China’s truck industry buys more driver assistance technology

People attend a launch ceremony for Inceptio’s autonomous driving system on March 10, 2021 in Shanghai, China. | Visual Group China | Getty Images

BEIJING — China’s truck industry is finding more and more reasons to buy vehicles with assisted driving technology.

It’s a crucial step toward monetization in a fledgling company that has attracted many investors, with relatively little results so far.

One of the major transformations is that China’s trucking industry is moving from a sector dominated by individual drivers to one where fleets hold the majority share, said Gui Lingfeng, director at Kearney Strategy Consultants .

He pointed out that five years ago, fleet operators only held about 20% of China’s trucking market. Today it stands at 36% and is expected to reach 75% in 2025, he said.

Companies trying to sell trucks to fleet operators are including driver assistance technologies as a way to make the vehicles more attractive, Gui said.

This early technology integration gives truck makers an advantage in the amount of data they can collect – to train self-driving algorithms, he said.

Additionally, Chinese authorities require all newly manufactured trucks since 2022 to be equipped with basic driver assistance technology to warn of frontal collisions and lane departures, Gui said.

Chinese driver-assisted trucking startup Inceptio says it already has more than 650 trucks operating in China – mainly for logistics customers – and has traveled more than 50 million kilometers (31 million miles) under commercial operations.

“The economy is tightening, so the motivation to save costs becomes stronger, not weaker, making our customers more eager to use our products.

Inceptio develops the driver assistance technology system and works with original equipment manufacturers (OEMs) for mass production.

“In terms of customers, there’s sort of a countercyclical effect,” Inceptio CEO Julian Ma said in an interview in late August. “The economy is tightening, so the motivation to save costs becomes stronger, not weaker, making our customers more eager to use our products.”

Express delivery customers

Chinese logistics companies have seen enormous growth in recent years, driven by the rise of e-commerce. This has led to price wars, amid slowing economic growth.

Industry giant SF Holdings reported a 5.1 percent decline in operating revenue to 189 billion yuan ($25.97 billion) in the first three quarters of the year, including a decline by 6.4% year-on-year during the third quarter alone.

But vehicle upgrade cycles can support continued truck sales.

Truck operators typically replace vehicles every four to five years, Ma explained. “In China, there are about 7 million heavy-duty trucks. Even though the market is experiencing zero growth, every year there are between 1,000,000 heavy-duty trucks. 2 and 1.5 million new sales.”

The startup claims its trucks cost about 5% less than traditional options, in addition to safety and environmental benefits.

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Already, on average, about 95 percent or more of a thousand-kilometer truck trip is managed by the computer, meaning the driver is mostly in sleep mode, Ma explained. “So the workload is considerably scaled down.”

Ma said Inceptio would focus over the next three years on cost-sensitive customers, such as in logistics. He expects driver assistance features to dominate over the next few years, with 2028 being the most optimistic scenario for commercial deployment of fully driverless trucks.

The ability to completely remove drivers will result in the greatest savings for truck operators.


Waiting to prove an inflection point

Yole Intelligence analysts are closely monitoring whether robotruck companies can meet production and delivery targets set for the next two years.

It’s a $2 trillion market, of which China accounts for about $650 billion to $750 billion and the United States a little more, said Hugo Antoine, technology and market analyst, IT and software. , at Yole Intelligence, which is part of the Yole group.

“This is the reason why many investors invest in this market,” he said. “Because if you have one percent or two percent of that market, that’s huge.”

However, it’s unclear how quickly regulators will allow fully driverless trucks on most roads, even if operators want to buy them.

“Even when the industry is technically ready, I think in any part of the world the transport regulator will still take a year, or even two years, to validate the data and carry out their own tests before they can issue the permit driverless,” said Inceptio’s Ma. .


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