Nuro diverges from delivery, plots new self-driving business plan

Best known for its unmanned miniature delivery vehicles, self-driving technology company Nuro Inc. is switching up its business model.

The company no longer plans to manufacture its distinctive vehicles or operate them in an autonomous delivery service.

Instead, Nuro intends to license its core self-driving technology to carmakers and other mobility providers, company executives said Sept. 11. Notably, it expects its self-driving system will help automakers offer personally owned self-driving vehicles for sale.

"We believe the time is right for personally owned vehicles to have autonomous capabilities," Nuro Chief Technology Officer Andrew Clare told Automotive News.

Such a product has been an alluring but elusive target in the modern-day push to develop self-driving vehicles.

Yet the idea has gained traction this year. Mary Barra said in February that Cruise's self-driving technology will be a "huge opportunity from a personal autonomous vehicle perspective." Elon Musk may elaborate at an Oct. 10 event on plans to operate a robotaxi network that, in part, relies on personally owned autonomous Teslas.

Nuro presents an option for other automakers reluctant to spend billions developing their own Level 4 automated system — an industry term for when humans have zero role in the driving process.

The company has talked with automakers and others for the past 12 months, Clare said. Although the technology was developed for driverless use cases, he said it could also underpin driver-assistance systems.

Beyond the traditional auto industry, Nuro's tech could be used in robotaxi services — or even for trucking, he said. Nuro acquired self-driving truck startup Ike Robotics in 2020, and that helped accelerate Nuro's highway testing.

As a technology provider, Nuro may compete with the likes of global supplier Mobileye and British startup Wayve in building automated technologies that can support either driver assistance or autonomy.

But Mobileye and Wayve have started with driver assistance and are building up toward higher levels of autonomy, while Nuro has taken the opposite path.

With autonomous vehicles already commercially deployed that "puts us in a different category in terms of the progress and the maturity of our technology," Clare said.

Beyond the autonomous driver, Nuro may provide developer tools, simulation software and teleoperations capabilities that aid in partners' in-house efforts to augment their vehicles with the company's technology, he said.

Partnerships could involve Nuro receiving fees on a per-mile, per-trip or per-vehicle basis, depending on the application, he said.

The company will continue to operate a test fleet in northern California and Houston, comprised of Toyota Prius hybrids and its own R2 prototypes. Its next-generation R3 prototype is expected on the road "in the near future" as part of that test fleet, Clare said.

Those vehicles will be used in R&D and to continue a partnership with Uber Eats that remains ongoing despite the strategy pivot.

That change comes after Nuro hit headwinds in 2023, delaying a manufacturing partnership with Chinese automaker BYD and eliminating 40 to 50 percent of its employees during two separate layoffs amid a downturn in investor sentiment toward the AV sector.

In the interim, Clare said the company's artificial-intelligence underpinnings matured enough for use in passenger-carrying applications.

Before, Nuro focused on goods "because the pizza doesn't care that much about comfort," he said. "With more of an AI-first approach, you don't have to make a choice. You can have both safety and comfort."

One unknown in the company's turnaround plans is the long-term fate of its R2 and R3 vehicles.

Nuro holds a special place in regulatory history. It is the only self-driving tech company to receive an exemption from federal motor vehicle safety standards by NHTSA.

The exemption was granted in 2020 to further develop innovative business models "like Nuro's delivery service," regulators wrote in approving the request, which allows the company to deploy up to 5,000 occupant-less vehicles that do not contain windshields, side-view mirrors or backup cameras.

It addresses delivery service and covers vehicle components, not necessarily the AI that's now Nuro's core focus. It is unclear whether Nuro could outsource the manufacturing and service operation aspects to a separate company and still retain the exemption.

Clare seems to think so.

"We are in active conversations … with some mobility providers who might be interested in using these delivery vehicles, as one of the kinds of vehicles they use in their service," he said. "I anticipate you'll see these vehicles in the future, but as part of ecosystems where Nuro is not doing the vehicle manufacturing and scale ourselves, but with partners."