Week, the California Department of Motor Vehicles granted Nuro approval to test its third-generation R3 autonomous delivery vehicle in four Bay Area cities, giving the AV startup a positive boost after facing some setbacks and financial struggles.
Nuro Expansion of Testing Area
The approval allows Nuro to test its driverless delivery vehicle in Mountain View, Palo Alto, Los Altos, and Menlo Park. Nuro’s vehicles, which don’t have seats, windows, steering wheels, or pedals, aren’t designed to carry passengers, only goods. Despite operating on public roads, they look more like giant sidewalk delivery robots with temperature-controlled storage units to hold food.
Deployment Scale
The upgraded geographic area will represent the third-largest deployment of fully driverless vehicles in the United States, if not the second-largest. Waymo is currently the largest, and co-founder Dave Ferguson noted that Cruise might have had a larger deployment span before it grounded its fleet late last year.
Partnership with Uber Eats
Nuro also has a 10-year commercial deal with Uber Eats that it’s been testing with third-party vehicles.
Manufacturing and Financial Challenges
Nuro has been teasing its R3 for a couple of years, but last year, it decided to pause a planned manufacturing push that would have seen it churning out thousands of vehicles in partnership with Chinese electric car maker BYD. The startup—once a darling of the AV industry after raising over $2 billion from high-profile investors—was burning cash fast. After two layoffs over the last two years, Nuro restructured its team to focus on getting the autonomy piece right. That meant putting vehicle manufacturing and commercial operations on the back burner.
Focus on Testing and Validation
Ferguson told TechCrunch that Nuro has no immediate plans to restart scaled manufacturing or heavy commercial operations. The company remains hyper-focused on testing and validating its new AI architecture, and Ferguson says that approach is starting to pay dividends.
Autonomy Progress Nuro
“We’ve dramatically accelerated our autonomy progress and even the timeline around the autonomy side,” Ferguson said. “So that is the software, obviously, as well as the hardware, the sensing, the compute that’s tied to that autonomy software in a [Level 4] setting.”
R3 Testing on Retrofits
Ferguson added that Nuro has been testing and validating the R3’s new hardware and software stack on a fleet of retrofitted Toyota Priuses (about 100, according to someone familiar with the matter) and has even continued to make deliveries with those test vehicles for Uber Eats. In 2022, Uber Eats and Nuro kicked off a 10-year commercial partnership.
Nuro Limited R3 Rollout
Despite putting the BYD manufacturing agreement on hold, Nuro still managed to snag a few dozen R3s from the EV maker. Within the next few months, Nuro will roll out that fleet in the Bay Area and Houston, its other market.
Nuro Future Deployment Plans
A spokesperson for Uber told TechCrunch that the ride-hail and delivery giant expects to start using the R3 for deliveries this fall.
Enhanced Capabilities of R3
“One of the benefits that the R3 provides, relative to the R2, is that it can go on a significantly expanded [operational design domain],” said Ferguson. “The R2 only drives up to 25 miles per hour. The R3 can technically drive up to 45 miles per hour. We won’t necessarily deploy it at that speed on day one. Still, it enables us to do full L4 driverless testing, deployments, even commercialization over a much wider region, basically everything except freeways.”
Nuro Advancements in AI
Improvements in AI, both at the company and industry level, have helped Nuro make that push. Ferguson said over the past few years, Nuro’s approach has evolved to use one to two huge foundational AI models that perform many tasks—mapping, localization, perception, prediction, and planning—in one place, leading to improved performance and efficiency. Nuro then combines this with a more traditional system, where all those tasks are performed on their own AI models to validate its AI in real time.
Potential for Future Scaling
This not only means that Nuro’s R3 can drive faster and across larger Bay Area and Houston swathes, but it also sets the stage for Nuro to scale when it’s ready to do so.
Manufacturing Concerns and Future Focus
That won’t happen this year, and when it does, Nuro might need to find a new manufacturing partner since anything made by BYD will likely be subject to steep tariffs. Ferguson said the tariffs are a potential concern, but he’s happy overall with BYD as a manufacturing partner.
Nuro Continued Development and Exploration
In the meantime, Nuro will keep its head down and work on ensuring the technology is correct and that it’s getting the most out of its Uber Eats deliveries. Ferguson also noted that Nuro is exploring a path to market outside of autonomous delivery but declined to share more details.
