Embark co-founders Alex Rodrigues, left, and Brandon Moak with their fleet of autonomous semi-trucks at the startup’s operations center in Ontario, California. Embark Trucks
What makes a couple of brash 22-year-old entrepreneurs think they can take on Waymo, the clear leader in self-driving vehicle technology, when it comes to putting autonomous trucks on the road?
“We’re able to move really fast,” Embark cofounder and CEO Alex Rodrigues told Forbes aboard the cab of a sensor-laden Peterbilt semi as it barreled down the I-10 on a sunny morning, hauling a commercial load from Ontario, California, to Phoenix. (As required by law a safety driver’s hands are on the wheel, but the big rig is driving itself down the busy highway.)
“Waymo may have the ‘conglomerate advantage’ of build once, use many times,” he said. The Alphabet Inc. unit’s robot truck program utilizes the same tech that’s in its self-driving minivans, and it’s looking to deploy it elsewhere. “We think in this period of time where the goal is to deliver a working product, and all we’re trying to do is deliver a single vehicle to market first, we have a huge advantage because we’re able to move in such a focused way.”
Silicon Valley VC firm Sequoia Capital agrees and just led a $30 million Series B round for the San Francisco-based company, boosting total funding to $47 million for Embark two years after it was founded by Rodrigues and Brandon Moak, its CTO. The funds will help Embark’s fleet expand to 100 trucks from five, load them up with Velodyne lidar sensors, cameras, radar and computing system and compete for software talent.
Early this year the company completed the first coast-to-coast test run by a self-driving truck, traveling from suburban Los Angeles to Jacksonville, Florida. Embark’s autonomous Peterbilts are also generating revenue hauling loads daily between Ontario and Phoenix for shippers including appliance giant Electrolux.
Most investment and excitement in the autonomous vehicle space has concentrated on self-driving cars, but there’s no consensus on when big fleets of robot vehicles will really be ready to provide cheap daily rides to large numbers of commuters. Commercial trucking is another matter. A combination of a driver shortage, estimated at about 50,000 trucks in the U.S. last year, and insatiable consumer demand for stuff hauled by trucks has created an opening for a tech solution.
And since long highway runs are easier for AI-enabled autonomous systems to master than chaotic city streets, a host of companies including Waymo, Uber, Starsky Robotics, TuSimple and, apparently, Kache.ai, a stealthy company connected to former Uber and Google engineer Anthony Levandowski, see a big opportunity. Levandowski’s Otto, acquired by Uber in 2016 for hundreds of millions of dollars, stoked interest in applying autonomy to trucking (and a nasty lawsuit with Waymo).
Waymo, which is close to launching a revenue-generating robot ride service in Phoenix, isn’t sharing many details about its truck program, which started hauling loads for Google’s Atlanta-based logistics unit early this year in customized Peterbilt semis. Uber’s autonomous truck tests, which had been centered in Arizona, have been idled since March in the aftermath of a fatal accident in which a self-driving Volvo XC90 SUV struck and killed a pedestrian in Tempe.
Despite the size disparity, Sequoia thinks the precocious Canadian roboticists who lead Embark can compete with those giants.
“A lot of people take false comfort in the availability of talent and money,” said Sequoia partner Pat Grady, who is also joining Embark’s board. “What we love about Alex and Brandon is they are outcome-oriented.”
Their focus is on mastering the southwestern portion of the I-10 freeway because it’s such a big commercial trucking corridor. Cargo from the ports of Los Angeles and Long Beach heads to hundreds of warehouses and logistics facilities in Ontario, where Embark has its operations center, and needs to be hauled across the country.
Right now Embark’s fleet carries loads mainly between Ontario and Phoenix, though it’s expanding into Texas and will eventually operate on I-10 all the way to Florida, Rodrigues said. Revenue from commercial shipments this year won’t be huge, in the hundreds of thousands of dollars range, but the opportunity is enormous, he said.
“We’re creating a proof-of-concept fleet, building up to 100 trucks, and we’re vertically integrating all of that to move very quickly during this period to get as rapidly as possible to a point where we can show ‘here’s a Class 8 truck that can operate completely safely all on its own moving freight,’” he said.
At that point, perhaps within a couple of years, Embark will shift its focus to licensing its software to commercial shippers for their truck fleets, rather than building and operating its own. The commercial potential is huge, said Grady, who calls trucking the “killer app” for autonomy.
“Trucking in the U.S. is, dollar-wise, worth about twice as much as all of software. All of software is worth about $350 billion and trucking is about twice that. And even just the long-haul, sole-load piece of trucking that Embark is focused on is about $350 billion.”
Rather than replace human drivers, Embark says it can make up for the driver shortage by offering its system tailored to long-haul routes, where it’s become tougher to fill positions. Shippers are also excited by the potential for big operational efficiency gains, he said.
“Trucks have a truly 24-hour utilization curve, which means we can go from a truck that does 100,000 miles a year to a truck doing 300,000 miles a year,” Rodrigues said. “Overall we estimate that when you put a driverless truck into operation, you’re going to go through its million-mile lifespan over the course of about three years. And you’re going to produce a surplus which either gets captured in lower cost to consumers or more profitability to fleets and technology developers of $800,000 per truck over the course of three years.”
Rodrigues has been fixated on robotic technology since his junior high school class from Calgary won the High School World Robotics Championship in Atlanta in 2009. He went on to study the subject at the University of Waterloo, where he met up with Moak, who was also enrolled in the program. The two built an autonomous golf cart that Rodrigues said was Canada’s first self-driving vehicle, but they had bigger ambitions.
At just 20 and still in school, the pair traveled to Silicon Valley, where they met Kyle Vogt, founder and CEO of Cruise Automation, which is now General Motors’ self-driving tech unit.
“He tried to convince us the startup life was awesome and that we should drop out of college and go work for Cruise,” Rodrigues said. “He convinced us of half of that.”