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  "documentTitle": "Aurora Innovation, Inc. (AUR)",
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  "authorName": "Kerrisdale Capital",
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  "presentationDate": "2025-08-01 00:00:00",
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  "notes": "This is a research note page from a short-seller report criticizing Aurora Innovation's business model and TAM claims.",
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      "text": "Aurora's TAM estimate is delusional.",
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      "text": "Total Addressable Market: $8.5 billion",
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      "text": "have to be transported the old-fashioned way: by manned truck. Drayage is time-consuming and expensive, which is widely understood in the intermodal shipping business. As we detail in this report, shipping to and from a terminal takes a few hours and requires building in time-buffers to meet terminal scheduling procedures. Those procedures, including delineating cutoff times and facilitating truck turnaround, also increase the duration of the trip. In addition, a supposedly key advantage of autonomous trucking – not being subject to human hours-of-service restrictions – will go to waste about half the time simply due to the business hours of drayage operators and shippers/customers, which don't operate 24/7. We therefore expect that on trips under 1500 miles, autonomous trucking will provide no time-to-customer advantage over manned trucking. The multiple trailer-transfer points also add potential failure nodes in the process, reducing overall reliability.",
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      "text": "Drayage also adds a significant cost to the shipping process, which we estimate – based on the disclosures of major first/last mile operators, publicly available price quotes, and conversations with logistics consultants – at about $1000 in total per trip, or about $500 each for the first and last mile. Aurora tries to fudge the significance of drayage costs by assuming a price tag of $100/side and relegating the assumption to the fine print in the footnotes of their investor presentations. But the reality is that drayage costs drastically reduce the driver savings that autonomous trucking is meant to enable. The cost of drayage, combined with the absence of improved service-times and increased logistical complexity, will mean that autonomous trucking will be structurally inferior to direct manned trucking on any routes under 1500 miles. It also puts a ceiling on the price that Aurora will be able to charge for the Aurora Driver at about $0.35-0.60/mile, depending on the distance covered in the trip, which is a lot lower than the $0.65-0.85 that Aurora has guided to.",
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      "text": "Aurora’s TAM estimate is delusional. While Aurora often repeats that its TAM is the 200 billion miles driven by “combination trucks” – a statistic from the Federal Highway Administration – the Bureau of Transportation Statistics from which the FHA gets this data estimates that the total mileage of Class 8 trucks on trips over 500 miles is approximately 35 billion. This is critical because even Aurora admits that self-driving trucks aren’t much of an improvement over manned trucking on one-day trips, so it’s unclear why the company keeps repeating pollyannish TAM numbers when real statistics are readily available. We further estimate that fewer than half of those 35 billion miles are on trips over 1500 miles. In other words, the true TAM for autonomous trucking is about 17 billion miles – an order of magnitude lower than Aurora’s claims.",
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      "text": "The autonomous trucks are going to cost a lot more than regular trucks, and require the construction of an extensive infrastructure to support their use. Besides a fairly limited",
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      "text": "At the approximate $0.50/mile we believe is the maximum that Aurora would be able to charge for the software-based driver, that amounts to just about $8.5 billion for the entire market. Even if the number is slightly higher than that, there’s simply not a large enough market for autonomous trucking to justify either Aurora’s market capitalization of $13 billion or any major investment in autonomous trucking that’s going to rely on a hub-and-spoke structure. That may be at least part of the reason Waymo exited the business two years ago.",
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