Uber Technologies said Thursday it will make "multi-hundred-million dollar investments" in both Nuro and Lucid to develop a new robotaxi service. The news sent shares of Lucid soaring while Uber stock closed lower.
Uber aims to deploy 20,000 or more Lucid electric-vehicles equipped with Nuro's self-driving system over the next six years, according to a news release. The companies expect to launch the services in an unnamed major U.S. city late next year. Uber is reportedly investing $300 million in Lucid as part of the deal.
The service will utilize Lucid's new Gravity SUV and the Nuro Driver Level 4 autonomy system. The cars will be owned by Uber and available exclusively through its app.
Uber Chief Executive Dara Khosrowshahi said in a news release that the partnership will help "Safely bring the magic of autonomous driving to more people across the world."
Uber Stock Down Despite New Deal
With robotaxi services from Waymo and Tesla competing for share in some U.S. cities, Uber has been racing to partner up with robotaxi providers. Earlier this week, Uber said it would offer robotaxis from China tech giant Baidu in some cities in the Middle East and Asia.
The ride-hailing provider has partnered with Google-backed Waymo to offer its robotaxis to Uber users in Austin and Phoenix, with an Atlanta partnership launching soon. Other partners include Pony AI, WeRide, May Mobility and Volkswagen.
In general, the strategy has helped Uber investors shake-off robotaxi concerns. Uber stock is up nearly 50% year to date after slumping late last year.
But Uber stock fell a fraction to close at 90.34 on the stock market today. Shares have now fallen seven straight trading days. Uber stock broke below the stock's 21-day line on Wednesday and is approaching a test of its 50-day moving average.
Lucid stock, meanwhile, soared more than 42% Thursday.
Wedbush Analyst: Uber Has 'Weak Hand' For Robotaxis
In a note to clients, Wedbush analyst Scott Devitt said the deal with Lucid and Nuro "highlights Uber's weak hand" in the transition to autonomous vehicles. Devitt is neutral on Uber stock and has previously warned investors that the company faces risks from Tesla and Waymo.
"To us, this feels like the search equivalent of doing a deal with AskJeeves, Overture, or Infoseek back in the day to protect against Google on the horizon," Devitt wrote. "Meanwhile, Tesla and Waymo just keep building AI infrastructure and data collection."
The costs of buying the vehicles and investing in both Nuro and Lucid will "impair the capital efficiency story" that investors bullish on Uber stock often cite, Devitt said There is also "execution risk," Devitt added, as he expects Lucid could need further capital to deliver on Uber's production requests.
Stifel analyst Mark Kelley, who rates Uber stock a buy, was more positive in his commentary, which was sent in a client note Thursday afternoon. He said it highlighted how AV rideshare offerings are likely to be deployed across incumbents like Uber, along with AV-focused platforms like Waymo.
"Management has previously expressed that it would 'take some balance sheet risk in order to catalyze the industry,'" Kelley wrote, referring to Uber. "We believe any balance sheet risk relating to fleet ownership/operation would likely be only temporary and does not pose any long-term risk."
