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Embark Technology Inc. saw its losses rise in the first quarter as the self-driving trucking technology company spent more of its capital on research and development.
The San Francisco-based company said its net loss widened 117% to $18.4 million from $8.5 million in the same quarter a year earlier. However, diluted losses per share narrowed to 4 cents from 18 cents.
Embark spent $18.7 million on research and development in the first quarter, up from $6.2 million in the same period a year earlier.
As a startup, Embark has no revenue yet. Embark does not expect to generate significant revenue until 2024, when it begins to market its self-driving services and software.
It ended the quarter with $244.5 million in cash and cash equivalents. Analysts expect it to burn $125 million to $145 million of its cash this year.
In a May 10 conference call with industry analysts and investors, Embark executives said the cash was enough to get the company to the point where it would collect revenue.
“We have sufficient and ample track to execute our milestones,” Chief Financial Officer Richard Hawwa said, adding that the business has room to scale up and down to meet cash flow needs.
CEO Alex Rodrigues said the company has achieved “a number of industry firsts” in recent months, including beginning 24-hour testing on Interstate 10 in Texas and demonstrating the ability to its Embark Driver technology to navigate successfully in snowy conditions.
Expanding the parameters in which an autonomous truck can operate is particularly important as Embark works to commercialize its self-driving system, he said.
Road tests in Montana and weather analyzes have shown that the Embark system operates safely in snowfall rates of up to one-sixth of an inch per hour and with 1-inch snow accumulation on the road for 3 hours, the company said.
“Those [are] conditions that cover the vast majority of snowy weather,” Rodrigues said.
The cornerstone of Embark’s autonomous driving system is what the company calls Vision Map System. It relies on sensors to understand road conditions rather than preloaded maps. Embark said it works best to adapt to changes in real-world road environments.
Embark is working with several partners to implement a transfer point system. Human drivers will be responsible for transporting goods the first and last miles in and out of hubs adjacent to the highway. Self-driving trucks would then transport freight on major trucking lanes between transfer points.
The company said earlier in May that US Xpress would add some of its terminals to Embark’s planned network. US Xpress will start with two terminals in the Sunbelt states that would create a high-volume route for autonomous transportation, Rodrigues said.
Embark is working with Alterra, a real estate company, and Ryder to build its network of transfer points. Alterra is identifying sites along major trucking routes that Ryder will operate as transfer points. Alterra is in the process of buying the first property, Rodrigues said.
Eventually, the network is expected to stretch from California west along the Sunbelt through Arizona and Texas and into Florida and North Carolina.
Embark’s strategy is to build a manufacturer-independent system that can be used in multiple truck brands. Carriers and shippers would choose the truck brands they like for their fleets and own and operate the vehicles, using Embark’s technology and network.
Embark runs several test programs and operates 18 of its own trucks. Its initial partners also operate trucks with Embark technology.
In November, the San Francisco company went public after a merger with Northern Genesis Acquisition Corp 2. It trades under the ticker symbol EMBK. The company generally refers to itself as Embark Trucks.