After some preliminary bullish bulletins and inflated expectations concerning rollout timing, autonomous truck gamers have modified their view over the previous few years on possible mid-term achievements. Slower-than-expected expertise progress and questions of safety have delayed business launches. In the end, nevertheless, the business has come a good distance, and lots of autonomous truck start-ups are near creating and implementing the complete set of capabilities that the autonomous driver requires or are presently fixing the final remaining challenges. The business is now working to show the protection capabilities of their expertise and, if all runs easily, driver out operations may be anticipated in 2024.

Whereas driver out is a crucial milestone, it merely marks the start line of the market adoption curve. The general alternative of autonomous trucking is big. The US trucking market is estimated to be price US$800bn. Roland Berger estimates that by the center of the subsequent decade, 20-30% of the on-road freight quantity may be dealt with by autonomous vans. The pace of adoption, nevertheless, can be decided by each technological developments and client behaviour. Operational challenges and the chance adversity inherent to the trucking business can decelerate adoption regardless of the numerous worth proposition provided by autonomy. Moreover, whereas there are a number of pilot programmes ongoing the place carriers have partnered with autonomous truck start-ups to deploy the expertise in actual world purposes, significant revenues for start-up gamers are seemingly nonetheless a number of years out.

Investor curiosity cools and extra gamers drop out

The overall calm down of investments within the tech sector over the previous months has additionally affected autonomous truck start-ups. In a excessive rate of interest atmosphere, buyers are shying away from pre-revenue firms, particularly these whose business timelines proceed to be delayed. Determine 1 exhibits the market capitalisation of chosen, publicly traded autonomous truck gamers. TUSimple, Aurora and Embark misplaced over 90% of their market cap since starting of 2022.

Autonomous truck start-ups want important funding to assist the event of their new expertise. Roland Berger estimates that the event and testing of a Stage 4 autonomous driver system prices about US$2bn. This quantity stays considerably increased than the funding that any autonomous truck start-up has raised thus far. Drying up funding inflows will result in additional shakeout of gamers. Whereas early-stage gamers have failed prior to now, the business is now starting to see extra superior gamers like Embark winding down operations and promoting their belongings.

Traders divert their consideration to confined space purposes

Whereas it appears like autonomous truck start-ups are dealing with mounting challenges, there’s a silver lining in all of this. Automation of confined space purposes reminiscent of yard tractors or mining vans remains to be attracting buyers. US start-up Outrider develops self-driving yard vans that may robotically join and disconnect from trailers. Outrider was capable of safe funding earlier this yr regardless of normal discount of funding inflows to the autonomous over-the-road (OTR) truck area.

The general market potential for automated yard tractors is far decrease than for OTR vans. In response to Roland Berger estimates, annual gross sales within the yard tractor phase vary between 6,000 and eight,000 vans, in comparison with 150,000 vans within the OTR phase. Nonetheless, the chance profile of a enterprise making an attempt to automate yard tractors is far more favoruable than that of a participant aiming to automate the extra advanced use case of unconfined space trucking. The capabilities that an autonomous driver must have by way of sensing, route planning, and choice making are far more restricted in confined areas. Common pace is decrease, lowering the necessity for long-range notion, and lots of advanced driving duties which might be tough to automate, reminiscent of high-speed merges onto a freeway, don’t exist. Moreover, yard tractors are working in environments reminiscent of port terminals which might be already extremely automated. In consequence, required investments in creating expertise are decrease, whereas the saving alternatives, that primarily come from eliminating the human driver, are comparable. As an business, confined-area autonomy focuses on related expertise whereas total lowering a lot of the dangers confronted by the OTR trucking business. This may be seen as excessive worth proposition for buyers who proceed to take a position on this area regardless of the present financial headwinds immediately.

Concerning the authors: Walter Rentzsch is Director and Wilfried Aulbur is Senior Companion at Roland Berger