Autonomous Vehicles in Logistics Industry (First, Middle and Last Mile) - Edition 2023

The autonomous driving technology revolution is making a paradigm shift in the way the transportation industry works. This technology has been on the radar of automotive OEMs for quite a long 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 a higher level of automation pertaining to the increased demand for e-commerce and logistics post the Covid-19 pandemic. In 2020, a supply chain disruption occurred and the need for automation seemed more evident.

Most of the AV start-ups have reallocated their capital from passenger carriers to good carriers. Autonomous technology penetration in class-8 trucking has predominantly increased in the past 2 to 3 years. Close to $4 billion in funding has been recorded in the autonomous trucking industry since 2016. The top three leading autonomous start-ups having product portfolios targeting trucking businesses have become public and looking forward to launching their fully autonomous driving technology by 2024. China’s Inceptio Technology, dealing in autonomous driving truck technology and operation has raised the highest funding to date compared to its peers. The company has recently closed a $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 the 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 into the autonomous trucking and logistics market. Waymo has raised funding of $2.25 billion from external investors, post which it formally announced the launching of Waymo Via, an autonomous trucking segment. The investment pumped for this segment is estimated to be around $500 million. In the latest Series D funding round of an undisclosed amount, Pony.ai is estimated to have raised around $100 million for its robotruck product.

The massive growth in e-commerce has pushed 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 of advanced 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 fit perfectly into the environment in which the trucks operate. For instance, the truck routes between the distribution hubs eliminate 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.

Autonomous tech has penetrated not only into highway trucking but also into the intra-city transportation of goods from warehouses to stores. Since 2020, autonomous technology has also penetrated into the last-mile operations of the supply chain. Many start-ups have emerged in this space targeting food and grocery deliveries directly to the consumers involving smaller droids of 20 to 50 lbs. According to publisher analysis, autonomous technology penetration in the last-mile delivery business has the potential to cut the cost by up to 52% in the 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 the next 5 years. In terms of volume, 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. According to American Transportation Research Institute’s data, driver costs are and average of 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, and the application of autonomous technology in trucks could achieve around a 10% reduction in fuel consumption. The advent of autonomous technology can alleviate the constraints on the supply side and fulfil 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 expanding demand for home delivery and the increased pressure for faster delivery comes at a time when providers are facing a labour shortage and rising costs. On-road delivery vans with autonomous technology is offering a cost-effective solution to delivery and shipment companies.

Key Questions Answered in the Report

• What is the current status of Autonomous Vehicles in Logistics industry?
• What growth potential does this technology holds in coming 5 to 10 years?
• Which factors are attributing to the growth of AV market and what is the degree to impact?
• How is the market penetration of autonomous logistics vehicles in major economies?
• How is the market potential for autonomous vehicles in First-mile, Middle-mile, and last-mile operations?
• Which vehicles amongst the autonomous trucks, on-road delivery vehicles, and sidewalk robots have highest demands?
• Which companies are leading in terms of testing and deployment and which companies are the entering the market?
• What is the autonomy package cost of autonomous logistics vehicles? 
• What is the sensor content for each type of autonomous logistics vehicles?
• What are the entry barriers for the start-ups and how much growth potential does this sector holds?
• How much funding or capital investment has been made in autonomous logistics vehicle segment over past 3  years?
• Which markets are expected to drive the demand for autonomous logistic vehicles?
• Which geographic markets are expected to have highest penetration of autonomous logistics vehicles?
• What is the projected sales demand for all types of autonomous vehicles in logistics industry?