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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
2017 Share Plan
In April 2017, the Company adopted the 2017 Share Plan (the “2017 Plan”) under which employees, directors, and consultants may be granted various forms of equity incentive compensation at the discretion of the board of directors, including stock options, restricted shares, RSUs, and SVAs.
Stock options granted under the 2017 Plan have a contractual term of ten years and have varying vesting terms, but generally vest over a requisite service period of four years. The exercise price of the stock options granted may not be less than the par value of the common stock on the grant date for non-U.S. tax residents and may not be less than the fair market value of the common stock on the grant date for U.S. tax residents. Certain stock options contain a performance condition and are only exercisable subject to the grantee’s continuous service and the completion of an IPO. Such performance conditions were satisfied upon the closing of the Company's IPO.
In March 2021, the Company’s board of directors approved an amendment to the 2017 Plan to increase the number of shares of common stock reserved for issuance by 2,300,000 shares, for a total of 24,267,694 shares reserved.
The 2017 Plan was terminated in connection with the Company’s IPO in April 2021, and the Company will not grant any additional awards under the 2017 Plan. However, the 2017 Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the 2017 Plan.
2021 Equity Incentive Plan
In March 2021, the board of directors adopted the 2021 Equity Incentive Plan (the "2021 Plan"), which became effective upon its approval by the board of directors, but for which no awards were eligible to be granted prior to the Company’s IPO in April 2021. The 2021 Plan provides for the grant of stock options, stock appreciation rights (“SARs”), restricted stock, and RSUs to the Company’s employees, directors, and consultants. The number of shares of the Company’s Class A common stock reserved for issuance under the 2021 Plan is 20,134,146 plus up to 19,892,067 shares of Class A common stock subject to awards under the Company’s 2017 Plan. In the event that the aggregate number of shares of Class A common stock that are available for issuance under the 2021 Plan as of the last day of a fiscal year is less than 5.0% of the Company's fully-diluted capitalization, then for the duration of the 2021 Plan, on the first day of each fiscal year of the Company thereafter, the number of shares of Class A common stock available for issuance under the 2021 Plan will automatically increase by either (i) 2.5% of the Company’s fully-diluted capitalization as of the last day of the immediately preceding fiscal year or (ii) such other amount as determined by the board of directors.
2021 Employee Stock Purchase Plan
In March 2021, the board of directors adopted the 2021 Employee Stock Purchase Plan (the "2021 ESPP"), which became effective upon the Company's IPO in April 2021. The 2021 ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. A total of 2,013,414 shares of the Company's Class A common stock have been reserved for future issuance under the 2021 ESPP, subject to annual increases authorized by the board of directors; however, the aggregate number of shares of Class A common stock that may be approved for issuance under the 2021 ESPP in any given fiscal year may not exceed 1% of the total number of shares of common stock issued and outstanding on the last business day of the prior fiscal year.
The stock-based compensation expense recognized for the 2021 ESPP was $0.6 million during the year ended December 31, 2021. During the year ended December 31, 2021, no shares were purchased under the 2021 ESPP.
As of December 31, 2021, unrecognized stock-based compensation expense related to the 2021 ESPP was $0.3 million, which is expected to be recognized over a weighted-average period of 0.16 years.
The estimated grant-date fair value of the ESPP purchase rights was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
Year Ended December 31, 2021
Risk-free interest rate
0.06%
Expected dividend yield
—
Expected volatility
97.10%
Expected term (in years)
0.50
Fair value of common stock
$44.39
Stock Options
A summary of the stock option activities, including the CEO Performance Award, for the year ended December 31, 2021 is as follows (in thousands, except share amounts, per share amounts, and years):
 Options
Outstanding		Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Life
(Years)		Aggregate
Intrinsic
Value
Outstanding at December 31, 202013,295,497$1.29 7.99$97,986 
Granted
3,767,96822.36 
Exercised
(8,580,984)0.14 
Cancelled/Forfeited
(797,703)1.27 
Outstanding at December 31, 20217,684,778$12.91 9.04$188,722 
Vested and exercisable at December 31, 20211,996,923$4.38 8.80$62,843 
There were no stock options granted during the year ended December 31, 2019. The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2020 and 2021 was $3.61 and $27.98 per share, respectively. There were no options exercised during the year ended December 31, 2019. The aggregate intrinsic value of options exercised during the year ended December 31, 2020 and 2021 was $3.7 million and $11.1 million, respectively.
As of December 31, 2021, there was $92.5 million of unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average service period of 3.21 years.
Upon the closing of the Company’s IPO, the Company recognized $18.8 million of stock-based compensation expense relating to stock options for which the time-based vesting condition has been satisfied or partially satisfied on that date, and for which the performance condition was satisfied upon the occurrence of the IPO.
