China’s truck industry is rapidly shifting towards purchasing vehicles with assisted-driving technology. This shift is crucial for the industry’s monetization in a business that has attracted vast investment but shown limited results so far.
The market has seen a major transformation from being dominated by individual drivers to fleet operators holding the majority share. Currently, fleet operators control around 36% of the Chinese trucking market, a significant increase from 20% just five years ago. It’s projected that fleet operators will own a 75% share by 2025. As a result, truck manufacturers are incorporating driver-assist tech to attract fleet operators, according to Gui Lingfeng, principal at Kearney Strategy Consultants.
This early integration of technology provides truck manufacturers with a competitive edge in collecting data for training autonomous driving algorithms. Additionally, all newly manufactured trucks in China are required to come equipped with basic driver-assist tech for warning against forward collision and lane departure.
Inceptio, a Chinese driver-assist trucking startup, claims to have over 650 trucks operating in China and has covered more than 50 million kilometers in commercial operations. Inceptio’s CEO, Julian Ma, emphasized that there is a strong motivation for cost-saving in the current economic climate, making customers more eager to use their products.
Similarly, China’s logistics companies have experienced significant growth due to the rise of e-commerce, leading to price wars amid a slowdown in economic growth. However, vehicle upgrade cycles continue to support truck sales with truck operators replacing vehicles every four to five years.
Inceptio anticipates that driver-assist features will dominate the market for the next few years, with the most optimistic scenario for the commercial deployment of fully driverless trucks by 2028. This could result in significant cost savings for truck operators.
Other companies such as Kargobot are also experimenting with autonomous driving trucks, envisioning a network of hubs connected by highways on which self-driving trucks transport products. Analysts are closely monitoring the progress of such companies as the global market for autonomous trucks represents a trillion-dollar industry. Despite significant technological advancements, the regulatory approval for fully driverless trucks remains uncertain in many parts of the world. Even when the industry is technically ready, the validation and testing process by transportation regulators could take an additional year or more before fully driverless trucks are approved for use.
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