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- The autonomous-vehicle industry has been increasing its focus on heavy-duty trucks and delivery vehicles in recent years.
- Commercial vehicles present fewer technological challengers than passenger cars.
- And the financial benefits of self-driving trucks and delivery vehicles may exceed those of robotaxis.
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The hope that the early 2020s would see the widespread deployment of robotaxis and self-driving cars has faded, the autonomous-vehicle industry has recognized that trucking and deliveries may offer an opportunity to get their technology on the road faster.
Startups focused on carrying goods, like Nuro and TuSimple, have signed partnerships with Fortune 500 companies in recent years while some of the autonomous-vehicle industry’s biggest names, like Waymo and Aurora Innovation, have ramped up their efforts in commercial vehicles.
“We have always said we’d pick a path to market that allows us to make the biggest impact the fastest,” Aurora said in July. “Our first commercial product will be in trucking — where the market is largest today, the unit economics are best, and the level of service requirements is most accommodating.
Business financial make money capital trading Self-driving passenger cars are taking longer than expected
For much of the 2010s, the hype around autonomous vehicles was centered on ride-hailing and consumer vehicles. Both companies and analysts predicted that self-driving technology would take off early this decade.
Those projections proved to be overly optimistic as the industry realized that creating a safe and reliable automated-driving system was harder than it anticipated, said Steven Shladover, a research engineer at the University of California at Berkeley who focuses on transportation and vehicle automation. Today, deployments of autonomous vehicles in ride-hailing services, often with safety drivers ready to take over if needed, are limited and, despite Tesla CEO Elon Musk’s insistence that self-driving consumer vehicles are right around the corner, experts say we’re likely decades away from computer-driven cars hitting dealerships. Autonomous-vehicle companies are now more likely to emphasize the challenges they face or the importance of safety than set hard implementation timelines.
“Until a company has invested a few billion dollars and maybe at least a decade of effort, they don’t even know what they don’t know,” Shladover said. “It takes that much investment of time and effort to really appreciate the complexity of automated driving.”
Business financial make money capital trading But AV semi-trucks can get on the road — and start earning meaningful revenue — faster
Building an automated-driving system that can understand its surroundings and make the right decisions 98% of the time is not enough; the rate of reliability needs to be greater than 99%, Musk has said, leading to a stage of development he’s called a “march of nines” — a series of small, incremental improvements. That process is even more difficult when your vehicle needs to be able to drive anywhere under any weather conditions while also offering a comfortable and efficient ride to its passengers.
Heavy-duty trucks that spend most of their time on the highway and delivery vehicles that don’t carry people present fewer challenges, experts told Business Insider. Semi-trucks can largely avoid pedestrians and intersections, said Sam Abuelsamid, a research analyst at Guidehouse Insights whose areas of focus include automated driving. And delivery vehicles can drive slower and stop more often than an impatient passenger would tolerate, Shladover said.
“When you get into goods movement, it’s a little bit less demanding on the technology side,” Shladover said.
Fewer technological hurdles mean companies working on autonomous trucks and delivery vehicles face quicker timelines for getting on the road and earning meaningful revenue. Beginning to show a return on the millions or billions of dollars their backers have spent on their efforts is “a huge deal” for these companies, said Joel Janda, a managing director at Boston Consulting Group and the company’s lead consultant on commercial vehicles.
Argo AI, which is working on an automated-driving system that Ford and Volkswagen plan to use, and Aurora were founded in 2016, but have not yet begun giving rides or delivering goods to paying customers. Waymo, founded in 2009, has only a small ride-hailing service that operates in parts of Arizona.
“With a decade of development, you are clearly going to start getting some investor pressure to monetize this investment,” Janda said.
Business financial make money capital trading The financial benefits of self-driving commercial vehicles are obvious
Finding companies that are interested in self-driving semi-trucks or delivery vehicles shouldn’t be an issue, as the business case for the technology is obvious. Drivers account for around 40% of long-haul-trucking companies’ operating costs, Janda said. TuSimple, which is developing an autonomous-driving system for heavy-duty trucks, has already started delivering packages in pilot programs with UPS and the US Postal Service.
For all the financial benefits ride-hailing companies see in computer-driven cars, the economics are even better for deliveries, Abuelsamid said. A ride-hailing vehicle may have to drive around empty while it waits for someone to call it, but a logistics firm or retailer can fill a vehicle with goods before sending it out on the road along a route optimized for efficiency.
Technical and financial advantages mean trucking and deliveries, rather than ride-hailing, will drive the commercialization of automated-driving technology in the coming years, Abuelsamid said. And that isn’t likely to change anytime soon, according to Janda, who said it could be 20 years before autonomous passenger-vehicles outnumber self-driving commercial vehicles.
“There’s still a lot of technology that’s got to be solved in the passenger-vehicle market,” Janda said.
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