Trucks catch up in the self-driving vehicle race

• Data shows that more investors are turning to autonomous trucks
• Startups that focus on less complex driving environments
• Truck manufacturer Robotic Research receives new financing agreement

OXFORD, UK, December 9 (Reuters) - If Elon Musk had been right, we would all be whizzing around in robotaxis by now.

Instead, fully self-driving cars are battling to get off the grid, and some investors are betting that driverless trucks will cross the checkered flag first.

Just a year ago, startups developing robotic taxis were drawing in eight times more money than companies working on autonomous trucks, buses, and logistics vehicles, but the gap narrowed dramatically in 2021.

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With fewer regulatory and technological hurdles, trucks used on highways, fixed delivery routes, or in environments away from cyclists and pedestrians such as mines and harbors are now seen as a faster way to generate returns.

According to the startup data platform PitchBook, total investment activity for self-driving logistics vehicles increased fivefold by December 6, from 1.3 billion US dollars in the same period in 2020 to 6.5 billion US dollars.

Investment activity for robot taxi companies fell 22% from $ 10.8 billion to $ 8.4 billion over the same period, according to PitchBook data compiled for Reuters.

The numbers might even underestimate the trend, as some robot taxi companies, like Alphabet Inc's Waymo (GoogL.O), are also pumping more money into their own autonomous trucking operations.

In its most recent truck deal, Robotic Research announced Thursday that it had raised $ 228 million by first tapping into outside investors to expand its autonomous truck, bus, and logistics vehicle business.

The new money comes from investors like SoftBanks (9984.T) Vision Fund 2, Enlightenment Capital and Luminar Technologies (LAZR.O), which make lidar sensors for self-driving cars.

Alberto Lacaze, chief executive of Robotic Research, told Reuters that the company is deploying autonomous vehicles on a large scale, where the business case for customers "now" works.

"You don't have to wait until 2025, unlike robotic taxis, which have to cut the cost of all sensors by an order of magnitude," he said.

REVIEWS

In 2019, Tesla's (TSLA.O) Musk had promised a million robotic taxis “safe next year”, but self-driving cars that can safely navigate anywhere are still a long way off.

Peter Rawlinson, head of electric vehicle startup Lucid Motors, said last month it would be a decade before robot fleets hit the streets - even with the most advanced sensors.

PitchBook's lead mobility analyst Asad Hussain said startups like Gatik, which makes short-range autonomous vans, and Nuro, with its mini delivery robots, could dwarf Waymo and eclipse Cruise in large-scale commercialization for the next several years place.

Although long-haul trucks are easier to automate than robotic taxis because large freeways are easier than busy city streets, executives at self-driving trucking companies are wary of how fast they can ramp up.

"We are aware of the exaggerated promises the industry is making," said Cheng Lu, CEO of technology company TuSimple (TSP.O), which went public in April with a market value of $ 8.5 billion.

"The industry now understands the complexity of the problem and that it will take longer to resolve," he said.

TuSimple currently has a fleet of around 50 trucks with safety drivers on board that traverse the warmer southern states of America, but it plans to have a national network for major U.S. highways by 2024.

These include major investments in highway mapping, learning to deal with tougher weather and road conditions further north, and in new self-driving trucks being developed by Navistar, which is part of Volkswagen's Traton (8TRA.DE).

'A LONG JOURNEY'

However, establishing a truly national network could take years as self-driving trucks still face one major challenge: the human driver.

An autonomous vehicle will always hit the brakes when it encounters a "testosterone-laden human being", says Ralf Klaedtke, Chief Technology Officer at TE Connectivity (TEL.N), which manufactures sensors and electronic systems for handling masses of self-driving data for the auto industry.

“The autonomous vehicle will always be the slowest in mixed traffic,” he said.

Paul Newman, founder of the British software startup Oxbotica for autonomous vehicles, says robotaxis will remain its "North Star", its clear long-term goal.

For now, however, he's focused on simpler applications, some of which use a purpose-built, all-electric self-driving vehicle from Australian startup Applied EV.

“It's a long journey,” he says as he demonstrates test vehicles at the company's headquarters in Oxford, England. "It's one of the most difficult technical problems to solve."

Oxbotica is working in partnership with Wenco, part of Hitachi Construction Machinery (6305.T), on vehicles for mines and on many different options with energy company BP (BP.L), such as vehicles for remote wind and solar parks.

Morag Watson, senior vice president of digital science and engineering at BP, said Oxbotica's technology could monitor large sites or move devices to people who are doing repairs. She said they would test a lot of different options in 2022.

"We have barely scratched the surface of what we can achieve with industrial autonomy," said Watson.

Oxbotica also works with UK online grocery and technology company Ocado (OCDO.L), which automates supply chain systems for companies like US retail chain Kroger (KR.N). BP and Ocado both invested in Oxbotica.

Alex Harvey, head of advanced technology at Ocado, said Oxbotica's technology could be used "in the warehouse, in the yard, on the street or on the curb to the kitchen."

NO LEFT WAYS!

The US manufacturer of autonomous electric vehicles Outrider has targeted distribution centers - it picks up trailers after truckers have dropped them off and provides new ones for removal - including at a yard in Chicago for the Georgia-Pacific paper company.

Outrider has developed a robotic arm for the truck to connect and disconnect trailers. The company has raised $ 118 million to date, and Chief Executive Andrew Smith says it will scale to thousands of vehicles over the next five years.

The startup wants to make short jumps between yards, but operating on public roads adds complexity, Smith said.

"We saw through the early hype about the technology and realized that with its repetitive, slow operation in tight spaces, distribution centers were the perfect short-term solution," he said.

Going out on public roads requires careful movement, partly due to regulations but also due to legal pitfalls in a contentious market like the United States.

Ian White, chief executive of digital insurer Koffie Labs, said a "billion dollar black swan" crash could wipe out any company that moves too fast and gets it wrong.

"You would be putting your balance sheet on the line," he said.

Because of this, Gatik has taken a careful approach to its "middle mile" delivery routes between distribution centers and retailers, said Chief Executive Gautam Narang.

Gatik trucks drive short, predictable routes and avoid left turns in oncoming traffic, schools, hospitals, fire brigades, blind turns - or anything complicated.

"We don't work on every tricky situation that the autonomous vehicle industry is trying to solve," he said. "We're taking small steps with routes that are uneventful from a complexity standpoint."

Gatik works with Walmart Inc (WMT.N) and Loblaw Companies Ltd (L.TO), which use autonomous trucks with safety drivers, although it operates some driverless routes in Arkansas and sees the global driver shortage as an opportunity.

“We decided to focus on a simpler use case where the need was huge,” said Narang. "We don't build technology for technology's sake."

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Reporting by Nick Carey in Oxford and Paul Lienert in Detroit; Adaptation by David Clarke

Our Standards: The Thomson Reuters Trust Principles.

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