Despite significant advancements in technology and increasing consumer interest in sustainable transportation solutions in the autonomous electric vehicle (AEV) market, several key issues persist presenting barriers to market penetration and profitability for companies operating in this sector:

Application: Most existing AEV companies are focusing on the consumer market by retrofitting sensors onto existing consumer vehicles and enhancing ADAS capabilities. However, these vehicles are not purpose-built for autonomous operation, thus falling short of true self-driving capabilities. Although some companies have plans for purpose-built vehicles in the future, they would have to redo all the real-world testing as consumer vehicles have vastly different driving patterns, vehicle dynamics, passenger and safety requirements, and sensor/tech specifications, compared to purpose-built shuttles. Moreover, the presence of non-autonomous vehicles on the roads adds complexity and variables that the current state of autonomous software cannot safely handle, unless there are dedicated routes supported by local authorities.

Changing Trends: Unforeseen disruptions such as the Covid-19 pandemic, remote work trends, and economic shifts, have significantly altered the transportation landscape in the past five years. As fewer people own personal vehicles, particularly in urban areas, public transit systems are struggling to adapt and provide accessible and reliable solutions. Additionally, public transit has developed a negative perception among the growing middle-class consumer as an unsafe and unreliable option. This has led to an average of 5 occupants per standard city bus in sprawling cities like DFW.

Cost and Affordability: The high initial cost of electric and autonomous vehicles remains a significant barrier for many consumers. While the total cost of ownership over the vehicle's lifespan may be lower than traditional internal combustion engine vehicles, the upfront cost often presents a deterrent, particularly in price-sensitive market segments. Addressing cost barriers and enhancing affordability is essential for expanding the customer base and achieving economies of scale in production.
Technological Reliability and Safety: While advancements in autonomous driving technology have been substantial, concerns regarding the reliability and safety of these systems persist. Incidents involving autonomous vehicles, such as accidents or system malfunctions, undermine public trust and confidence in the technology. Ensuring the robustness and safety of autonomous systems is crucial for widespread adoption and market acceptance.

Addressing these challenges requires a multifaceted approach involving collaboration among industry stakeholders, policymakers, and technology innovators. By overcoming these obstacles, the autonomous electric vehicle industry can realize its potential to revolutionize transportation, reduce emissions, and create a more sustainable future.

Here is an overview of our current POs as part of our commercialization strategy, which focuses not only on municipalities but also on private markets like campuses and universities.

- JP Morgan: 1-vehicle alpha pilot deployment for their Dev Up conference on November 7th. This is a month-long paid pilot at our standard rate of $30K per month per vehicle.
- City of Arlington: Verbal agreement (official offer pending) for an $8 million grant from the EDC of Arlington to build a final assembly facility and fund the fleet deployment of 25 vehicles. Rate TBD.
- County of Dallas: Received a letter of support for a one-vehicle pilot deployment for government employee transportation.
- Deloitte University: Currently negotiating a 2-5 vehicle deployment for their campus in Grand Prairie.
- Clarkson University: A year-long paid pilot with 1 vehicle at $33K per month, starting in September 2024.
- University of Delaware: Negotiating A 1-year, 1-vehicle paid pilot deployment at $30K per month.
- Sacramento State University: In negotiations for a 1-vehicle, 1-year deployment.
- Georgia Tech and Peachtree Corners: In negotiations for a year-long pilot with 1 vehicle.

This should provide some insight into our planned deployment strategy with municipal and private entities.