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There are three public companies focused on self-driving trucks: Embark (EMBK), Aurora (AUR), and Tu Simple (TSP). All three of them have been beaten down harder than I was after I asked out my first crush.
This is despite trucking prices rising and every other story on the news being about supply chain and driver shortages. There is a massive truck driver shortage (80,000 extra drivers are needed) https://www.vox.com/22841783/truck-drivers-shortage-supply-chain-pandemic and trucking is growing fast 4.7% globally https://www.prnewswire.com/news-releases/global-freight-trucking-market-to-reach-2-7-trillion-by-2026--301320057.html
The tech needed for these companies to succeed is here and far simpler than what self-driving cars need. It's almost all highway driving which is fancy line following with a bit of don't hit the person in front of you. TSP recently started to do demo runs without anyone in the vehicle (this is a big moment and proves they are confident in their tech) https://www.youtube.com/watch?v=dGglN4J9zZ0
If these companies get their tech working even only in ideal conditions on a few roads they will be able to make billions of dollars a year with very limited overhead.
You want fundamentals? We got those
Their are over 3.5 million human truck drivers in the U.S. https://stronggroupusa.com/how-many-truck-drivers-are-there-in-usa/. Each makes an average of 77k a year https://www.indeed.com/career/truck-driver/salaries. If just a fraction of the trucks in America were operated by self-driving truck companies their profits would be enormous.
Trucking is a $700B market in the U.S. That means that if one of these companies captures 1% of the market that is $7B. Put a 25x multiplier on that you get $175B valuations. If one of these companies takes 10% of the market that is almost $2 Trillion market cap. https://www.statista.com/statistics/922817/trucking-industry-united-states-total-revenue/
Embark estimates almost $2 billion in Gross Profit in 2025 (that is more revenue than the company is worth right now)
Aurora is estimating a more conservative $1.3B in 2027
But wait this is WSB you only want to invest in companies with the potential for a short squeeze? We got you covered
NOTE all numbers are based on December 31st numbers before the recent drop, new numbers come out tomorrow
Want to follow insiders Self driving trucks to have those too