Autonomous Vehicle Startup Nuro Reveals its Newest Model for Last Mile Deliveries, Plans to Deploy Millions of Them

Imagine a future where compact and electric autonomous delivery vehicles safely traverse cities and neighborhoods delivering everything from meals, groceries and parcels as a more sustainable way of making last-mile deliveries. Autonomous vehicle startup Nuro envisions this future and the company unveiled its third-generation model on Wednesday. 

The California company aims to deploy millions of its unmanned delivery vehicles in the future to be used for on-demand delivery and e-commerce.

The new flagship model is simply called "Nuro", while the prior generation versions were named the R1 and R2.

Nuro said its newest vehicle is designed to carry even more cargo than the previous two models. The vehicle has twice the cargo volume of the company's second generation R2 vehicle, which enables more deliveries per trip, according to Nuro. 

The vehicle is outfitted with lockable compartments to carry groceries, pizza, meals, dry-cleaning, prescriptions, or similar items. Upon delivery, customers can use a smartphone app to unlock one of the secure compartments to access their orders.

The automotive production-grade vehicle will also feature modular inserts for customizable storage and new temperature-controlled compartments to better keep groceries at the optimal temperature while in transit. The vehicle was designed from the ground up to handle the rigors of commercial delivery with a larger battery that can last all day without needing a charge.

Nuro's latest model is being built in partnership with BYD North America. Final assembly and testing will be at Nuro's new $40 million manufacturing facility and test site in southern Nevada.

Nuro said its facilities in Arizona have the capacity to manufacture and test "tens of thousands" of delivery vehicles per year to ensure they are ready for deployment. 

As part of the agreement, BYD North America will assemble third generation Nuro AV with globally sourced hardware components for the vehicle platforms, while Nuro will complete the final steps of manufacturing and make the autonomous vehicles ready for deployment.

"BYD attaches great importance to this collaboration with Nuro. As one of the world's leading electric vehicle manufacturers and a turnkey solution provider, BYD will leverage the manufacturing capacity of its Lancaster facility to support Nuro and bring more jobs to

California," said Stella Li, Executive Vice President of BYD Co. Ltd. and President of BYD Motors Inc.

Unlike many other companies working on self-driving vehicles to carry passengers, Nuro is building a fleet of small unmanned cargo vehicles for last-mile deliveries. Since the vehicles aren't intended to carry people, they don't require a steering wheel, pedals, windshield wipers, seat belts, mirrors, airbags or any other expensive mandated safety systems required for passenger vehicles sold in the U.S.

Nuro's small delivery vehicles are mainly designed to be used by retailers, restaurants and grocery stores for on-demand e-commerce deliveries. The vehicles are designed to operate at speeds below 25 mph on public roads just like full-size passenger vehicles.

Last year, Nuro was granted a permit from the state of California to deploy its autonomous vehicles on public roads in Silicon Valley without a human backup driver, which might help the company to scale its autonomous delivery business.

Nuro is already testing its autonomous vehicles in pilot programs with FedEx, Domino's Pizza and convenience store chain 7-Eleven. Nuro also formalized a commitment to leverage the company's third-generation vehicle for autonomous groceries deliveries with Kroger, which is one of its investors.

"As America's largest grocer, Kroger formed a strategic collaboration with Nuro in 2018," said Yael Cosset, Kroger's Senior Vice President and Chief Information Officer. "We continue to invest in the company as a testament to its industry-leading technology and our commitment to innovation."

Nuro's partnership with Domino's in Texas is also providing valuable feedback for the two companies on how autonomous food delivery might work in the future.

Nuro's autonomous vehicles are being used to make grocery deliveries for Kroger.

In November, Nuro announced its raised $600 million in its latest funding round. The latest round brought in Google's parent company Alphabet Inc. as a new investor. 

Nuro said it has signed a five-year strategic partnership with Google Cloud to support self-driving simulation and data management for its fleet of delivery vehicles.

Google Cloud said it was also looking to help Nuro optimize the way it makes autonomous deliveries for retailers and other businesses, with the aim of transforming local commerce.

Nuro's latest funding round was led by Tiger Global Management. It increased the startup's valuation to $8.6 billion.

Other investors participating in the round were Toyota Motor Corp's Woven Capital, SoftBank Group's Vision Fund 1 and Kroger.

In addition to unveiling its new vehicle, Nuro also announced it will use 100% renewable energy for all vehicle charging and facilities for the first time starting this month. 

The company is releasing its first sustainability highlights report, covering actions it has taken toward sustainability, as well as its upcoming plans for the year ahead.

Nuro was co-founded in 2016 by Dave Ferguson and Jiajun Zhu. Both founders were former Google engineers. Zhu was one of the founding engineers of Google's self-driving car project, which is now known as Waymo. The two met when Ferguson joined Waymo in 2011 as a principal machine learning engineer.

The company is headquartered in Mountain View, California.