BYD Co. Ltd. is getting into the delivery vehicle business.
The Chinese electric vehicle manufacturer has partnered with Nuro Inc., a Silicon Valley startup, to develop and build that company’s third-generation autonomous delivery vehicle.
Employees at BYD’s Lancaster plant will provide hardware such as the Blade Battery, electric motors, electronic controls and displays for human-machine interaction.
“We’ll get the kits from China and then we’ll assemble them,” said Frank Girardot, a spokesman for BYD. “It’s really the drivetrain, the batteries and the chassis.”
The assembly on the Nuro vehicle is expected to begin in the third quarter of this year, Girardot said.
“We are very excited about this partnership,” he added. “We’re glad that we are able to do it at our facility in Lancaster. It is an example of how we are growing our business in L.A.”
Stella Li, executive vice president of BYD Co. and president of BYD North America, said the company will leverage the manufacturing capacity of its Lancaster facility by finishing assembly on globally sourced hardware components to support Nuro and bring more jobs to the Antelope Valley.
“Together we will build this autonomous delivery vehicle, with the mutual goal of creating a safer environment on streets across the United States,” Li said in a statement.
For its part, Nuro will integrate technologies such as autonomous driving, control modules and sensors and do final assembly on the vehicles and test them in the Las Vegas area.
The startup broke ground on a 100,000-square-foot manufacturing facility in North Las Vegas in November. Both it and the test track and a 13,000-square-foot structure on 74 acres at the Las Vegas Motor Speedway are expected to be operational later this year.
Nuro is making a $40 million investment into the Southern Nevada economy. It will create 250 skilled jobs between the manufacturing plant and the test track.
“It’s one thing to introduce new jobs to the state – and it’s another thing to introduce high-quality careers to our community,” said Nev. Governor Steve Sisolak in a statement. “We’re pleased to welcome Nuro to Southern Nevada and are especially excited for the careers they’ll be offering that will have long-term benefits for our community.”
Judy Kruger, senior director of strategic initiatives and industry cluster development at the Los Angeles County Economic Development Corp., is familiar with both BYD and Nuro.
“These are two companies that we have been tracking for a while,” Kruger explained.
She said she was delighted that Nuro and BYD are partnering up on the delivery vehicles.
“They (Nuro) are a California company partnering with a California company to do jobs in manufacturing and fit into the niche of personal, autonomous delivery,” Kruger said. “The market share for autonomous personal delivery services, depending on what source you cite, is just exponential growth.”
According to an August 2020 report from Allied Market Research in Portland, Oregon, the global personal autonomous delivery market was forecast to be valued at about $12 billion last year and is projected to reach $84.7 billion by 2030, registering a compound annual growth rate of 24.4 percent.
North America was anticipated to be the highest revenue contributor, accounting for almost $5 billion by 2021, and is estimated to reach about $40 billion by 2030, according to a release from Allied.
Nuro already has done two previous versions of its autonomous delivery vehicle – the R1 and the R2.
The R2 was the first autonomous vehicle to receive an exemption from the National Highway Traffic Safety Administration of the U.S. Department of Transportation. The two-year, temporary exemption is from three provisions of the Federal Motor Vehicle Safety Standard on low-speed vehicles.
“Nuro was the first company to be granted a commercial deployment permit by the State of California, and we comply with applicable regulations for autonomous vehicle operations,” the company said on its website.
Nuro announced in December that it had partnered with 7-Eleven Inc., the global convenience store chain owned by Seven & I Holdings Co. Ltd. in Tokyo, to provide delivery in certain areas of Mountain View in Northern California.
The announcement followed a number of others – Nuro partnering with Kroger Co. in 2018 to deliver groceries in Scottsdale, Arizona for a pilot program that initially used a Toyota Prius before switching to the R1; with Domino’s Pizza Inc. to deliver pizzas in parts of Houston in 2019; and with CVS Pharmacy Inc. to deliver prescriptions and other items starting in May 2020.
In October 2020, Nuro announced it was testing the R2 in three different states – California, Arizona and Texas.
And last June, the company announced a partnership with FedEx Corp. to deliver packages.
“We’ve already begun testing with FedEx in Houston, learning about their operations and getting their feedback,” Dave Ferguson, co-founder of Nuro, wrote on a blog post at the company’s website. “Over time, we’ll test and deploy Nuro’s robots together and grow to a scale that will be transformative for logistics and for everyday life.”
Nuro selected BYD as its manufacturing partner for a number of reasons, but first because its North American operation is part of the one of the world’s largest original equipment manufacturer networks, a spokesperson said in an email to the Business Journal.
“By partnering with BYD North America, which has facilities in the U.S., … we will help create additional high-tech manufacturing jobs in the United States in our supply chain,” the spokesperson said.
And secondly, because both Nuro and BYD North America are focused on safety.
“This is especially important now, given the recent upward trend in highway fatalities,” the spokesperson said in the email. “Automated delivery vehicles are a vital step towards reducing traffic fatalities caused by human-driven vehicles.”
The third-generation delivery vehicle improves on the design of the first two.
The spokesperson said that the new model is about 20 percent smaller in width than the average passenger car. The significantly smaller footprint gives bicyclists and pedestrians more room to maneuver alongside the vehicle.
The vehicle’s two compartments can fit about 24 bags of groceries and handle almost 500 pounds of items.
“Modular inserts that fit inside the compartments allow for heating and cooling, with a range of temps from 22 degrees to 116 degrees, which means pizza stays warm and soda stays cool,” the spokesperson wrote in the email.
Kruger, of the Los Angeles County Economic Development Corp., said that what the partnership with Nuro means for BYD is that they are expanding their partnerships as well as their market space and continuing to be an anchor in the region.
For the LAEDC, it is a triple win, she said.
“It’s meeting climate goals, it is good jobs, and it’s innovative technology keeping California and its leadership role in all things autonomous, all things clean and all things electric,” Kruger added.
Other states in the country follow the California model and the LAEDC is continually contacted by autonomous and electric vehicle companies looking to expand into either a physical presence in the state or a market share presence, she continued.
For Girardot, the types of vehicles the company produces are revolutionary in the same way the printing press was, he said.
“To think that we have a union workforce up in our Lancaster factory that is building these – that says a lot about Los Angeles County’s ability to have the workforce and the space to do these types of projects,” Girardot added.