Alastair has over 10 years’ experience leading research activities in scaled, high-growth industrial and technology markets. At Interact Analysis he is responsible for electric trucks and buses, autonomous trucks and off-highway electrification.
Autonomous Truck Forecast
- The autonomous truck forecast shows the largest markets forecast to be China, the US, Japan and Germany. India has potential to over-take Germany and Japan in volume terms if it can overcome legislative and infrastructure challenges
- The autonomous truck forecast shows discrete ‘platooning’ sales to decline after 2030, becoming feature-set of higher-level automation
- The autonomous truck forecast shows highway driving to fuel early adoption
- New sales process and business models needed
- The autonomous truck forecast highlights major opportunities, some not being addressed by industry
In a new report, Interact Analysis provides an autonomous truck forecast that highlights the beginning of a long and irreversible trend toward automation within the truck market. Legislation and societal acceptance provide market headwinds and competitive pressure, logistics efficiency and safety provide significant forward momentum. Platooning, an ‘efficiency’ automation provides the basis for initial market growth, particularly in the US and Western Europe. However, as technology is proven, and effective legislation enacted, higher levels of automation that lessen the need for drivers will be adopted. These higher levels of automation that bring the principles of factory automation – electrification, constant ‘product’ flow and autonomy – to the road, will gain traction after 2030 and revolutionise the truck and logistics market. The US is forecast to be the early market leader as it contains both an active start-up community trialling the technology and a positive legislative environment enabling trials. However, China is aggressively pursuing its own, domestically sourced technologies and has several start-ups and established OEMs investigating higher levels of automation. If Chinese legislators pursue a similar approach with autonomy as they did (and are doing) with electric vehicles, then China stands to be the dominant market for truck automation over the next 20 years.
Business Model Adaptation – Autonomous Truck Forecast
The switch to automated trucks – using platooning or higher levels of automation – will require a significant change in the sales process and the business model associated with truck ownership. The sales process will become much more consultative in the future as truck operators will need to engage in route and operational planning to understand where to use platooning and autonomy for maximum benefit. It isn’t clear yet who will provide this consultation – the OEM, the dealership or a third-party. Fleet operators that use telematics will have an advantage as the vehicle data they possess will be an invaluable aid in planning where and when automation events can occur.
With regard business models, the following outlines the likely business models associated with platooning:
A subscription-based model seems most beneficial to all parts of the value chain. It creates the best long-term value opportunity for truck manufacturers and platooning providers and offers, arguably, the best level of service/engagement to fleet operators. It is very unlikely that most of the market will buy ‘platooning ready’ vehicles and operate the service themselves since the complexity of planning platooning activity would typically require specialist support that fleets do not themselves possess. For a subscription model key points that still need to be resolved are how the service is billed – a flat-rate per month or a per distance fee – and how the revenue is distributed along the value chain, i.e. who manages billing, how are subscription fees split, etc.
Vehicle Application – A Key Factor in Autonomous Truck Forecast
What a truck is used for plays a key factor in how it will be automated and the uptake of a particular technology. For example, platooning only really makes sense where trucks can be operated for long periods of time at higher speeds. This means that mid- to long-haul trucks that have a duty cycle that requires a high percentage of highway miles represent the best opportunity for platooning. For L4 automation, where the driver can be replaced, the simplest deployment for a technical perspective is highway driving. This means that L4 automation will, again, gain traction first in highway applications. However, since L4 automation can be effective in lower speed domains, it will also be used in applications – such as urban delivery – where platooning is ineffective. Vocational vehicles – those with a particular function like fire trucks – will likely be the most resistant to automation in the mid-to-long term. Since the driver is required to perform a task at their destination, there is less pressure to replace them. That said, point-to-point vocational vehicles such as dump trucks, mixer trucks and logging trucks may be automated more quickly.
Position in Freight Value Chain Impacts Uptake – Autonomous Truck Forecast
Another important factor impacting the uptake of automation technology in commercial vehicles is the attitude of different players within the freight market itself.
- Small owner-operator firms are, in many instances, openly hostile toward automation – they see that they may not be able to compete from a cost perspective with larger firms who pursue automation. They also see automation as an ‘affront’ to their skill/experience as drivers.
- Larger owner-operator firms are cautiously open to automation as they see it as way to help the remain competitive with the largest fleets. However, they must walk a careful line in the short- to mid-term, since many drivers may be reluctant to work for them if they perceive that they may be replaced.
- Large, private fleet owners are keen to experiment with automation. In the short-term it is a way to reduce OPEX (fuel saving from platooning, for example) and in the long term they may be able to reduce CAPEX too, by using autonomous trucks to reduce the overall number of trucks that are required.
- Shippers are very interested in automation as they see it as a clear way to reduce their freight costs substantially and improve utilisation.
Area and Condition of Operation – Autonomous Truck Forecast
The area and conditions in which commercial vehicles are driven will be a strong determinant of the level of automation used and the forecast deployment of the technology. Highway driving in clear and dry conditions, where vehicles travel in one direction in fixed lanes is a relatively simple scenario for automated vehicles to handle. Poor visibility caused by fog or snow will make it harder for the first generation of vehicles to travel, limiting their use in more extreme climates. Interact Analysis believes that automated truck technologies will gain traction first in highway applications, particularly in temperate climate zones that do not regularly see extreme weather conditions.
