Five-year-old self-driving truck startup Embark Trucks Inc. said Wednesday it might merge with special purpose acquisition company Northern Genesis Acquisition Corp. II during a deal valued at $5.2 billion.
Embark Trucking is yet one more autonomous trucking startup but it’s its own unique approach. rather than manufacturing and operating a fleet of trucks, Embark offers autonomous driving software as a service. Carriers and fleets pay per kilometer for a subscription fee to access it. the corporate includes carry Mesilla Valley Transportation, Bison Transport, and partners like Anheuser-Busch InBev and HP. Carriers purchase trucks that have compatible hardware directly from the OEMs and Embark has designed its system to be “platform agnostic” across multiple components and makers. It claims that it can simulate up to 1200 60 second scenarios for the behavior of the opposite vehicles on the road.
The plan makes Embark the third robot truck developer to go for the general public markets, following Simple which listed shares on Nasdaq via a standard IPO in April, and PlusAI Corp.’s announcement in May that it might list shares through a SPAC merger with Hennessy Capital Investment Corp. Unlike developers of self-driving Robo taxi technology, Embark, Simple, and Plus are ready to generate modest amounts of revenue by hauling loads for commercial customers as they refine their software and sensors. In Embark’s case, those include Anheuser-Busch InBev, HP, Werner Enterprises, Mesilla Valley Transportation, and Bison Transport.
“We are solely focused on solving the matter of self-driving software for trucking since Embark’s CTO, Brandon Moak, and that I founded the corporate in 2016,” said co-founder and CEO Alex Rodrigues. “After a few years of R&D on the world’s most mature self-driving truck software stack, we decide to enable carrier operation of self-driving trucks within the U.S. sunbelt beginning in 2024. Following the transaction, with Northern Genesis, we expect to possess a fund that fully funds this commercialization plan, then some.”
Funds from the SPAC merger are needed as Embark works to compete with more heavily funded players within the robot trucking space, including Alphabet Inc.’s Waymo. additionally, to TuSimple and Plus, other competitors include Kodiak, which recently added Bridgestone as an investor, and autonomous tech developer Aurora Innovations.
Embark is targeting annual revenue of $867 million in 2024 and $2.7 billion by 2025, consistent with its investor presentation deck. Details of its 2020 and certain 2021 revenue weren’t a part of its SEC filings as of Midsummer Eve.
Automating big rigs to handle highway driving increasingly is seen as a somewhat earlier commercial application for self-driving technology, due to the simpler operating environment of highways versus city streets. A shortage of long-haul truck drivers within the U.S. and growing demand for shipping also make it a potentially lucrative application. Still, the challenges of safely operating an 80,000-pound vehicle traveling at highway speed and contending with unpredictable weather and traffic conditions have yet to be entirely solved.
The addition of Chao, a career federal bureaucrat, former U.S. labor secretary, and wife of Senate legislator Mitch McConnell, is additionally likely to profit Embark as federal regulations governing the commercial use of autonomous vehicles and robotic trucks form over subsequent few years.