*

Uber ( UBER ) to deploy 20,000 Lucid SUVs with Nuro's AV tech

*

Lucid-Nuro prototype operating at Las Vegas testing

facility

*

Challenges remain for AV commercialization due to costs

and

regulations

By Abhirup Roy and Akash Sriram

SAN FRANCISCO, July 17 (Reuters) - Uber ( UBER ) will

invest $300 million in electric vehicle maker Lucid in

a robotaxi deal that aims to start with one major U.S. city late

next year, the companies said on Thursday.

Over six years starting in 2026, Uber ( UBER ) will acquire and

deploy over 20,000 Lucid Gravity SUVs that will be equipped with

autonomous vehicle (AV) technology from startup Nuro, the three

companies said in a statement.

The agreement illustrates the renewed plans and push for

financing for self-driving cabs years after a first wave of

autonomous driving investment produced only a limited number of

vehicles. Tesla has recently launched a robotaxi trial in Austin

and Alphabet's driverless taxi unit Waymo is speeding

up its expansion.

As part of their announced deal, Uber ( UBER ) will invest hundreds

of millions of dollars in Lucid and Nuro, which supplies

self-driving technology to automakers, the joint statement said.

Of that, $300 million will go to Lucid, the EV maker said in a

separate filing to the U.S. Securities and Exchange Commission

on Thursday.

Uber's ( UBER ) latest move underscores its renewed push into the

robotaxi space after exiting in 2020. Since then, Uber ( UBER ) has

pivoted to partnerships with several technology developers,

including Waymo and Aurora.

The deal with Lucid follows Uber's ( UBER ) robotaxi agreement in

April with Volkswagen that will supply its ID.Buzz vans for

commercial service planned for Los Angeles next year.

But commercializing AV tech has been much harder than

anticipated with high costs, tight regulations and federal

investigations forcing many, including General Motors' ( GM )

Cruise, to shut down.

Some still in the race include Amazon.com's ( AMZN ) Zoox,

which is testing a robotaxi without manual controls and plans to

launch commercial services in Las Vegas this year.

After years of missed promises, Tesla started a

restricted trial with about a dozen of its Model Y SUVs in

Austin, Texas, last month. CEO Elon Musk has said it will expand

the service rapidly to other U.S. cities this year.

Waymo has been growing cautiously for years and operates in

several U.S. cities with about 1,500 vehicles. It crossed 100

million miles of autonomous driving this month.

A prototype of the Lucid-Nuro robotaxi is already operating

autonomously on a closed circuit at Nuro's testing facility in

Las Vegas, the companies said.

"We are expanding beyond our traditional EV technology

leadership and working on partnerships and going now into areas

that in the past we have not really focused on," Lucid's interim

CEO Marc Winterhoff told Reuters.

Nuro, co-founded and led by former Waymo engineers, has

expanded from making last-mile delivery vehicles to providing

its self-driving technology for commercial and passenger

vehicles.

"We have other very active conversations going on the

personal vehicle side ... where we would integrate Nuro driver

into vehicles that will get sold to end consumers," Dave

Ferguson, Nuro's co-founder and president, said.

Nuro will still need to apply for state-level operating

licenses though it holds some licenses from their previous

delivery operations, he said.