© Aurora
As with any investment, your capital is at risk.
Aurora is “on a mission to deliver the benefits of self-driving technology safely, quickly and broadly,” chief executive Chris Urmson tells investment manager Tom Slater in a recent discussion. It’s starting point is the $800bn trucking industry in the US, addressing pain points from labour shortages to a poor safety record that its technology is well-placed to solve.
In the driving seat
Trucking is not for the faint-hearted. It involves long hours, not seeing your family for days, has implications for your health and can even be fatal. “In the US, if you drive a truck, you’re 10 times more likely to die on the job than the average American,” Urmson explains.
This has led to a shortage of drivers – 80,000 – with the American Trucking Association estimating that 1.2 million new drivers will be needed in the US over the next decade to keep up with rising demand.
But these are all things that the software, the Aurora Driver, can address along with other pressure points, including high fuel costs and the need for driver downtime. The Aurora Driver can go from Houston to Los Angeles in 24 hours, whereas regulations restrict a human trucker to 11 hours a day behind the wheel.
With 80 per cent of freight in the US (by value) moved on trucks, autonomous trucks also promise greater convenience and more choice for consumers and businesses. Everybody wins, he said.
Driven to save lives
Aurora’s biggest claim is its positive impact on road safety. There are over half a million collisions per year in the US involving trucks. Urmson aims to prevent these by working “to bring these incredible advancements in artificial intelligence and sensor technology to bear on such a fundamental problem”.
“If we can make driving incrementally safer, we all benefit. And then, as this technology rolls out more broadly to light vehicles, the whole transport ecosystem will also get safer,” says Urmson.
Because, ultimately, success will depend on whether people feel safe with their families in the car on the road next to a self-driving truck. “The only way you get there,” Urmson says, “is to do exceptional engineering. You must be methodical.”
Getting ahead
Urmson has been focused on driverless vehicles for two decades since researching motion planning and perception for robotic vehicles at Carnegie Mellon University. He got his first taste of the problem when working on the US Defense Advanced Research Projects Agency (DARPA)’s ‘Grand Challenges’, a contest designed to spur AV inventors.
The goal was to develop vehicles capable of autonomously navigating desert trails and roads at high speeds. Working alongside General Motors, Urmson began to appreciate the impact that AVs could have on our everyday lives, not just on warzones, the use case for which they were first devised.
From there, Google recruited him to help set up its self-driving car project, which later became Waymo. After seven years, he left to co-found Aurora.
Most AV companies concentrate on the vehicle, but Urmson and his colleagues focus on their strengths in software. That leaves the hardware to the experts with whom they strike up partnerships.
PACCAR and Volvo are two such partnerships, “Our engineering teams are in constant sync where they’re working to build a truck capable of talking to the driver, and we’re building the driver in a way that’s capable of talking to those trucks.”
Going along for the ride
Urmson understands the importance of bringing people along for the ride, from Aurora’s partners to regulators, investors, the public and its drivers. Aurora employs truck drivers who are “excited about the opportunity,” says Urmson, highlighting the interesting logistics roles that will be created for them on the back of it.
Urmson suggests that “by investing thoughtfully, by building consistently . . . we can build a truly transformational company”.
Emphasising the importance of founder-led companies, Slater highlights that Urmson brings, “huge credibility from his academic background, his deep understanding of the technology and . . . he’s also a leader and somebody that people want to work for.”
It’s that ability to form genuine partnerships with people and companies that can provide valuable inputs into Aurora’s business model that Slater sees as an important differentiator from other AV companies. It increases the chances of Aurora realising its ambitions of solving many of the pain points around transportation. If it succeeds, the growth opportunity is vast.
If you would like to hear the full conversation between Tom Slater and Chris Urmson, please click the link below. We’re providing this link as this company is held in a number of Baillie Gifford portfolios globally so could be of interest to you.
Green-lighting the future
Transporting people and goods is fundamental. And this technology shift could be as profound as the introduction of the internal combustion engine. Urmson concludes that “his imagination is not big enough to see how profoundly different the world will look in 50 years because of [this AV technology].”
What we can see, is that if Aurora succeeds, transport will be safer, better and more convenient for everyone.
Important Information and Risk Factors
The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.
Past performance is not a guide to future returns.
This communication was produced and approved in November 2023 and has not been updated subsequently. It represents views held at the time of recording and may not reflect current thinking.
This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.
All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.
Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford & Co Limited is an Authorised Corporate Director of OEICs.
Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford & Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK.
Persons resident or domiciled outside the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances.
Financial Intermediaries
This communication is suitable for use of financial intermediaries. Financial intermediaries are solely responsible for any further distribution and Baillie Gifford takes no responsibility for the reliance on this document by any other person who did not receive this document directly from Baillie Gifford.
