lot of people talk about our R&D investments and what we're making. We firmly believe this is what separates us from everybody else. Like everybody talks about doing a tech stack and the things, but like there's a lot to this building that amazing architecture back building our services platform to be able to make sure we operate we want to continue to invest in that and so the way we look at is everybody says yeah it's really high today versus the revenue sure and and for short years we're going to be generating seven dollars for every R&D dollar and beyond that we're going to be achieving twelve fourteen dollars for every R&D dollar and that is actually some of the benchmarking that's some of the industry leaders okay and then last clarifying point, the 2030 guidance, it implies at least a run rate, I think, of close to 7 billion

miles, and your revenue guidance is for 5 billion. I know these are sort of approximations, but that's about 75 cents. Is there maybe room for upside to that? Because you talked about 80. There's a little bit of upside, for sure. Thank you.

Good afternoon, everyone. Andre Shepard from Cantor Fitzgerald. Again, first of all, once again, congratulations on all the great accomplishments and successes. I guess the first clarifying question is, Dave, can we say we're now in the walking phase? We've gone from the crawling phase to the, or are we in a light jog? I'm just curious if you can explain kind of where we are. I think we're in the tremendous phase.

We've certainly stretched, and we're starting to jog, I think.

I guess my other two quick questions are, first is I wonder if you can maybe expand on, you know, What are some other use cases in verticals, perhaps industries, that we haven't talked about today that you could see as being a great solution for, whether it's military defense, whether it's international markets? I'm curious to get your take there. And then maybe the second part of the question, I was just wondering if you could maybe give us an update on your relationship or partnership with Uber. There's been some conversations there, so just curious if you could maybe give us their perspective.

Yeah. So certainly first, let's talk international and the markets. When we look at it globally, the U.S. is clearly, outside of China, the largest possible market, and so we want to make sure we win here. China, we think, is basically off-limits for as far out as I can imagine. Next, places like Japan and Korea are particularly interesting because the cost of labor is high, and with the population dynamics, the need and the amount of logistics or freight logistics to have that move by truck is large and so they seem like very interesting markets. There are also long lead time markets. There's a lot of engagement. You have to have partners. The good news is in both of those countries, we have longstanding relationships, whether it's with Toyota or Hyundai that may ultimately be helpful in building entry there. The Gulf region is also interesting, right? They want to be technology-leading. They have a large non-immigrant workforce. The challenge there is one of labor cost. And so as the capital allocator, do I want to put a truck on the road in the U.S. where I can generate this much revenue, or do I put it on the road in Saudi or somewhere where I can generate a fraction of that? And so we have conversations globally about what are the incentives and how would you align interests so that that becomes something that meets their objectives and meets our economic objectives for deploying the technology. So those are kind of globally. Adjacent markets, there's clearly opportunities in nearby logistics. So moving from Class 8 to Class 6, Class 6, 7. You know, trucks. Glad that worked. I'm going to be a legend. uh you know we think we see that as just a very clear obvious next step robotaxi is interesting but it's a much different and i think harder business is a lot more uh capital investment that you have to make to scale and we really like the idea of working with partners who have those capital and have already made that investment and we can leverage it so we'll continue to you know pay attention to robotex you figure out when the right entry point is there um off highway uh my you know altar trucks that's another place where you know there's already significant capital that's been invested we can help those companies accelerate and you know improve their economics so you know and but but like I said what we have built is a competence to deliver safety critical physical AI systems and so anywhere something drives anywhere something moves we can go help with that we just need to be disciplined and when we start to invest in that on the uber relationship uber is great right dar was a board member continue to have tight relationship with him they have a business objective that they've been clear about which is creating a competition in the AV robotaxi space and they've been clear for some time about the need to take capital and recirculate from us into funding that kind of defensive measure for their business. So we've seen this coming. I actually think it's a great thing, right? This was a large concentrated position from a holder that had no intent to hold it long-term. And so it's been an overhang in the stock. And so the fact that those shares have recirculated to folks who we expect will want to hold it for the long-term I think is a really good thing for us shareholders. And so I'm actually pretty excited about it.

Hi, it's Itai McKellie from TD Cowan over here. Thanks for hosting the event. Just two questions. Chris, you mentioned opening lanes going from six weeks to six days. Curious kind of when you think you can hit that, what the significance is maybe for costs when you get there, and then how transferable is that rate of change to international markets? And then one for Dave, just on the 60% gross margins, is that all assumed to be on the third-generation hardware and could a fourth generation down the road present some upside to that?

Do you want to go first?

Yes, I'll talk first about the lane expansion. So this has been our expectation, right? This has been our thesis is this, as we continue to improve the generalization, there's fewer new things to learn, so the Uber driver, you know, obviously more rapidly deploys. We don't believe in, like, this one-shot YOLO and hope kind of strategy. We actually want to know when we put it there. It wouldn't just get lucky today that every time it's on that route, it's going to be safe. And so there's an investment we make in verifying and validating the systems for these new lanes. That's something that didn't matter initially, but we have been accelerating that work. And I think it's less about cost, more about flexibility, and the ability to go and be adaptive and responsive to customer need. And so when a customer comes to us and says, you know, I really want to operate between two places that currently aren't in our network. It goes from, okay, we need to plan ahead to allowing our sales team to say, yeah, we'll be there next week, right?

