Aurora Innovation (NASDAQ:AUR) shares dropped 3% on Tuesday following the release of a short report from Kerrisdale Capital questioning the autonomous trucking company’s commercial prospects.
In its analysis, Kerrisdale argued that Aurora’s autonomous trucking model faces substantial obstacles that could prevent it from becoming a sustainable business. The short seller claimed that the technology would likely be restricted to hub-and-spoke routes, where only highway segments could be driven autonomously, while local deliveries would still require human drivers.
According to Kerrisdale, this hub-and-spoke approach would make autonomous trucking “slower, more expensive, and less reliable than point-to-point manned trucking for any freight moving under 1500 miles.” The report estimated Aurora’s actual market opportunity at roughly $10 billion—far below the company’s claimed 200 billion miles and less than its current $13 billion market capitalization.
The report also raised concerns about infrastructure, noting that Aurora’s strategy relies on third parties building the hubs necessary for autonomous operations. Additionally, Kerrisdale suggested that executives at Aurora’s OEM partners anticipate autonomous trucks will cost at least 50% more than comparable manned vehicles, contradicting Aurora’s assertions of cost parity.
Kerrisdale concluded that Aurora investors “should expect a decade of continuous dilution before arriving at a dead end,” pointing to the company’s challenging economics and the need to share profits with truck manufacturers, competitors, and service providers.
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