The estimated grant-date fair value of the Company’s stock-based option awards was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
 Years Ended December 31,
 201920202021
Risk-free interest rate
—
0.14% - 0.44%
0.33% - 1.25%
Expected dividend yield
———
Expected volatility
—
51.00% – 60.00%
50.00%
Expected term (in years)
—
2.21 – 6.06
4.05 - 6.22
Fair value of common stock
—
$1.52 – $8.24
$32.18 - $47.79
These assumptions and estimates were determined as follows:
Fair Value of Common Stock – Prior to the Company's IPO, the fair value of the common stock underlying the options was determined by the Company’s board of directors given the absence of a public trading market, with input from management and valuation reports prepared by third-party valuation specialists. Stock-based compensation for financial reporting purposes is measured based on updated estimates of fair value when appropriate, such as when additional relevant information related to the estimate becomes available in a valuation report issued as of a subsequent date. Subsequent to the Company's IPO, the fair value of the Class A common stock is determined based upon the closing sale price per share of the Company's Class A common stock on the date of grant.
Risk-Free Interest Rate – The risk-free interest rate for the expected term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.
Expected Term – The expected term of options represents the period of time that options are expected to be outstanding. The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to a lack of sufficient data. For options granted to-date, the expected term is estimated using the simplified method. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options.
Expected Volatility – As the Company does not have a sufficient trading history for its Class A common stock, the expected volatility was estimated by taking the average historic price volatility for industry peers, consisting of several public companies in the Company’s industry that are either similar in size, stage of life cycle, or financial leverage, over a period equivalent to the expected term of the awards.
Expected Dividend Yield – The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. As a result, an expected dividend yield of zero percent was used.
CEO Performance Award
In March 2021, included in the stock options discussed above, the Company granted 1,150,000 stock option awards to its CEO with an exercise price of $14.14 per share and a contractual life of ten years that vest upon the attainment of both operational milestones (performance conditions) and market conditions, assuming continued employment as CEO through the vesting date (the “CEO Performance Award”). The options will vest upon certification by the Board of Directors that all the following milestones have been attained: (i) the average market capitalization of the Company during any consecutive 180-day period is no less than $25.0 billion, (ii) the average number of L4 autonomous semi-trucks operating on the Company’s Autonomous Freight Network in any 90-day period is no less than 1,500, and (iii) the Company’s revenues from its Autonomous Freight Network for any 12-month period exceed $200.0 million.
As of December 31, 2021, there was a total of $25.1 million unrecognized stock-based compensation expense for the operational milestones that were considered probable to achieve which will be recognized over a period of 2.92 years. For the year ended December 31, 2021, the Company recorded stock-based compensation expense of $7.1 million related to the CEO Performance Award.
RSUs
The following table summarizes the activity related to RSUs for the year ended December 31, 2021:
 RSUs
Outstanding		Weighted-
Average Grant
Date Fair Value
per Share
Unvested and Outstanding at December 31, 20201,100,000$14.14 
Granted
6,197,22947.57 
Vested(1,217,573)22.42 
Cancelled
(129,858)47.42 
Unvested and outstanding at December 31, 20215,949,798$46.54 
Vested and outstanding at December 31, 202115,603$40.35 
SVAs
The following table summarizes the activity related to SVAs for the year ended December 31, 2021:
 SVAs
Outstanding		 Weighted-
Average Grant
Date Fair Value
per Share
Unvested and Outstanding at December 31, 20203,653,146$3.20 
Vested
(3,070,459)3.08 
Cancelled
(267,128)5.77 
Unvested and outstanding at December 31, 2021315,559$5.29 
Vested and outstanding at December 31, 2021—$— 
As of December 31, 2021, there was $243.3 million of unrecognized stock-based compensation expense related to RSUs and SVAs, which is expected to be recognized over a weighted-average service period of 3.12 years.
Upon the closing of the Company’s IPO, the Company recognized $23.8 million of stock-based compensation expense relating to RSUs and SVAs for which the time-based vesting condition has been satisfied or partially satisfied on that date and for which the performance condition was satisfied upon the occurrence of the IPO.
Restricted Share Awards
During 2020, the Company issued 1,899,680 shares of Class A common stock to two employees under a restricted share agreement at a grant date fair value of $3.62 per share, totaling $6.9 million. Compensation expense related to these awards was recorded as selling, general and administrative expense within the consolidated statements of operations. All of the shares were vested as of December 31, 2021.
Stock-based Compensation Expense
Total stock-based compensation expense was as follows:
 Years Ended December 31,
 201920202021
Research and development$— $917 $71,201 
Selling, general and administrative— 11,846 51,395 
Total stock-based compensation expense
$— $12,763 $122,596