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Inside China’s Futuristic New “Super Truck” Shipping Solution

Tuesday, November 29, 2016 8:09
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From Jon Markman: The $300 billion Chinese trucking market is filled with long hauls and chaos. The government and technology firms are betting that self-driving 18-wheelers are the solution.

Earlier this month at the Shanghai New International Expo Center, the Internet services company Baidu (BIDU) and Foton Motor Co. Ltd. showed off Super Truck. Apart from its array of sensors and distinctive surround windshield, the autonomous freight truck would not stick out in a crowd of ordinary diesel burners.

That’s because it’s not from the future. China needs an answer to its freight logistics problem now, before the administration of President-elect Donald Trump can intervene. That urgency gives Chinese firms a big leg up in the race to autonomy and patent windfalls.

You would expect a country with China’s economic growth and expansive area to experience problems. There are 7.2 million trucks and 16 million drivers serving 5.9 million square miles of thorny countryside. Many trips involve very long hauls. Some require two or three drivers.

Credit: Photo as was provided to chinadaily.com.cn.

China’s self-driving Super Truck may soon challenge American autonomous
trucks to see who’s king of the road.

It doesn’t take a math whiz to figure out there is an innovation opportunity. Ng Yi Pin, of the Chinese venture capital firm Yunqi Partners, is sanguine. “The economics from labor and fuel-efficient savings are significant,” he says, “so market forces will make it happen.”

Super Truck uses limited self-driving automation developed by Baidu and Foton’s Big Data algorithms for connected cars and driverless commercial fleets. It offers dramatically reduced man hours and fuel consumption. That is definitely something that can be sold to vehicle makers.

“We’ll further collaborate with commercial-vehicle original-equipment manufacturers (OEMs) to develop self-driving solutions and build typical application scenarios,” said Gu Weihao, general manager of Baidu Intelligent Vehicle. “On the other hand, being one of the pioneers in the industry, we’d like to introduce more self-driving technology providers to participate and grab a piece of the market share.”

That is not great news for competitors outside of China. Daimler, Volvo and Uber all have autonomous systems for trucks in the works. In fact, Otto, a company recently purchased by Uber, used a self-driving truck to deliver 50,000 cans of Budweiser beer in a publicity stunt.

The idea was to prove that the massive, software-guided freighters are safe. The cool Buds served the narrative. It was also supposed to show Silicon Valley was in the lead in the race to autonomy.

“The technology is ready to start doing these commercial pilots,” Otto co-founder Lior Ron told Wired in October. “Over the next couple of years, we’ll continue to develop the tech, so it’s actually ready to encounter every condition on the road.”

Self-driving trucks spend most of their time on the interstates. Far away from problematic stuff like pedestrians or Fido running out into traffic. Grabbing a big share of the $700 billion U.S. trucking market seems like a safe bet.

Unfortunately, that was before the Chinese took a shine to the same market. Technologies being developed in China under a more lenient regulatory regime may win patents and get to market in the United States first, despite any attempt by the Trump administration to block them.

I still think the best single bet on autonomous trucks and cars is the chip-maker Nvidia (NVDA), but we need to watch out for the Chinese hardware and software providers as they roll down the road.

This article is brought to you courtesy of Money and Markets.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)

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