Autonomous driving technology revolution is making a paradigm shift in the way transportation industry works. This technology has been on the radar of automotive OEMs  from quite a longer period of time. However, its complete penetration into the passenger vehicle market still seems a distant dream due to many reasons such as technical hurdles, lower consumer acceptance, lack of solid regulatory policies, deficient infrastructure, and others. On contrary, the commercial highway vehicle industry has opened wide arms for higher level of automation pertaining to the increased demand for e-commerce and logistics post the Covid-19 pandemic. In 2020, the supply chain disruption occurred and the need for automation seemed more evident.  

Most of the AV start-ups have reallocated their capitals from passenger carriers to good carriers. Autonomous technology penetration in class-8 trucking has predominantly increased since past 2 to 3 years. 

The top three leading autonomous start-ups having product portfolio targeting trucking business had become public and looking forward to launch their fully autonomous driving technology by 2024.   
 

China’s Inceptio Technology, dealing in autonomous driving truck technology and operation has raised highest funding till date compared to its peers. The company has recently closed $188 million Series B+ equity financing round to introduce more mass-produced L3 and L4 self-driving truck models to the market. In 2021, Aurora Innovation, TuSimple, and Embark launched their Initial Public Offering (IPO) and went public. These three leaders in the autonomous trucking business have cumulatively raised ˜$1.5 billion in funding. Plus.ai has raised $520 million over 5 funding rounds, with latest of $220 million from ClearVue Partners and FountainVest Partners. Pony.ai and Waymo are leaders already in the robotaxi market and have recently unveiled their entry in autonomous trucking and logistics market. 

The massive growth in e-commerce has pushed the shipping companies to increase more freight on the road which further created the challenge of driver shortage in the U.S., Europe, and China. The development in the advance driver assistance technology has been a boon to the logistics and shipping industry. This has created a significant demand for autonomous trucks for first-mile operations as the technology is capable of optimizing the supply chain and the reduce the operations cost significantly.
Moreover, the capabilities of autonomous technology fits perfectly to the environment in which the trucks operate. For instances, the truck routes between the distribution hubs eliminates lots of the more challenging scenarios for autonomous vehicles, such as pedestrians, stop signs, un-protected left turns, turning right on red lights, and other situations which rely on human judgment. Hence, it is more evident that autonomous technology is being deployed in trucks at faster pace and the industry is witnessing significant development towards achieving that. 

The autonomous tech has penetrated not only into the highway trucking but also into the intra city transportation of goods from warehouses to the stores. Since 2020, the autonomous technology has also penetrated into the last-mile operations of the supply chain. Many start-ups have emerged in this space targeting the food and grocery deliveries directly to the consumers involving smaller droids of 20 to 50 lbs. According to M14 Intelligence analysis, the autonomous technology penetration in last-mile delivery business has a potential to cut the cost up to 52% in short-term and up to 75% in long-term. Although the penetration of autonomous technology in quite low at present, however, the demand is expected to grow dramatical over next 5 years. In terms of volume, the autonomous logistics vehicles (L4 and L5) are anticipated to grow at a CAGR of 87% from 2022 to 2030. The industry is expected to witness a dramatic spike in the volume of autonomous vehicles in 2024 and 2025, as OEMs and technology companies have set their launch timelines during the same period.   

The United States is a clear leader in developing and deploying autonomous vehicle technology. The country’s autonomous logistics vehicles volume shipment is estimated at xx units in 2022 and expected to reach xx million units by 2030. In the U.S., both the federal government and states have issued AD-related regulations, helping companies to progress towards commercialization. According to NHTSA, there are total 121 testing sites currently being permitted for testing of autonomous vehicles, of which 14 highways, 7 Universities, 5 Business campuses, and 2 sidewalk or pathways are dedicatedly being used to test autonomous logistic vehicles. Companies including Yandex, TuSimple, Valeo North America, Nuro, Locomation, Kodiak Robotics, Gatik AI, Embark, and Aurora Innovations are full-fledged working towards testing and deploying autonomous technology on these permitted U.S. roads.

 According to American Transportation Research Institute’s data, driver costs on and average 42% of total freight revenue. The introduction of autonomous technology into freight transportation has the capability to reduce this cost significantly. Moreover, fuel efficiency is critical for road freight transportation, the application of autonomous technology in trucks could achieve around 10% reduction in the fuel consumption. The advent of autonomous technology can alleviate the constraints on the supply side and fulfill the unmet demand in road logistics. The average selling price of level 4/5 highway trucks is currently estimated at $xx and with mass production and commercialization, the ASP is expected to decline to $xx.
 
The package and food delivery industry has witnessed tremendous growth, recording $150 billion in 2021. Moreover, there is no shortage of funding for the continued development of sidewalk delivery technology as billion-dollar partnerships leveraged among many of the existing and upstart transport, and tech companies including FedEx, Amazon, Yandex, Magna International, Uber Eats, 7 Eleven, Co-op, JD.com, and Alibaba. The average cost of one fully autonomous sidewalk robot is estimated at $xx which is expected to further reduce over the years as the industry reached mass-production and commercialization stage.   

    

Unlike the Robotaxis or the autonomous passenger vehicles, autonomous trucks have thrived through technological challenges and regulatory policies. Autonomous trucks are now a crucial part of supply chains’ first-mile delivery segment. The start-ups in this segment have progressed exponentially with billions of dollars of investments from venture capitalists and tech giants, while few of them have become public in matter of just 5-6 years. The leader in this space includes TuSimple, Plus.ai, Embark, Aurora, Kodiak Robotics, and Einride. 
Quite few companies have realized the loopholes of the supply chain and have taken steps to optimize the ‘middle-mile’ delivery stage of logistics industry by deploying autonomous electric vans. Gatik, the U.S. based start-up is currently dominating the U.S. middle-mile logistics market by partnering with e-commerce giants such as Walmart.  While NuPort has wide reach over the Canadian market with government funding. Torc is a subsidiary of Daimler Trucks and together the companies are progressing towards accelerating the deployment of autonomous vehicles for B2B applications and optimizing the supply chain cost. 
Last Mile delivery is the most critical part of the supply chain as it involves direct contact with the customers. Post Covid-19, the demand for autonomous, contactless, and on-demand deliveries have boomed and players such as Starship Technologies, Kiwibot, Udelv, JD Logistics,  Neolix, Nuro, and others have very satisfactorily served the customers with their small autonomous delivery robots/vehicles. Multiple robotics start-ups have entered this last-mile delivery segment since past 2 to 3 years as it holds high growth prospect.