Investors go back to basics with simpler self-driving vehicles

An autonomous ‘Auto-Pod’ vehicle is seen inside the Aurrigo factory in Coventry, UK on Jan 18, 2023.COVENTRY, England — Developing fully autonomous vehicles that can go everywhere has proven harder and more expensive than expected, but investors are continuing to fund startups that target simpler self-driving vehicle solutions far removed from pedestrians and other vehicles operated by unpredictable humans.

Earlier promises made by robotaxi companies of operating fleets of vehicles by the early 2020s have fallen well short. When Ford Motor Co and Volkswagen AG pulled the plug on self-driving unit Argo AI in November, Ford CEO Jim Farley said a profitable robotaxi business was still many years away. Ford rival General Motors Co burned through nearly US$2 billion last year at its robotaxi unit Cruise and said it anticipates spending even more in 2023.

AV truck technology firm Aurora, for instance, has a market value of US$2 billion, a fraction of the US$12.5 billion when it went public in 2021 via a special-purpose acquisition company .Faced with the long-term conundrum that people and robots do not mix well, investors have gone back to basics, targeting less-complex, less cash-intensive forms of autonomy with a clearer path to payback, operating at lower speeds with little to no traffic.

"The shift in investment ... toward off-road/more structured environments is a very real one given the lack of progress in passenger AVs the high capital requirements involved," said Asad Hussain, research partner at private equity firm Mobility Impact Partners.Last month, British AV software startup Oxbotica announced US$140 million in funding to roll out more products, starting with AVs operating in mines and remote areas.

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