Serve Robotics Enters Production Agreement with Magna to Scale Robot Manufacturing

Rhea-AI Summary

Serve Robotics Inc. (NASDAQ: SERV) has entered into a production agreement with Magna International Inc. to scale its robot manufacturing capabilities. The agreement aims to deploy up to 2,000 robotic delivery vehicles for Uber Eats and expand geographically. Magna will manufacture Serve's robots exclusively, building on a previous licensing agreement, showcasing Serve's leadership in autonomous sidewalk delivery.

Insights

Market Research Analyst

The expanded collaboration between Serve Robotics and Magna International underscores a burgeoning trend in the adoption of robotics within the logistics sector. Given the scale of operation that Serve plans to achieve—deploying 2,000 robots via Uber Eats—this agreement is poised to potentially enhance Serve's delivery capabilities significantly. It reflects a strategic move by Serve to tap into Magna's manufacturing prowess to meet and sustain the high demand that such an expansion entails. As this partnership involves exclusive manufacturing rights, it could streamline production processes and minimize potential disruptions, leading to a more robust supply chain for Serve.

Financial Analyst

From a financial perspective, Serve's reliance on Magna for exclusive manufacturing could lead to efficiency gains and cost savings in the long term. Such economies of scale can potentially reduce the per-unit cost of the delivery robots, improving Serve's margin over time as the fleet expands. Meanwhile, investors should monitor how the capital expenditures required for this expansion impact Serve's short-term financials. While increased production capacity can drive growth, it may also involve significant upfront investments, which could affect Serve's cash flow and earnings in the near term.

Tech Industry Expert

Technologically, the agreement might also serve as a catalyst for innovation in the robotics and logistics space, with Serve's technology forming the foundation for new robotic products. The focus on a technology platform approach suggests that Serve is positioning itself not merely as a service provider but as an influencer in the broader robotics market. By licensing their technology to Magna, they open avenues for diversification and new revenue streams. For investors, this can be seen as Serve's preparation to capture a larger market share and solidify its competitive advantage amid a fast-evolving industry.

• Serve to rely on Magna's manufacturing expertise to scale its fleet to up to 2,000 robots for Uber Eats and for geographic expansion
• Magna has been licensing Serve's technology to support development of new robotic products

SAN FRANCISCO, April 24, 2024 /PRNewswire/ -- Serve Robotics Inc. (the "Company" or "Serve") (NASDAQ:SERV), a leading autonomous sidewalk delivery company, today announced an expansion of their existing agreement with Magna International Inc. ("Magna") (TSX: MG; NYSE: MGA), one of the world's largest automotive suppliers, to accelerate the adoption of robotics in logistics. Under the terms of a new production and purchase agreement effective April 24, Magna will become the exclusive contract manufacturer of Serve's delivery robots, supporting Serve's plan to deploy up to 2,000 robots on the Uber Eats platform across multiple U.S. markets.

This new agreement extends the partnership established by a previously disclosed licensing agreement effective February 20, 2024, under which Serve granted Magna a non-exclusive license to its market-leading technologies and expertise, enabling Magna to further develop new products in the robotics and logistics space.

"Serve is a leader in creating robots that navigate complex human environments. Following our successful public offering, we are excited to start working to scale our robotic fleet with Magna's world-class manufacturing capabilities. This collaboration supports the natural progression of our business beyond food delivery and positions our proprietary robotics technology as a platform upon which new robots can be built. Magna is a valuable partner in this effort," said Ali Kashani, CEO of Serve Robotics.

"Magna is excited to continue collaborating with Serve, leveraging our manufacturing and technical expertise to help fuel Serve's growth potential," said Matteo Del Sorbo, Executive Vice President of Magna, responsible for New Mobility globally.

About Serve Robotics

Backed by Uber and NVIDIA, Serve Robotics develops advanced, AI-powered, low-emissions sidewalk delivery robots that endeavor to make delivery sustainable and economical. Spun off from Uber in 2021 as an independent company, Serve has completed tens of thousands of deliveries for enterprise partners such as Uber Eats and 7-Eleven. Serve has scalable multi-year contracts, including a signed agreement to deploy up to 2,000 delivery robots on the Uber Eats platform across multiple U.S. markets.

For further information about Serve Robotics (NASDAQ:SERV), please visit www.serverobotics.com or follow us on social media via X (Twitter), Instagram, or LinkedIn @serverobotics.

Serve Contact

Aduke Thelwell
Head of Communications & Investor Relations
Serve Robotics
aduke.thelwell@serverobotics.com
347-464-8510

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SOURCE Serve Robotics Inc.

FAQ

What agreement did Serve Robotics enter into with Magna?

Serve Robotics entered into a production and purchase agreement with Magna International Inc. to scale its robot manufacturing capabilities.

How many robots does Serve plan to deploy on the Uber Eats platform?

Serve plans to deploy up to 2,000 robots on the Uber Eats platform across multiple U.S. markets.

What is the ticker symbol for Serve Robotics Inc. and Magna International Inc.?

The ticker symbol for Serve Robotics Inc. is NASDAQ: SERV, and for Magna International Inc. is TSX: MG; NYSE: MGA.

Who is the CEO of Serve Robotics?

Ali Kashani is the CEO of Serve Robotics.

What was the previous agreement between Serve and Magna about?

The previous agreement involved Serve granting Magna a non-exclusive license to its technologies and expertise for robotics and logistics product development.