Cities provide much more complex environments to navigate, with people, varying speed limits and greater traffic density; making it much harder to operate an autonomous truck. It is Interact Analysis’ assumption that greater adoption in cities will come in the second or third generation of automated trucks post 2030.
The one area that may see greater adoption of higher level automation in the short- to mid-term is circumscribed areas (defined, off-highway areas) such as ports, depots, freight yards or similar. These sites have more limited vehicle and pedestrian traffic and vehicles that move on well defined routes. Several start-ups and suppliers are actively investigating the use of automated technologies in these environments to improve the efficiency with which vehicles are moved and improve the safety of vehicles: collisions with other vehicles and loading bays can costs tens of thousands of dollars per month to fleet operators and reducing this expense would impact the bottom line significantly.
Legislation, location of truck and technology companies and the structure of the logistics and freight market all contribute to the likely adoption of platooning and higher levels of automation. The US is forecast to be the early adopter as it has both an active community of companies trialling the technology and a reasonably pro-active legislative environment. China is forecast to be dominant in the long-run given the size of its truck market and the move toward developing its own advanced industries. Europe will be slower to adopt platooning and autonomy, largely because its domestic OEMs are being relatively slow to trial and use the technology. India has the potential to be a sizeable market – because of the overall size of its truck market – but it must develop a positive legislative environment and develop core infrastructure such as better roads and high-bandwidth cellular networks.
Platooning as an Efficiency Technology
In many ways, platooning can be thought of as an efficiency technology, not an automation technology. It requires little in the way of automation (a driver is still present to assist and instigate a platooning event) and it’s primarily designed to save fuel much like driver training, aerodynamics (fairings or similar) or tire pressure monitoring systems are. This means that, realistically, when fleets assess their next generation of vehicles, they will consider where best to invest their resources in saving fuel. Aerodynamics, for example, is relatively low-cost route to improving fuel economy and, as a result, a more complex solution such as platooning that requires training and a change in behaviour may face a challenge in terms of deployment.
Impact on Employment – Autonomous Truck Forecast
One other concern associated with the automation of trucks is that it will lead to massive unemployment. In the next 5-10 years Interact Analysis forecasts that there will be very little impact on driver employment for several reasons:
- First, the uptake of platooning and higher levels of automation will be relatively slow out to 2030. Furthermore, platooning – which is unlikely to see driver replacement – will be the technology of choice out to 2030. This means that there will be very few situations where drivers can be replaced in the short- to mid-term.
- Second, platooning is being positioned as a ‘safety and efficiency’ solution, not a driver replacement technology. The technical requirements for platooning – air brakes, lane keep assist and adaptive cruise control – will, on their own, help to make trucks safer. This will improve conditions for drivers but, more importantly, mean that they are not replaced.
- Third, several of the higher level automation solutions being developed only require driver replacement for highway driving. Drivers would still be required for more complex routes in cities, for example. Highway trips are often viewed as ‘monotonous’ and removing this stage of driving would potentially allow drivers to focus on more engaging/challenging operations.
As the industry moves beyond 2030, it is likely that a growing number of trucks will be operated without drivers. However, this still won’t lead to mass unemployment of drivers. Firstly, many vehicles are driven by someone who is not a driver by employment – think of utility vehicles or emergency vehicles. Even if they are not driving the vehicle, a person onboard is still employed for their primary role. In fact, journey time will likely be used to increase productivity for these individuals. Secondly, there are new roles emerging – such as teleoperator – that will likely support some driver roles. Rather than a cliff-edge, Interact Analysis believes there will be a gradual reduction in employment within the trucking industry.
Within its autonomous truck forecast, Interact Analysis has identified several opportunities for revenue growth associated with the move toward automation in commercial vehicles:
- Provision of hardware for automated and autonomous trucks. Clearly, there will be a significant ramp-up in the number of trucks requiring camera, radar and lidar sensors in addition to control ECUs, air brakes and electrohydraulic steering. This presents a significant opportunity for suppliers who have these products in their portfolios.
- Provision of platooning/automation service. The process of platooning – where it can be done, who benefits from the saving, how it is billed, etc. – presents an opportunity for revenue generation. Truck OEMs will likely want to benefit from this; however, other entities which provide a subscription service model (for example, telcos) may view truck automation as a potential opportunity.
- For off-highway areas such as ports, distribution yards or construction sites, there is little high-quality mapping. These areas lend themselves well to vehicle automation and therefore present an opportunity for mapping companies. Additionally, these areas provide a likely interface between autonomous road vehicles and autonomous mobile robots (AMRs) that are more commonly used inside factories and distribution centres. Currently, there is no integration – handshake or hand-off – between these technologies. There is likely an opportunity for a software layer that enables AMRs to communicate with and ‘call’ autonomous trucks to loading bays.
- End-to-end integration of logistics/freight. As commercial vehicles move to automation, there are a lot of companies working on different parts of the value chain – the trucks, the hardware, the software, the logistics management, the route planning, connectivity/telematics. However, there are few to zero companies focusing on connecting and managing the entire logistics chain in the world of autonomy. There is an opportunity for companies to offer a complete ‘autonomous logistics’ solution that manages factory and supply chain visibility, routing, provision of an autonomous fleet service, etc.
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