Europe
Baillie Gifford Investment Management (Europe) Limited provides investment management and advisory services to European (excluding UK) clients. It was incorporated in Ireland in May 2018. Baillie Gifford Investment Management (Europe) Limited is authorised by the Central Bank of Ireland as an AIFM under the AIFM Regulations and as a UCITS management company under the UCITS Regulation. Baillie Gifford Investment Management (Europe) Limited is also authorised in accordance with Regulation 7 of the AIFM Regulations, to provide management of portfolios of investments, including Individual Portfolio Management (‘IPM’) and Non-Core Services. Baillie Gifford Investment Management (Europe) Limited has been appointed as UCITS management company to the following UCITS umbrella company; Baillie Gifford Worldwide Funds plc. Through passporting it has established Baillie Gifford Investment Management (Europe) Limited (Frankfurt Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in Germany. Similarly, it has established Baillie Gifford Investment Management (Europe) Limited (Amsterdam Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in The Netherlands. Baillie Gifford Investment Management (Europe) Limited also has a representative office in Zurich, Switzerland pursuant to Art. 58 of the Federal Act on Financial Institutions (“FinIA”). The representative office is authorised by the Swiss Financial Market Supervisory Authority (FINMA). The representative office does not constitute a branch and therefore does not have authority to commit Baillie Gifford Investment Management (Europe) Limited. Baillie Gifford Investment Management (Europe) Limited is a wholly owned subsidiary of Baillie Gifford Overseas Limited, which is wholly owned by Baillie Gifford & Co. Baillie Gifford Overseas Limited and Baillie Gifford & Co are authorised and regulated in the UK by the Financial Conduct Authority.
China
Baillie Gifford Investment Management (Shanghai) Limited
柏基投资管理(上海)有限公司(‘BGIMS’) is wholly owned by Baillie Gifford Overseas Limited and may provide investment research to the Baillie Gifford Group pursuant to applicable laws. BGIMS is incorporated in Shanghai in the People’s Republic of China (‘PRC’) as a wholly foreign-owned limited liability company with a unified social credit code of 91310000MA1FL6KQ30. BGIMS is a registered Private Fund Manager with the Asset Management Association of China (‘AMAC’) and manages private security investment fund in the PRC, with a registration code of P1071226.
Baillie Gifford Overseas Investment Fund Management (Shanghai) Limited
柏基海外投资基金管理(上海)有限公司(‘BGQS’) is a wholly owned subsidiary of BGIMS incorporated in Shanghai as a limited liability company with its unified social credit code of 91310000MA1FL7JFXQ. BGQS is a registered Private Fund Manager with AMAC with a registration code of P1071708. BGQS has been approved by Shanghai Municipal Financial Regulatory Bureau for the Qualified Domestic Limited Partners (QDLP) Pilot Program, under which it may raise funds from PRC investors for making overseas investments.
Hong Kong
Baillie Gifford Asia (Hong Kong) Limited 柏基亞洲(香港)有限公司 is wholly owned by Baillie Gifford Overseas Limited and holds a Type 1 and a Type 2 license from the Securities & Futures Commission of Hong Kong to market and distribute Baillie Gifford’s range of collective investment schemes to professional investors in Hong Kong. Baillie Gifford Asia (Hong Kong) Limited
柏基亞洲(香港)有限公司 can be contacted at Suites 2713-2715, Two International Finance Centre, 8 Finance Street, Central, Hong Kong. Telephone +852 3756 5700.
South Korea
Baillie Gifford Overseas Limited is licensed with the Financial Services Commission in South Korea as a cross border Discretionary Investment Manager and Non-discretionary Investment Adviser.
Japan
Mitsubishi UFJ Baillie Gifford Asset Management Limited (‘MUBGAM’) is a joint venture company between Mitsubishi UFJ Trust & Banking Corporation and Baillie Gifford Overseas Limited. MUBGAM is authorised and regulated by the Financial Conduct Authority.
Australia
Baillie Gifford Overseas Limited (ARBN 118 567 178) is registered as a foreign company under the Corporations Act 2001 (Cth) and holds Foreign Australian Financial Services Licence No 528911. This material is provided to you on the basis that you are a “wholesale client” within the meaning of section 761G of the Corporations Act 2001 (Cth) (“Corporations Act”). Please advise Baillie Gifford Overseas Limited immediately if you are not a wholesale client. In no circumstances may this material be made available to a “retail client” within the meaning of section 761G of the Corporations Act.
This material contains general information only. It does not take into account any person’s objectives, financial situation or needs.
South Africa
Baillie Gifford Overseas Limited is registered as a Foreign Financial Services Provider with the Financial Sector Conduct Authority in South Africa.
North America
Baillie Gifford International LLC is wholly owned by Baillie Gifford Overseas Limited; it was formed in Delaware in 2005 and is registered with the SEC. It is the legal entity through which Baillie Gifford Overseas Limited provides client service and marketing functions in North America. Baillie Gifford Overseas Limited is registered with the SEC in the United States of America.
The Manager is not resident in Canada, its head office and principal place of business is in Edinburgh, Scotland. Baillie Gifford Overseas Limited is regulated in Canada as a portfolio manager and exempt market dealer with the Ontario Securities Commission ('OSC'). Its portfolio manager licence is currently passported into Alberta, Quebec, Saskatchewan, Manitoba and Newfoundland & Labrador whereas the exempt market dealer licence is passported across all Canadian provinces and territories. Baillie Gifford International LLC is regulated by the OSC as an exempt market and its licence is passported across all Canadian provinces and territories. Baillie Gifford Investment Management (Europe) Limited (‘BGE’) relies on the International Investment Fund Manager Exemption in the provinces of Ontario and Quebec.
Israel
Baillie Gifford Overseas is not licensed under Israel’s Regulation of Investment Advising, Investment Marketing and Portfolio Management Law, 5755-1995 (the Advice Law) and does not carry insurance pursuant to the Advice Law. This material is only intended for those categories of Israeli residents who are qualified clients listed on the First Addendum to the Advice Law.
74937 10040219
