Building an Autonomous Trucking Business
The conversation begins with Don discussing the last 18 months in autonomous trucking and why Kodiak did not SPAC.
We had multiple SPAC offers, but at the end of the day we felt like we just didn’t have the metrics, what didn’t have what it took to be a public company.– Don Burnette
Don and the team at Kodiak understood the difference between being a private company and a public company. Don, along with the team and the board, made the decision to stay private as they felt it would put Kodiak in the best position for growth, benefiting investors, employees and the entire company.
What you are seeing not just in the AV market, but beyond the AV market. You are are seeing a lot of blowback from companies that do not have any of the metrics that public investors want to see and while I think there was some hype and excitement early on in the SPAC craze cycle if you will call it, that excitement, that hype, that fervor has essentially evaporated and know companies are left with their fundamentals and unfortunately those fundamentals are not really strong.– Don Burnette
Today there are 250 registered autonomous trucks available for deployment, while there are currently 4 million Class 8 trucks in operation. With less than a 1% market share, the time for an autonomous trucking company to go public is not there as the technology currently does not have the marketshare and/or the profitability to succeed as a public company when compared to the traditional trucking industry. Don recognized this fact and resisted the temptation of taking Kodiak public via SPAC.
I definitely think that Kodiak’s decision to stay private was the right one in the end.– Don Burnette
In order to stay a private company in a challenging economic environment, you have to have financial discipline. Along with the financial discipline, you have to have the right team that works hard and does not get distracted.
At Kodiak we have been focused on over-the-road long-haul trucking, autonomy and that was our mission statement on day one and that’s still our mission for the company almost five years in. That focus and not allowing ourselves to get distracted has been a big component of our success.– Don Burnette
As part of this discipline, Kodiak has never done a free run. All of the freight that the company has hauled since day one has been paid. On day one, Don made the decision to run Kodiak as a business, not a science project. This decision has been rewarded in terms of partnerships and the revenue that Kodiak is generating from hauling freight.
With all of the pieces in place, Kodiak is beginning to scale their business and preparing for driverless operations. To achieve driverless operations, Kodiak has developed a redundant safety critical system that ensures the safe operation of the truck.
Driverless operations will first be rolled out in the southern part of the United States partly due to the weather and the updated infrastructure. In addition to scaling autonomous trucking across the United States, Kodiak is working with the Department of Defense to develop autonomous technology that can save lives.
Wrapping up the conversation, Don discusses the future of the autonomous trucking industry.
Recorded on Thursday, February 16, 2023