On March 10, 2021, people attended the launch ceremony of the Inceptio autonomous driving system held in Shanghai, China.
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BEIJING — China’s truck industry is looking for more reasons to buy vehicles equipped with driver-assisted technology.
It’s a key step toward monetizing a nascent business that has attracted money from many investors but has so far had little success.
One broad shift is that China’s trucking industry is moving from being dominated by individual drivers to having fleets taking a majority share, said Gui Lingfeng, principal at AT Kearney Strategy Consultants.
He pointed out that five years ago, fleet operators only accounted for about 20% of China’s freight market. He said this ratio currently stands at 36% and is expected to reach 75% by 2025.
Companies trying to sell trucks to fleet operators are adding driver-assistance technology to make the vehicles more attractive, Gui said.
Early integration of the technology gives truckmakers an advantage in the amount of data they can collect to train self-driving algorithms, he said.
In addition, Chinese authorities require all newly manufactured trucks to be equipped with basic driver assistance technology to warn of forward collisions and lane departures starting in 2022, Gui said.
Inceptio, a Chinese assisted driving trucking startup, claims that it has operated more than 650 trucks in China (mainly for logistics customers) with more than 50 million kilometers (31 million miles) of commercial operating mileage.
“The economy is getting tighter and the incentive to save costs is getting stronger, not weaker, which makes our customers even more eager to use our products.
Inceptio develops driving assistance technology systems and cooperates with original equipment manufacturers (OEMs) for mass production.
“As far as customers are concerned, there is a certain counter-cyclical effect,” Inceptio CEO Maszlee Malik said in an interview in late August. “The economy is getting tighter, so the incentive to save costs is getting stronger, not weaker, making our customers even more eager to use our products.”
Express customers
Logistics companies in China have experienced tremendous growth over the past few years due to the rise of e-commerce. This has led to price wars amid slowing economic growth.
Industrial giant SF Express Holdings reported that its operating income fell 5.1% to 189 billion yuan ($25.97 billion) in the first three quarters of this year, and the third quarter alone saw a 6.4% annual decrease.
But the vehicle upgrade cycle can support continued truck sales.
Ma said truck operators typically replace their vehicles every four to five years. “There are about 7 million heavy-duty trucks in China. Even if the market growth is zero, the annual new sales will be between 1.2 and 1.5 million.”
The startup claims that in addition to safety and environmental benefits, its trucks cost about 5% less than traditional options.
Ma said an average of 95 percent or more of a truck’s 1,000-kilometer journey is processed by computers, meaning the driver spends most of the time in standby mode. “So the workload is reduced a lot.”
Jack Ma said that Inceptio’s focus in the next three years will be cost-sensitive customers, such as the logistics field. He expects driver assistance features to dominate in the coming years, with 2028 being the most optimistic scenario for commercial deployment of fully driverless trucks.
Being able to eliminate drivers entirely will provide the greatest cost savings for truck operators.
platooning
Other startups are testing different forms of driver-assisted trucks in China.
Kargobot, backed by ride-hailing giant Didi, operates more than 100 self-driving trucks between Tianjin, near Beijing, and the northern province of Inner Mongolia.
Many of these trucks operate through what’s known as platooning—having a human driver in the front vehicle and two or three trucks following behind in fully autonomous mode with no human workers inside.
Wei Junqing, CEO of Kargobot, expects that in the next one or two years, A network of hubs on the edge of cities, connected by highways on which self-driving trucks transport products. This was the conclusion he came to in an October speech at the CNBC East Tech West conference in Nansha District, Guangzhou, China.
Waiting for proof of inflection point
Analysts at Yole Intelligence are keeping a close eye on whether robot truck companies can meet the production and delivery targets set over the next two years.
It’s a $2 trillion market, with China accounting for about $650 billion to $750 billion and the U.S. slightly more, said Hugo Antoine, computing and software technology and market analyst at Yole Intelligence, a division of Yole Group. .
“That’s why we have a lot of investors investing in this market,” he said. “Because if you take one or two percent of this market, it’s huge.”
However, it’s unclear how quickly regulators will allow fully driverless trucks to operate on most roads, even if operators want to buy them.
“Even if the industry is technically ready, I think anywhere in the world it will take a year or even two years for transportation regulators to validate the data and conduct their own testing before they can,” said Inceptio’s Jack Ma. Issue driverless license.”
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