Amazon-backed Aurora just inked a major deal to put its self-driving software in semi trucks

• Aurora and truck maker Paccar said Tuesday they have inked a deal to develop self-driving semi trucks.
• The Amazon-backed autonomous vehicle startup has long said its first product would be a truck.
• Aurora's rivals have also teamed up with truck makers recently as the driverless truck race heats up.

Autonomous vehicle startup Aurora on Tuesday announced a key partnership that brings it closer to its goal of deploying self-driving trucks.

The Amazon-backed firm is teaming up with Paccar, a major truck manufacturer that builds light-, medium-, and heavy-duty trucks under well-known nameplates including Peterbilt and Kenworth.

Under the new agreement, the two companies will develop, test, and sell vehicles that marry Aurora's autonomous-driving tech with Paccar's vehicles, Aurora said.

"We have entered into a strategic partnership with Paccar that combines their considerable expertise in heavy-duty truck development, manufacturing, and sales with our deep understanding of autonomous vehicle technology to bring a safe, efficient self-driving product to market quickly and deploy it broadly," Sterling Anderson, Aurora's co-founder, said in a blog post.

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Aurora and Paccar engineers will jointly develop "driverless-capable" trucks based on the Peterbilt 579 and Kenworth T680, the startup said. The two firms will also work together to create "an expansive commercialization plan for the deployment of these trucks at scale over the next few years," Anderson said.

Shares of Paccar rose more than 5% in late trading Tuesday after the deal was announced.

Aurora has long said that its first commercial product will be in trucking, where it says the market is largest and the unit economics are most favorable. Automated driving is also easier to achieve on highways - as opposed to city streets - where trucks can travel for hours at a time in predictable traffic.

But the company is hardly the only firm looking to carve out a slice of the future autonomous trucking market, nor is it alone in enlisting a manufacturing partner to help it do so.

Alphabet's Waymo has tested its driverless, class-8 trucks in several states and announced plans last year to develop vehicles with Daimler, which has an autonomous big rig program of its own. TuSimple said in July that it is joining forces with US truck manufacturer Navistar, with production targeted to begin in 2024.

News of the agreement comes weeks after Aurora announced it would acquire Uber's self-driving taxi business in December. That deal closed Tuesday.