{ "docId": "019dd923-622c-750b-8b98-455ec9c0494d", "docSlug": "a408d79c90df", "documentTitle": "Aurora Innovation, Inc. (AUR)", "authorId": "53_Kerrisdale_Capital", "authorName": "Kerrisdale Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-08-01 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 31, "pageCount": 45, "prevPage": 30, "nextPage": 32, "slideType": "villain_critique", "function": "name_villain", "density": "overcrowded", "nDataPoints": 6, "notes": "Includes a direct quote from Aurora CEO Chris Urmson regarding hardware costs.", "elementsJson": [ "paragraph", "quote_block", "footnote" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-455ec9c0494d/31", "deckHref": "/decks/019dd923-622c-750b-8b98-455ec9c0494d", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-455ec9c0494d.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-455ec9c0494d#slide-31", "components": [ { "bbox": null, "kind": "callout", "text": "At about $0.50/mile, the entire addressable market for autonomous trucking in a hub-and-spoke system is somewhere between $8-13 billion, which is less than Aurora's current market capitalization of $13 billion.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-2040-777a-8553-5c40fc366433", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "addressable market: $8-13 billion", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-2040-777a-8553-6791bfb16cb9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.35 }, "kind": "paragraph", "text": "Hub-to-hub autonomous trucking will need actual physical infrastructure rather than just software code to enable its operation, and it's going to come out of the $0.50/mile that Aurora is targeting.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "04d66fab-716c-48e9-9e91-ca212fa89596", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.78, "x": 0.11, "y": 0.46 }, "kind": "paragraph", "text": "Between 2020 and 2024, the average cost of a Class 8 truck was about $200,000. Using the universal estimate of a lifespan of about 750,000 miles and the BTS estimate of approximately 95,000 miles driven annually per long-haul truck, the typical truck lasts just under 8 years. Assuming a high single digit interest rate on a lease, that comes out to about $0.37-0.4/mile driven, which is right around the ATRI estimate of $0.39 for lease expense per mile.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "210669fe-9ecc-4441-b4e6-67eca8550443", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.78, "x": 0.11, "y": 0.21 }, "kind": "paragraph", "text": "At about $0.50/mile, the entire addressable market for autonomous trucking in a hub-and-spoke system is somewhere between $8-13 billion, which is less than Aurora's current market capitalization of $13 billion. The prize here is just not that big, and that's before we consider the increased system costs of autonomous trucking.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "555648e6-8f09-437f-9dfc-52abd2615ba2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.78, "x": 0.11, "y": 0.09 }, "kind": "paragraph", "text": "another source for trucking data - the Bureau of Transportation Statistics - estimates the total annual mileage of Class 8 trucks on trip over 500 miles is 37 billion. Based on the FAF splits, about 40% of those miles would be on trips over 1500 miles, which would make the Class 8 TAM closer to 15 billion. No matter which way you slice the numbers, the addressable market for Aurora is a whole lot less than 200 billion miles.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "77f71140-bfb6-4fa7-b364-dd769e64e23e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.21, "w": 0.73, "x": 0.16, "y": 0.62 }, "kind": "quote", "text": "So cost of the truck. So, one, our OEM and partners are going to decide that. But the way to think about it is there's minimal kind of new hardware components in there, right? And the driver parts, the things that you would think of as the expensive parts, are part of that Hardware as a Service. So, they're on the Aurora side of this, and our customers will pay us for that over time on a per mile basis. So, the base truck, we expect to be roughly in line with what it costs to buy a truck today. And I would expect that our partners, again over time, as this becomes more broadly adopted, there's an opportunity to depopulate some of the content in the truck and create an even better offering from our OEM partners to their customers.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c154a4fa-b423-4481-9598-32b963ee855e", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "So cost of the truck. So, one, our OEM and partners are going to decide that. But the way to think about it is there's minimal kind of new hardware components in there, right? And the driver parts, the things that you would think of as the expensive parts, are part of that Hardware as a Service. So, they're on the Aurora side of this, and our customers will pay us for that over time on a per mile basis. So, the base truck, we expect to be roughly in line with what it costs to buy a truck today. And I would expect that our partners, again over time, as this becomes more broadly adopted, there's an opportunity to depopulate some of the content in the truck and create an even better offering from our OEM partners to their customers. — Chris Urmson, Aurora Innovation CEO", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2040-777a-8553-6002ac26e77e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.78, "x": 0.11, "y": 0.85 }, "kind": "source-note", "text": "11 PACCAR, the second largest class 8 OEM in the US and the larger of Aurora's two OEM partners, discloses an average interest rate of a bit over 7% for its loan book, which is comprised of financing buyers of its trucks. That portfolio is composed of loans made over the last several years, with newer loans at close to a 10% interest rate.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "57c4ab7e-dbac-42ff-a3a7-378eb9f2864c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.09, "x": 0.11, "y": 0.42 }, "kind": "title", "text": "The Trucks", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9e1c0ed7-8cad-42f9-8768-f459581177c0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.35, "x": 0.11, "y": 0.31 }, "kind": "title", "text": "The trucks and the terminals aren't free", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cec90f31-27f3-4f5d-94c8-6b8e352f186d", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Thesis archetype", "slug": "thesis-archetype", "agent": null, "layer": "slide", "matchId": "c141b966-385c-4fdd-b8f4-a4e2a954e13d", "evidence": "The trucks and the terminals aren't free", "confidence": 0.8 } ], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }