Truck industry tech players are introducing next-generation technologies and tools, collectively referred to as “Truck Industry Tech,” comprising route planning and freight management apps, driving assist platforms, autonomous trucks, and electric and fuel cell truck components.
These tech solutions aim to shape the future of the truck industry by improving road safety and fuel efficiency while moving traditional freight matching and route planning online, providing convenience and cost savings for truck drivers, fleets, and shippers. The Internet of Things (IoT), sensors, and camera technologies have become essential to fueling the industry’s advancements.
Route planning, online freight matching platforms, and Society of Automotive Engineers (SAE) Level 1 autonomous technology are in the commercial stage, whereas autonomous trucks (SAE level 4 and 5) and electric and fuel cell trucks are still at the pre-commercial stages.
Autonomous trucks and technological advancements in the industry have come into the spotlight during the Covid-19 pandemic, providing possible solutions to several issues within the sector, including driver shortages and bottlenecks in supply chain logistics.
The closing of state borders and manufacturing plants resulted in various industry-related issues, leading to layoffs for some businesses (ex: Kodiak Robotics, KeepTruckin).
Trucking apps, including Transflo, Trucker Tools, and Drivewyze, introduced new tools and features to safeguard driver health and keep supply chains moving during the Covid-19 pandemic.
The trucking tech industry is dominated by incumbents, especially in route planning software, driving and safety assist tools, and autonomous trucks. In contrast, startups hold a notable presence in freight matching and tracking platforms, likely influenced by the success of the digital ride-hailing and hospitality industries. Despite being relatively capital-intensive, the autonomous trucks segment also has a high presence of startups as costs of autonomous technology have decreased due to the boom in the self-driving vehicles industry. For example, Waymo managed to bring its Laser Bear Honeycomb LiDAR prices down by around 90% to roughly USD 7,500 by 2019 from the industry norm of USD 75,000 a few years before.
The most prominent disruptors in the industry come from the autonomous trucks segment (collective funds raised to date over USD 4 billion), despite these companies still not reaching full commercial scale. Aurora Innovation and TuSimple are considered the segment leaders, having raised USD 1.1 billion and USD 648 million, respectively, and reaching unicorn status in 2019. Nuro is also included in this segment, raising more than USD 1.5 billion in funding; however, the company is primarily involved in last-mile delivery automation with only a limited presence in the autonomous trucks industry.
Most disruptors operate in the online freight platforms segment, raising more than USD 2 billion in funding collectively. These companies have reached commercial-scale operations, with the majority operating in early or growth stages. Convoy is the highest-funded company in the space, raising USD 666 million as of March 2021 (reaching unicorn status in 2018). KeepTruckin and Germany-based Sennder are other prominent trucking app startups, both having raised more than USD 200 million as of March 2021.
The industry also includes several companies that have been listed or propose to be listed via special purpose acquisition companies (SPACs), including 1) Nikola, an electric and fuel cell truck manufacturer that was listed in June 2020 at a post-money valuation of USD 3.3 billion; 2) Ree Automotive, an autonomous truck manufacturer listed in July 2021 through a SPAC at a valuation of USD 3.6 billion; 3) Hyzon, a hydrogen fuel cell truck manufacturer listed in July 2021 through a merger with a SPAC at a valuation of USD 2.7 billion; 4) Einride, an autonomous truck operator that announced it is looking for IPO opportunities via a SPAC in March 2021; 5) Plus, an autonomous truck manufacturer that announced its plans to be listed through a SPAC at a valuation of USD 3.3 billion in May 2021; 6) Embark Trucks, an autonomous truck manufacturer that announced its plans go public through a SPAC merger at a valuation of USD 5.2 billion in June 2021; and 7) Aurora Innovation, an autonomous truck manufacturer that announced its plans to publicly list through a SPAC merger at a valuation of USD 13 billion in July 2021. The autonomous truck operator TuSimple also filed for an IPO in March 2021.
TuSimple, listed on Nasdaq since April 2021, outfits trucks with sensors and processing units for Level 4 autonomous conversions (fully autonomous vehicles limited to specific locations and/or conditions). Its technology uses AI, LiDAR, radar, and an HD camera system to achieve 360-degree awareness, 30 seconds ahead and 1,000 meters away event recognition, and functionality in the dark or in bad weather. The trucks are built in partnership with truck OEMs Navistar and TRATON (a subsidiary of Volkswagen Group). TuSimple began testing on public roads in 2018, first in Arizona and Shanghai. The company later expanded operations to include Texas, Beijing, and Sweden. As of June 2021, the company operated a fleet of roughly 70 trucks and reported to have driven 4.6 million safe miles, envisioning fully autonomous road testing by the end of 2021.
In July 2020, TuSimple announced plans for an autonomous freight network (AFN) to expand the shipment business of its 22 contracted customers (which include UPS and McLane) as well as to acquire new ones (ex: U.S. Xpress). In July 2020, TuSimple and Navistar announced a further collaboration to develop a semi-truck with autonomous capabilities for a 2024 commercialization. Navistar also invested an undisclosed amount in TuSimple at that time.
In July 2020 the company announced plans to expand routes in the Texas triangle of Dallas, Houston, and San Antonio through 2021 (opened a new facility in Dallas-Fort Worth in June 2021); add routes between Los Angeles, California and Jacksonville, Florida by 2023; and start shipping nationwide by 2024. As of June 2021, the company had secured 6,675 reservations for its trucks from shippers, carriers, and truck lessors including Penske, Schneider, and U.S. Xpress. TuSimple also partnered with fleet management solutions provider Ryder System in July 2021, to utilize Ryder’s selected fleet maintenance facilities as terminals for the nationwide expansion.
In addition to its autonomous trucks, the company also has developed a proprietary automotive-grade camera and vision system that can be installed into its autonomous trucks. The system is capable of night and low light autonomous operations. The company operates under two business models 1) a carrier-owned capacity model for fleets to purchase autonomous trucks directly and subscribe to TuSimple Path for a roughly USD 0.35 per mile fee, which enables autonomous operations across the AFN; and 2) the TuSimple capacity model for fleets to access autonomous trucks owned and operated by TuSimple and pay around USD 1.45 per mile.
For the year ended December 2020, the company posted revenue of USD 1.8 million, up by 160% year-over-year (YoY). However, TuSimple has yet to turn a profit and reported an operating loss of USD 177.9 million in 2020, more than double the loss incurred in 2019. Company guidance for 2021 at USD 5 - 7 million implies YoY growth of 178% - 289% driven by accelerating fleet utilization and enhanced AFN partner operations.
Driving and safety assist tools:
Electric and fuel cell trucks:
Incumbents in the autonomous and alternative fuel truck space are well-established truck manufacturers, with the majority offering self-driving tech as well. For example, Volvo Trucks develops its own autonomous truck dubbed “Vera” while also offering a collision mitigation system called 'Volvo Active Driver Assist.'
Incumbents in the route planning and online freight platforms space include truck stop and travel center companies that introduce their own apps (TravelCenters of America, Love's Travel Stops), as well as other established road travel planning and freight matching companies with separate apps for truck drivers (Trimble MAPS, Zonar, and Direct Freight Services).
In-house Product Development
Unveiled in November 2017, “Tesla Semi” is Tesla Motors’ electric class 8 semi-truck that comes with its self-driving technology, “Tesla Autopilot.” The autopilot feature is equipped with automatic emergency braking, lane keeping alerts, lane departure warnings, and event recording, with SAE Level 2 automation. Tesla Semi marked its first test delivery in March 2018, transporting battery packs from the Gigafactory to the company’s car factory, both in Nevada, covering around 240 miles each way.
The production release of the truck has been pushed back to 2022 from 2019. The delay came amid the company’s attempt to develop its own battery cells at scale for the trucks. The truck models are expected to be priced at USD 150,000 (300-mile range model) and USD 180,000 (500-mile range model). Tesla has secured preorders for the truck from companies including Pride Group Enterprises (for 150 trucks; November 2020), Walmart (for 130 trucks; September 2020), and Pepsi (for 100 trucks; December 2017). It was reported in February 2021 that at least two units had been spotted being transported in Sacramento, California, the first appearance since the launch in 2018.