A Nuro self-driving delivery vehicle in Houston, Texas. Photographer: Brandon Bell/Getty Images , Photographer: Brandon Bell/Getty Images
(Bloomberg) -- Nuro Inc., which has unmanned delivery pods scurrying around Southwestern streets, said that it will build a $40 million facility to assemble and test a new generation of autonomous vehicles in Nevada.
The expansion marks an inflection point for the five-year-old robotics startup. After three years refining its autonomous driving system while delivering groceries, prescriptions and pizza, it says it’s ready to expand and add tens of thousands of vehicles to short-haul cargo routes around the country.
“For us, this is a pretty major step on our path to large-scale commercialization,” said cofounder and President David Ferguson. Cranking out its own vehicles at scale will help Nuro “really break the back of the overall economics of delivery service,” Ferguson explained.
Nuro currently runs its self-driving software on about 70 Toyota Prius hybrids, with a safety driver at the wheel, and 30 of its own driverless pods, dubbed R2, which are monitored remotely by a chaperone. The 125,000 square-foot planned factory would essentially add the finishing touches — including self-driving sensors and software — to R3, the company’s third iteration. The all-electric machine will be sourced from BYD USA, a unit of a China-based automaker that makes a range of electric vehicles, from commuter buses to giant motor coaches.
Nuro has also struck a deal to turn 76 acres of the Las Vegas Motor Speedway into a robot-car R&D center, where it will train up its algorithms on how to handle various road situations before it releases them into the wilds of suburban streets. Specifically, the delivery droids will be drilled on avoiding pedestrians, cyclists and pets. Nuro plans to finish both construction projects sometime next year.
Nuro has been at the front of the autonomous driving pack for years now, thanks in part to its relatively modest mission. By focusing on non-human cargo, the company was able to do an end-run around the so-called trolley problems inherent in road accidents. Its pods — stuffed with pizzas and produce — are far narrower than traditional cars and are programmed to avoid people at all costs, even if it means driving into a ditch.
What’s more, they are carrying some revenue. The company has been delivering groceries for Kroger for three years, a chunk of business that helped it land a $1 billion investment led by SoftBank in early 2019. More recently, it started delivering prescriptions for CVS, packages for FedEx and pizzas for Domino’s. The restaurant business, in particular, is a higher degree of difficulty, given the emphasis on accuracy and speed. “Historically, speed comes with cost,” Cosimo Leipold, Nuro’s head of partnerships, told Bloomberg in April, “but we are changing that.”
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