Chris Drose pitches Aurora Innovation at Sohn 2025

We’re going to talk about highway robbery happening on our country’s interstates. Bleecker Street is short Aurora Innovation, a $14 billion market-cap, largely pre-revenue autonomous-trucking company. It completed its first fully autonomous freight run on May 1 between Houston and Dallas. All right, I knew we’d get AI or autonomous in here somewhere.

It lost $4 billion since inception, and right now it has 1,800 employees, 1,600 of whom are engineers basically manually annotating routes. They were able to complete 1 route on a sunny Sunday afternoon, on a straight line between Houston and Dallas. There’s not much freight that moves between Houston and Dallas. It’s flat, not hilly. It would be a very boring drive—perfect for an autonomous truck.

1. Aurora’s Scaling Story Unravels

Now it’s a scaling story. Congratulations: They got the tech where it needed to be, and now it’s a scaling story. They have 10 revenue-generating trucks right now, and they claim to be scaling to 10,000 trucks deployed by 2027. Our research unveils key issues with that time frame. Their OEM partners disagree with Aurora on that timeline. There’s new competition: Kodiak is going public this summer. There’s also a lot of competition with better business models and less burn.

We think Aurora needs to raise about $750 million more to get to commercialization. Aurora says it needs to raise $750 million to get there, but it has a long history of overpromising and underdelivering. We think it needs to raise $2 billion to $3 billion. Meanwhile, executives are selling and executives are leaving, so we think it’s a pretty good setup.

2. Perception Masks The Reality

In general, we try to understand what the perception of a company is in the market and whether reality is sufficiently different. That is what makes something an attractive short to me. The perception, when we started looking at this, was that Aurora is the leader in autonomous trucking. We believe Aurora spent $4 billion, was able to take the driver out first, and now the real challenge begins. It is the high-cost producer of autonomous miles, which we think matters a lot as the business model of autonomy develops over the next decade.

3. Aurora Lacks A Business Model

We’ve talked to people who said Aurora has a business model, that it will scale soon, and that there’s a clear path to commercialization. As we said, it doesn’t really have a business model. These are tech people; they clearly have not thought about the business model. Wall Street loves partnerships—that was something that was said a lot. They have partnerships with Volvo and PACCAR to actually get the trucks on the road. Unfortunately, both of them disagree with Aurora on the scaling timeline. Also notable: A former CFO gave Aurora management a C or a D grade. Not amazing.

On May 1, they took the driver out and did this freight run between Houston and Dallas. You’ll notice that they’re scaling with a Volvo truck, but PACCAR’s Peterbilt has built the majority of their trucks so far. Both OEMs are going to help them scale. You’ll notice that the Peterbilt logo is blacked out on the truck. There was a lot of press and excitement around this event, and we were wondering why.

4. Partners Reject The Timeline

So we asked PACCAR, and they said, “In our view, it’s still pretty early days on the road to commercializing autonomous trucks. We will not agree to commercialize anything that is not proven to be super safe. We’re not there yet.” Basically, they told Aurora to take it off. They said, “Yeah, leave us out of this one.”

On the industry scaling timeline, an industry expert said they need to survive 10 years past launch, at which point they may start offsetting their costs. It’s a very expensive business, and unfortunately, they don’t have the business model to really make it 10 years, in our opinion.

5. Volvo Pushes Launch To 2030

PACCAR is 1 truck partner, and Volvo is the other. Volvo has an autonomous truck that Aurora says will be ready in 2027. Volvo has a long history of missing deadlines in autonomy. We talked to a senior Volvo executive about the 2027 Volvo product. It’s not there yet, because it’s already 2025. I think the time window is really about 2030, not 2027. We don’t think Volvo signed off on this, and we don’t think they’re there yet. Meanwhile, Volvo is doing layoffs in autonomy and at its main plant. I think it’s going to take a lot more capital and a lot longer than Aurora is saying.

6. Competition Undercuts Aurora’s Tech

As we discussed, there’s a lot of competition. Aurora wants you to think that it has a tech and business lead. Another industry veteran said Aurora has done a very good job, but under the hood, there’s nothing special in its AV stack, or autonomous-vehicle stack. There are a lot of engineers working on this manually, and that’s very expensive. Look what happened to Cruise; it is now bankrupt.

In January, on the eve of commercialization, Aurora went to CES and announced that it was partnering with NVIDIA and Continental to deliver driverless trucks at scale. The stock went up 51% on this news. That was basically the same news they announced in 2018, when they said NVIDIA and Aurora would collaborate to build a next-generation autonomous-vehicle compute platform. At that time, in 2018, they said, “We will have cars and trucks on the road in the next couple of years.”

Now they’re just focusing on trucks. They pivoted to trucks because they said it was a cleaner commercial and regulatory environment. Meanwhile, Waymo is already succeeding on the roads. We talked to another industry veteran, and he said he was genuinely shocked that this is what they announced: “I couldn’t believe it when I saw it. They have already announced it.” Meanwhile, we think it is just off-the-shelf NVIDIA chips.

7. Aurora Burns Cash As Insiders Exit

Aurora has a very long history of understating how much capital is needed in this business. Its original SPAC presentation claimed it was raising enough money to get to launch, which would have gotten it to what happened this May. Since then, it has raised an additional $820 million at prices that are much lower than where they are now. It has diluted its share count by 50% since the IPO and announced a $500 million ATM in February. Last week, it said, “We are going to need $650 million to $850 million more to reach cash-flow breakeven.” However, we think that number is closer to $2 billion to $3 billion.

Meanwhile, you’re seeing insiders leaving and selling, which is not what you want to see on the eve of hockey-stick growth and commercialization. Its co-founder, Sterling Anderson, left the company. Aurora’s engineering lead left the company in August 2024, just a few months after presenting at its analyst day. Its general counsel left the company in January 2025.

CEO Chris Urmson just entered a new Rule 10b5-1 plan. Reid Hoffman sold 14.8 million shares in November at $5 per share, and Sterling Anderson sold $8 million worth of shares between $2 and $3. He can sell 44.8 million shares post-resignation, with that resignation becoming effective in 3 weeks.

A former PACCAR senior employee is another key scaling partner for them. Aurora has to go out there with whatever money it has left and try to force the market. I’m not sure I would stick around if I were Sterling Anderson. We are short Aurora. There will be a full report going up on our website shortly.