- Paccar and the autonomous driving startup Aurora have entered into a strategic partnership to develop self-driving trucks.
- Paccar’s sales fell significantly in 2020, despite the fact that the share was up over 9% year over year.
- Competition in the trucking industry is intensifying with new entrants and industry veterans making waves.
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Paccar shares rose up to 3% on Wednesday morning after the tractor-trailer manufacturer announced a strategic partnership with Amazon-backed autonomous startup Aurora.
The two companies want to combine their respective know-how to develop, test and sell tractor units powered by Aurora’s autonomous driving technology.
“Paccar is excited to partner with Aurora for its industry-leading autonomous driving technology and impressive team,” said Preston Feight, Paccar’s chief executive officer, in a press release on Tuesday. “This strategic partnership complements Paccar’s world-class commercial vehicle quality, technology and innovation.”
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Based in Bellevue, Washington, Paccar is a world leader in the design and manufacture of high quality light, medium and heavy trucks. The company also provides advanced powertrains, financial services and information technology to customers, and sells truck parts.
Aurora has been in the game of self-driving technology since 2017 when former Google autonomous engineer Chris Urmson, former Tesla self-driving director Sterling Anderson and Drew Bagnell of Carnegie Mellon came together to form the company.
Since 2017, Aurora has been taking steps to create the first fleet of self-driving semis.
In December, Aurora acquired the self-driving unit from Uber for which it gave up 26% equity. The company then expanded testing to public roads in California, Pennsylvania, and Texas, focusing on long-haul commercial travel.
Aurora’s technology is now being combined with the Peterbilt 579 and Kenworth T680 tractors in Paccar.
Despite the positive news, PACCAR and Aurora will face stiff competition going forward, not just from big names like Tesla.
Alphabet’s Waymo announced plans to develop tractor units with Daimler last year, and self-driving startup TuSimple announced that it is teaming up with US truck maker Navistar to build large-scale driverless systems by 2024.
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The news of a strategic partnership with Aurora should be welcomed by Paccar shareholders. The company’s sales have seen a decline recently, down roughly 24% year over year in the third quarter. This is based on the latest information from the SEC.
Additionally, Paccar made just $ 2.57 per share for the nine months ended September 30, 2020, compared to $ 5.34 per share for the same period in 2019.
Paccar currently trades at around $ 92 per share and has a market capitalization of $ 30 billion.
The company has 10 “buy” ratings, 14 “neutral” ratings, and six “sell” ratings from analysts.