There was a period of time when self-driving cars and autonomous trucking were buzzing. People believed that it would not be long before vehicles were driving themselves, and plenty of companies like Embark promised just that. However, reality started to sink in when more than $100 billion was poured into the technology without any results.
Many companies have since gone under, and while Embark held on longer than some, it is now winding down operations. It marks one of the fastest declines of the time, going from a $5 billion valuation to closing its doors in just 16 months.
Embark Announced the Winding Down of Operations
Embark Trucks announced that it would be winding down operations and laying off most employees Friday in an email sent to employees by CEO and co-founder Alex Rodrigues.
In the email, Rodrigues said, “Unfortunately, after thoroughly evaluating all alternatives, we have been unable to identify a path forward for the business in its current form. Although there are many external things that we wish had gone differently, ultimately this outcome is my responsibility.”
“Today, having exhausted all alternatives, we are taking the incredibly difficult step of laying off ~70% of the company, and shutting down our SoCal and Houston offices,” he said in the email.
The closure is taking place a mere 16 months after the remarkable SPAC merger that had an initial market capitalization of $5.16 billion. It was a massive deal, especially for a pre-revenue company, but despite the hype, it was unable to land on its feet.
Embark Started Strong but Fizzled Out
The merger plan made everything appear great for Embark. The company raised around $614 million through the merger plan, and it traded close to the target valuation for a couple of months after it made its Nasdaq debut. However, none of that lasted. The markets cooled, and by 2022, the shares quickly fell in value.
To make matters worse, there was no revenue to prop Embark up, leaving it with no earnings or profitability. Everything was reliant on optimism and hype about the technology and its potential. It has been a problem faced by many in the autonomous space, including Tesla, whose self-driving tech has not succeeded in the way people envisioned.
Other Autonomous Companies Also Flopped
Embark is not the first casualty in the autonomous trucking space. Even Uber failed after purchasing Otto, an early startup focused on self-driving trucks. They bought the company in 2016 for $680 million before closing things down a few years later, choosing to abandon self-driving trucks and focus on cars.
Another to falter was TuSimple, which has faced legal trouble and more along its autonomous journey. The startup went public with a valuation of over $8 billion but now has a market cap of around $460 million.
There is also Aurora, which came out with a massive market cap of around $13 billion in 2021. However, things have fallen significantly, with the company down more than 90%.
There are many other companies that have tried and failed to perfect or even make the technology work. Embark might be the latest to fall, but it will likely not be the last to go before the technology succeeds, if it ever does.