The Road to Profitable Autonomy
The conversation begins with Alan and Grayson discussing AB 316 — the future of autonomous trucking in California. If AB 316 is signed into law, autonomous trucks will cease to operate in California leading to negative economic consequences.
The State wants to support the tech and get it out there, and sees the benefits of that. But at the same time you have active opposition from a very powerful labor group that represents a lot of truckers in the State of California.– Alan Ohnsman
The conversation expands from policy to the future of AI and Gatik, a middle-mile autonomous trucking start-up that is on the road to profitable autonomy.
Gatik is a company that did not raise billions of dollars, and Gatik did not come out of the gate saying were going to use autonomy for everything. We are going to do robotaxi, we are going to do trucking, we are going to do food deliveries, you name it, we are going to do it. They focused on one thing — middle-mile delivery from a distribution center to a large retail store, that’s it. Nothing else.– Alan Ohnsman
Compared to their peers that have raised billions in capital, Gatik has raised a mere modest $120 million. To achieve their goals, the company does not need billions as they are highly disciplined when it comes to operating the business. For every contract that Gatik signs with a customer, each vehicle that goes into service is contractually guaranteed revenue of $200,000 per year.
For every 100 vehicles the company puts into service, the company will generate $20 million in yearly revenue. At this time, Gatik currently has 50 vehicles in service, generating $10 million in yearly revenue. Gatik is forecasting that the company could potentially be profitable within as little as two to three years (2025-2026). As the company ramps up towards profitability, they are going to gradually start expanding to highway driving in addition to city streets.
Their goal is to overtime, they will move into highway trucking. They will move into Class-8 trucking, they will move into other types of delivery services that they are not doing now, and it’s going to be this gradual evolution of the business. All of it is premised on the fact that it has to a revenue generator.– Alan Ohnsman
Looking to the future, Gatik will not explore a potential IPO until the company is profitable on a GAAP basis. Rounding out the conversation, Grayson and Alan discuss the autonomous trucking industry as a whole and the Waymo Via shutdown.
Recorded on Monday, August 28, 2023