Good morning, everyone. I'm Stacy Fight, vice president of investor relations, and on behalf of the entire Aurora team, welcome to our 2026 Analysts and 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 Fischer, 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, McLane, and Werner, and they will give you their firsthand experience hauling commercial freight with the Aurora Driver. From there, Shondar Bara, 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-one and upfitting partners, including Volvo, Hino, Amobio, and Roush. They are going to show you how this all comes together. Next, CFO David Midday 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 built in some brief windows for Q&A during all of the panels and 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 to quickly read this. I need to 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 a substitute for or in isolation from, our GAAP results. Now, let's get into the fun stuff. Enjoy.
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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 and spend a whole day with us, so we really appreciate that. We hope this is going to be worth your time today. What I really want you to get out of today is to learn a little bit about what we're about at 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's happening on the road today. The 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 a horse-drawn carriage. Right? 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 start to put a car in every driveway. And boy, did that change the world. It didn't just change how we moved. It changed how we lived. It changed 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 kickstarted 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 built at the time, and we had big dreams, right? This was going to be big. It's 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 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-lightweight 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.
We 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, and 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 look at what we are doing and 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 had 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 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. Aurora Driver 2 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 10 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 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 mph. 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 McLane, 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 driverlessly for Detmar between the Capital Sand Mine and between their distribution point. In the coming weeks and months, you'll see us begin to operate driverlessly 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 Aurora 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 planning to or 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-too-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 and safety 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. Low-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 long-standing 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 more 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 so 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. TÜV SÜD 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 Edge Case, 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 the 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 there?
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 to 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 Mahon 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 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 at top of mind back then were three things. First was the tech. Was it there? 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 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've got to go millions more miles on the road to keep proving it. But I think at this point, millions of miles in, the safety case has been proven, and we're very satisfied with that. Second thing is the tech. Like, I feel really good about the tech. I don't think there's any question anymore. In fact, we talked about this internally all the time. Tech is there. We're not worried about the tech. We have some integration work to do, etc. 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 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 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 ready to, you know, we're just ready to keep moving forward with you guys.
We really appreciate walking alongside you on this journey. We've learned a lot from you guys as well. And with that, I want to really turn it to Eric and then to Matt. I think Eric, McLane's been working with us for two years. What prompted that decision, and, you know, 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 opportunities to put our drivers where we really needed them was why I 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 there's multiple things that prompted us to look at this and go down this journey. Safety, of course, being a big one. The, you know, the Permian Basin is an incredibly dangerous place on the roads. A lot of traffic, a lot of truck traffic at night. A lot of people trying to get to these drilling and frac 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, you know, 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.
Okay. 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 — it's 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, as that could give more clarity. So, as we look at our trucks, and 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, I 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 broken 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, and 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 know, you're getting 75% utilization. So now go into their hours of service, you know, you'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 truckloads per day, getting into the five to six range on the 60-mile loop. It 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, you know, as drivers go into their three-week shift, when they go back home, their trailer goes back in the pool. But because, you know, 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.
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 as differentiated?
I think, 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 a yard in a drop yard.
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? 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 that, that this conversation. No question. I still actually go out 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, Si Warner with a truck, you know, instilled that message and that, you know, just across the entire company that 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, right? 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 and 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. 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. 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. 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 want 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, McLane'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 lbs off of a truck with a hand cart. 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 they were 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, you know, an inevitable choice for you.
Yeah, so we've been in business for about 15 years now. 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, you know, it's on the road, but it's also very vocational as well. We're, you know, 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, 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 excited about that as well. So that is one of our biggest drivers going into the DAS model, really.
Great. Eric, how are you guys thinking about either the DAS evolution or just the next several years at McLane 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 tax and other benefits, as you know. 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. He's very polite, by the way. You know, it's a fun conversation, 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 the 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 that's — 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. And I think it's about really exploring what lanes this is best suited to. Like, we have a massive network countrywide across all 48 states. There are lanes that we already know that this will — because we, you know, 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 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 how do we get to the point where I think we start to strip the cab of these trucks of their creature comforts and work with you guys in that so that that becomes less expensive even? And then I think 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, hopefully we're much deeper into this and we've got more lanes operating, and we've given our drivers a better life and a better job 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. It's 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 in 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 12,300 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 aspect, you know, we do expect to get into the hundreds of trucks over the next couple of years. So, again, we're still proving out with 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.
Great. 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. Oh. Okay. In the black shirt in the front, please. Oh. Oh, sorry. Sorry about that.
Thanks. It's Scott Group from Wolfe Research. Thanks for doing this panel. I guess, you know, I'm guessing you saw the slide earlier showing the total cost of ownership savings. Just curious, like, each of your perspectives, what you're seeing. And then maybe, Dara, if you think this is best as like a middle-mile application, like, 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. I think if I had to say the one area — 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 I will be quite honest, if we have a gap, we've got to figure this out. I think the economics become viable at scale. I mean, really viable at scale where nobody's eating some of the cost. And I don't think that is too far ahead of us. And I think that in sometime in the next few months we will get to a point where we believe that economically we can make this work. But there's work to do there. The second part of your question, yeah, I think absolutely where we run changes the economics for us, changes the viability. For us, honestly, we believe the long-haul route is the best. The middle mile where we're running, you know, 500, 600, 700, 2,000 miles, whatever that happens to be, the longer we can run, 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 it 22 hours a day or 20 hours a day out of 24, all of that matters. Shorter than the haul doesn't allow us to do quite that much. So I think economics will get there, but 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.
