This week, we’re cleaning up after a flurry of news in the autonomous vehicle space and seeing the first concrete evidence that the chips are down for truck manufacturers.
Construction alert
One went public. One went virtual. Another expanded in China. After an unusually busy week in the autonomous vehicle space, what could possibly be left to talk about?
Let’s start with construction zones. They present a vexing yet all-too-frequent challenge for designers of perception software expected to be ready for, well, anything. Embark Trucks, which autonomously hauls freight between its terminals while growing its database, is sharing information about them with the Arizona Department of Transportation (ADOT).
This is a big deal because, as Embark points out, nearly 1,000 traffic accidents — and about 15 deaths — occur in Arizona work zones every year. Three out of 10 fatal crashes in work zones and 10% of injuries involved at least one large truck in 2018. Nationally, 123,000 work zone-related crashes resulted in 757 preventable fatalities that year.
Embark will brief ADOT on the pace of automated vehicles and share data from its operations on infrastructure, road design and how much information is publicly available on work zones. In this video, Embark claims to be first to train its trucks to move over a lane to avoid work zones.
Embark is pursuing a middle-mile approach to long-haul automated trucking. It operates its Level 4 software only on limited-access highways and short off-highway segments leading to distribution centers.The startup thinks its approach will win out as the safest and most practical.
China questions
Plus CEO David Liu is confident that his company is no different than any other in partnering with China state-run businesses. Plus partners with First Auto Works (FAW) and is the preferred Level 4 automation technology for China’s biggest truck maker. A lot of the $400 million Plus has raised to date is from Chinese investors.
Liu is probably right, as long as Plus remains a private company. That could change if and when it goes public.
Consider rival TuSimple. Its S-1 prospectus to sell public stock filed with the Securities and Exchange Commission this week flagged a regulatory risk due to its Chinese funding source.
According to TechCrunch, the Committee on Foreign Investment in the United States (CFIUS) asked March 1 for a written notice from TuSimple regarding an investment by Sun Dream, which is TuSimple’s largest shareholder with 20% of Class A shares.
If the U.S. government decides Sun Dream’s stake poses a threat to national security, Sun Dream may be told to divest. TuSimple co-founders Xiaodi Hou and Mo Chen each own 50% of the Class B voting stock in TuSimple.
On the horizon is another possible sticky situation. FAW is negotiating with CNH Industrial N.V. (NYSE: CNHI) to buy its truck-making Iveco subsidiary. Iveco builds electric trucks in a joint venture with startup Nikola (NASDAQ: NKLA). If the sale goes through — expect a decision in April or May — FAW presumably becomes Nikola’s manufacturing partner.
In case you were wondering …
Until recently, Plus called itself Plus.ai. Why the change?
“First of all, everything we do is these days in the broader industry is AI,” Liu told me this week. “So it’s like dot-com. It’s synonymous to any technology company. Secondly, most of our customers remember our name as Plus. They fondly call us Plus. So we might as well call ourselves Plus.”
The chips are down
The worsening shortage of microchips is finally bringing downtime to truck manufacturing. Sweden-based Volvo Group predicts a “substantial impact” on second-quarter production.
Stoppages could be from two to four weeks depending on the plant. That includes Volvo Trucks North America and Mack Trucks plants in Virginia and Pennsylvania, respectively. Mack spokeswoman Kimberly Pupillo called the situation fluid but said some down days at Mack’s Lehigh Valley Operations are likely.
“It’s a good time to have trucks, and it’s a good time to have newer trucks,” Logistics Management quotes Werner Enterprises CEO Derek Leathers. Fleets are looking for recent model used trucks as a stopgap until new trucks they have ordered are delivered.
With a backlog at its highest level since March 2019, the waits are getting longer even as orders continue to pour in. ACT Research predicts 300,000 retail sales this year, 40% higher than pandemic-impacted 2020.
It’s just coincidence that the downtime is coming in the same month as most truck manufacturing halted during the first wave of COVID-19 in April 2020.
This and that …
So what does it cost to operate an electric truck compared to a diesel truck? Peterbilt is offering an EV operating cost calculator to help fleet managers answer that question. … Score another medium-duty engine truck win for Cummins Inc. (NYSE: CMI), its third in the last two months following deals with Daimler Trucks and Isuzu Commercial Truck of America. Two SPAC-backed startups find each other with Proterra supplying batteries to startup Lighting eMotors for Class 3 delivery vans.
Speaking of SPACs (and aren’t we always), Pitchbook’s EV/Mobility SPAC Handbook counts 26 blank check company reverse mergers in 2020 with mostly pre-revenue startups. Combined valuation exceeded $100 billion. That doesn’t count the flurry in the first three months this year in which the total number of SPACs (296) exceeds the 2020 frenzy of 248, according to SPAC Insider.
Toy story
Volvo CE sold 1 million excavators, loaders, haulers and trucks in the last 12 months. Toys, that is. Collaborating with Germany’s Dickie Toys, Volvo is present in almost every major toy store. Volvo CE also licenses Lego Technic and Bruder, among others. Volvo Trucks and Mack Trucks are also in the mix.
That’s it for this week. Thanks for reading. Like it? Subscribe here to get Truck Talk in your mailbox every Friday.
Alan