And that flexibility and ultimately the compounding and network effects that will come from this interconnected network of routes will really, again, kind of compound into the value that we provide to customers, is my expectation. and relative to the 60 to 70 um so the short answer is yeah i i still think there are a lot of ways um that we will get to 70 i still think that is going to be our target um if we work with our imovio partners and jeremy back there like we're already talking about all right what what changes would we make uh on the hardware that could be really productive as well as more cost effective i i think there's a lot of things also like four years from now the cost of the human driver is going to be substantially more than it is today i think the cost of uh insuring av trucks is going to be substantially lower um for our customers and i think that's going to create more value um you know so i think there's a ton of opportunities there uh we certainly uh believe that 70% is the right target and it might just take a year longer to get there.

I think we have time for two quick questions we've got them right here. Is that a commenter on how long we're taking to answer?

Hi, I'm Mike Lattebor, Northland Capital. So on the economics you shared, is it materially different between long haul and say more regional use cases? Think about your mix. You know, what do you think about the mix of kind of customers doing long haul versus more regional use cases?

Yeah, long haul has definitely been the most popular thesis that people come to us on. But as you heard from Matt, this short haul use case is tremendous and sees value near instantaneous. And so we have customers in both camps that are growing very, very quickly.

I'd say the growth in each segment, now that they're better understood, is equal. but we just have a much larger pipeline on the long haul and in terms of improving the economics you know our cost basis for serving them I don't think there's a material difference to us whether it's short haul long haul we really think about it as amortized on a per mile basis and so yeah not particularly Ken Hexter from P of A thank you for the presentation and the the rides a little later on maybe just talk a little bit about your lane expansion you've talked about the speed you can do it moving north uh going into i mean we haven't really hit on weather and different lanes and and your expansion speed and where you want to target

and uh maybe throw in also regulation you know as you do that are you now free free to go everywhere thanks yeah so we're um one question turns into like five that was that was that was well played sir well played uh so yeah i just gotta okay it's all good um so on the the lane expansion side yes uh you know from a build the map and verify validate it doesn't really matter whether we're in texas or arkansas or minnesota right so that that you know the competence for building those maps that's that's not it and verifying validating them doesn't really matter across them on the dimension of weather um you know today we're operating in a variety of weather conditions including you know good rain um we'll continue to push that it's really incremental work you know by the end of this year we expect to be operating in light snow when we start to move to snow this is one of the things that i by the way about 15 years ago i created a boogaboo about snow and i like wish i could go back and reset that conversation um but but if you think about what does snow mean there's there's kind of three ways it affects the the Aurora driver so one is there's stuff in the air which makes it harder to see in certain conditions the ground can have a lower friction which means it's harder to control vehicle at least you have to be less dynamic and the third is that the world looks different the first of those we already have them right we drive through dust we drive through rain we need to do the work to make sure there's nothing surprising but this is this is not a really a thing that we worry about the the low friction part of this again this is an incremental step of validation where we just want to go we'll go through and check that the control system doesn't do anything goofy when you get to particularly low degree of traction on the road and then make sure that we've encoded the behavior so that we can respond when we identify those things and then when the world looks a little bit different again this is something it's just incremental work it's not it's not a big deal the last part of the question was around regulation and as Osa's anecdote went into like we're seeing an incredible amount of progress on that front you know more action at the federal level than we've seen you know that I've seen in I don't know 20 years of working this so that's exciting to see we're also seeing a lot of enthusiasm from the states we operate into it's going to be a while where we continue to operate with 50 different regulatory regimes even with the enthusiasm we see for build 250 yeah which is the the legislation basically the service reauthorization act which is putting in place a framework for regulation for our vehicles that's going to take a while to come into action but you know we have a team that has put a lot of effort into building relationships and trust with the federal and state regulators, and so we feel very comfortable about our ability to unlock key economic elements of expansion across the U.S. It'll take effort, but we feel good about it. Okay. I took too long with that last question. I blame Ken. So with that, thank you all. I know this was a big commitment of time. Hopefully you found it useful. Hopefully you come away with the enthusiasm and energy and excitement that we have from this. For those of you here in Dallas, I am psyched to go get you in a driverless truck operating on the freeway here. It is something that just does not get bored or get boring. So glad to have you with us. Glad to have you come do that. And with that, let's roll. Thank you.

For everyone here in the room, webcast is cut. I just wanted to give you a sense of what's next. Can we cue the slide for instructions for everybody, please? For those of you that are in the first wave of ride-alongs, if you could make your way to the registration desk just outside the door, we're going to give you a boxed lunch for you to enjoy on the way and get you on the road. When you come back, all the Aurora staff will be here for you to engage with. You can engage with our activations. For everybody else who's later in the day or not participating, lunch will be available in the foyer between now and 1 o'clock, so plenty of time to get your food. We have our executive leadership team here along with a ton of subject matter experts from across Aurora that are super excited to engage with you and answer your questions. So please mingle around, enjoy. We have three activations in the back of the room, safety and regulatory, we know is always a hot topic. Aurora services that OSA discussed how we integrate with customers, how they will operate these trucks in the DAS model. and then our industrialized hardware kit, which I know Jeremy plugged to spend some time over there. We have samples you can see and our hardware experts to explain why this is such a critical part of what we're doing and I think often underappreciated by folks on the street. So please enjoy and Colin and I are also here if anybody has any questions and I'll be down in Palmer and can also answer questions there. Thank you so much for coming out.