Hi. George Generas from Cowen 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? Thank you.
Maybe Eric can take that as a 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 seeing basically 100% — I don't want to say — I can't do it — 99-whatever percent of the time on stuff that's controllable, right? There's stuff that isn't controllable. Something that's 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 — but I have no — we have an expectation that we'll just see that continue to be very positive. I forgot the last part of your question. Sorry.
Are there any particular parts you're focused on? Is it —
Oh, 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 that you have to do on the physical asset.
Thank you. Rob Malani, question for Darren 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, kind of how long or what do you think you need to build that trust? Thank you.
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, and that only grows. Even in Aurora and all of the driverless operations trucks, most bullish case, 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 with a lot of intention and thought. But they know, and we've certainly talked to you.
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 locates. So they sort of don't have a fear because they know that right now that job is very safe and will be, we think, for the foreseeable future. So, 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 resonate with 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. Like, you know, 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, you know, your good drivers are running next to drivers that might not be the best driver. So, when they know that, you know, you're building a team that's adding more reliability to the roads, more safety to the roads, you do see, you know, 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 also have a driver in the cab?
I think it's different types of freight, right? I think you said it maybe in a good way, which is like you use intermodal when that makes sense, use drivers when that makes sense, use Aurora when that makes sense. So I think if you looked at the whole company and how it would affect MLAN'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 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 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 driverless 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 don't you know, I think we have to just think about 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 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 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 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 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 you know, 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 a similar type to you, like 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 this stuff we run with, 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 Cancer Fitzgerald. First and foremost, thank you to 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 or are you the outlier? Just curious to kind of understand like what really drove it home for you? Obviously, we talked about the benefits, but was there something specific and how long did that take?
Maybe we'll start with Matt, who's the most recent adopter.
Yeah, 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 moments for us. And then 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 operational control. Like no one wants boom or bust anymore. Everybody wants to see significant returns. So if they can base load their operations with guaranteed capacity helping to fix their cost 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. You know, for me, I don't know if it was an 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 go now?' No, you can't go yet. You know, that was probably a great, it was, I don't know if it was an 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 funny.
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 the row of a truck. Like, you go, 'Holy crap.' Like, I mean, this really works. And that's been almost, that's how it's been 5 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's 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 when, okay, this really is safe. This can work. The tech's there, safety is there. Now we 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 a moment.
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. 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 Fabernet. Fabernet's a top tier CM based in Thailand with over $4.5 billion of annual revenue and 3 million square ft of manufacturing space. This is our 8,500 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 production. And it has the headroom to scale up to 1500 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 outfit partner Roush in Livonia, Michigan. Roush has five decades of excellence in vehicle outfit. They have extensive experience with autonomous vehicles. We have a 20,000 ft² 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 1,000 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 got to be honest, I think it was showing off a little bit. So, our second generation hardware is also being installed lineside onto the Volvo DNL 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 Roar 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 Amovio to develop our third generation kit. This will be industrialized automotive grade hardware enabling tens of thousands of autonomous trucks over time. It is an industry first hardware as a 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 objectives. And for Amovio, 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 Paccar. This multiplatform 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 Mlan from Amovio, Noel Unstead from Paccar, Brad Zatelli from Roush, and Saskco from Volvo Autonomous Solutions. Thanks everyone for joining me. Let's start with you Brad from Roush. Roush has a dedicated facility to outfitting Aurora's second generation hardware onto trucks. Why is this program so important for Roush?
Well, as 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 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. Saskco, together with Volvo Trucks, BAS has made remarkable progress towards line integration of the Roar Driver. What makes the depth and velocity of the Roar relationship unique to you and as you execute on your commercial autonomous roadmap?
I mean, it has been a long journey, right?
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, 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. We aligned on responsibility splits. One thing that stood out as well was that Aurora really wanted to do this together with us and not as the other players we met all at that point in time where they said, 'Give us the truck and then we'll take care of the rest.' So 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 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 one 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 Amovio's growth strategy? And how do you view this opportunity?
Yeah, I mean, 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 Sask's point, building safety into products at scale. Yeah. So if you want to, what do we do well? We build safe, reliable products at large scale and we've been working in ADS 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. It's 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 you know, the partnership has been running for a couple of years and I think that the interesting thing about the 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 in 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.
Nice. Paccar's experience, Paccar, 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, Shondor, 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, 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 upfit process works and how we can get to 20 per week?
Absolutely. 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 could 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 it into our facility, we wash all the trucks. Our certified technicians then start actually de-contenting 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 sub-assembly. 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 till 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, 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, our facility is and has been up and running. We're fully staffed. All of our equipment, tools, fixtures, those are all validated and 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.
Nice. Let's go back to you, Noah. 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 are 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.
Great. Saskco. 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 a handful or five to 10 customers that we work extremely tight with in a partnership approach. And we have done that and built the ecosystem, developed the solutions together with them. And now when we have announced that we are launching in quarter 1 next year, Q1 2027, we are launching by the end of next year, we should have 300, 100, 300 plus trucks in operation. Then we have opened up and talked to more customers and the interest is huge. And what is 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. Of 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, Amovio's economics are actually tied to operation of the fleet, operation of the kits. How does this mutual incentive shape prioritization and execution at Amovio?
Yeah, 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. You know, 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 you 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. Yeah. 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. Then 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, Jeremy. Actually at this point we'd like to open it up to questions. Oh, we 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 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?
