A Week of OEM Deals
March 17, 2024
This Week in The Autonomy Economy, The Road to Autonomy Index returned 0.92%, TRATON announced an autonomous trucking partnership with Plus, Forterra and Kalmar announced a co-development agreement and Aurora went driverless at investor day.
Arm announced their expansion into autonomous vehicles with the introduction of their Neoverse V3AE chip design. Applied Intuition announced it has successfully raised a $250 million Series E financing round at a $6 billion valuation. Waymo publicly confirmed commercial operations in Austin are coming later this year.
Alex Roy penned an opinion piece in The San Francisco Standard where he flipped the script and corrected the record about autonomous vehicles on safety and jobs.
Waymo parent Alphabet and Aurora investor and partner Volvo AB are The Road to Autonomy Index component companies
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A weekly newsletter featuring insight and commentary on the autonomy economy™ and how the financial markets are viewing its emergence.
What’s Moving the Markets
TRATON Autonomously Drives with Plus
On March 12th, TRATON GROUP announced TRATON brands Scania, MAN, and Navistar will work with Plus on the development and deployment of factory-grade autonomous trucks in Europe and the United States.
Commercial pilot operations with fleets will commence in 2024. Expected lanes are San Antonio to Dallas in the United States and Södertälje to Nyköping in Sweden.
Our take: The partnership between TRATON and Plus is beneficial for the entire autonomous trucking industry.
Forterra and Kalmar to Co-Develop Autonomous Terminal Tractors
On March 13th, Forterra announced a joint development agreement for autonomous terminal tractors with Kalmar. As part of the agreement, Kalmar will develop the autonomous-ready terminal tractors and Forterra will handle the integration of their autonomous AutoDrive platform.
Scalable production of autonomous systems has always been our focus at Forterra, and our partnership with Kalmar will enable us to jointly deliver a factory-integrated and warrantied system alongside the biggest name in global cargo handling. We think it will be a game-changer for commercial industry.
– Gabe Sganga, Head of Commercial Growth, Forterra
With a looming skill-set shortage estimated by Korn Ferry to be more than 85 million individuals globally by 2030, the time to embrace automation is now. If companies do not embrace automation and integrate autonomous solutions into their workflow, they will be left behind. Their margins will decrease along with their productivity and eventually those companies will have to grapple with a labor shortage.
Japan is currently going through a similar scenario that will be further exacerbated when new labor rules go into effect on April 1st. Today, Japan has a nationwide driver shortage that is projected to grow. By 2030, Japan’s government is estimating a 34% shortfall in trucking capacity.
The shortfall in trucking capacity will have a negative impact on Japan’s economy. The negative impact on their economy could last for years or decades depending on how aggressively Japanese companies invest in automation and deploy it in the field.
Forterra’s development agreement with Kalmar is a step in the right direction when it comes to preparing the global supply chain for a growing labor and skill-set shortage.
Our take: The time to invest in autonomous solutions is now.
Arm Expands into Autonomous Vehicles
As Arm looks to diversify their business, the company is expanding into autonomous vehicles. On March 13th, Arm announced its Neoverse V3AE chip design. This chip design is capable of powering autonomous vehicles.
This is an important step for Arm as 35% of the company’s royalty revenue currently comes from smartphones. In an interview with The Financial Times, Dipti Vachani, Senior Vice President and General Manager of Automotive Line of Business stated that automotive is one of Arm’s growth markets.
Automotive is one of our pillars of our growth and our future.
Dipti Vachani, Senior Vice President and General Manager of Automotive Line of Business, Arm
How quickly Arm can gain marketshare in the automotive industry has yet to be determined. The market for supplying ADAS and autonomous driving chips is heating up as both Arm and Qualcomm are investing in chip designs with the goal of growing royalty revenue and gaining marketshare.
Our take: The next five years will be interesting to watch in the automotive chip sector. There will be many winners and several losers.
Alex Roy Flips The Script
In a March 13th opinion piece in The San Francisco Standard, Alex Roy, co-founder of Johnson & Roy Advisors steps into the autonomous vehicle debate, flips the script and corrects the record. Mr. Roy asserts Waymo’s autonomous vehicles are indeed safe, despite the loud negative headlines and complaints lobbed by special interest groups.
Critics who attack Waymo and autonomous vehicles in general are doing so to protect their own interests. They simply want to further their own agenda to the detriment of society. In this polarized society, those who are louder tend to get the most attention whether right or wrong.
These individuals have a tenacity to bundle everything and weaponize it. Every incident, every company, every word ever spoken, no matter who said it or who did it. It does not matter as long as they can rage against the machine.
Mr. Roy rightly points this out:
The fundamental problem with such a “debate” is that there is no monolithic autonomous vehicle industry to attack or defend. There are many companies working on self-driving cars, with differing hardware, software, business models, safety protocols and timelines. Like any industry, there are good actors and bad actors all duking it out for dominance.
Yet autonomous vehicle opponents insist on smearing all of these companies together.
– Alex Roy
The autonomous vehicle industry is Waymo. They have won. Plain and simple, the robo-taxi market is Waymo. Waymo took the Tortoise approach, while others took the Hare approach. Those who took the Hare approach learned hard lessons that ultimately thwarted their aspirations.
Our take: Well done, Mr. Roy. Thank you for stepping into the debate, flipping the script and correcting the record.
Waymo parent Alphabet is a The Road to Autonomy Index component company
Aurora Goes Driverless at Investor Day
On March 14th, Aurora hosted their 2024 Investor Day in Pittsburgh and showcased how their fully autonomous truck would react to unpredictable scenarios on the road.
At Investor Day Nils Jaeger, President of Volvo Autonomous Solutions announced their purpose built autonomous truck platform — Volvo VNL. The Volvo VNL redundant autonomous truck was designed from the ground up for autonomous trucking and will be unveiled later this year at ACT Expo in May.
Aurora has been testing the Volvo VNL for the past year. As the relationship between Aurora and Volvo strengthens, things begin to get very interesting. When Aurora and Volvo jointly remove the driver and commence commercial operations, the dawn of the autonomy economy becomes one step closer.
If you are interested in learning more about Aurora and Volvo Autonomous Solutions, we would recommend the following podcasts:
- The World’s Best Product is a Very Profitable Product, A Conversation with Sterling Anderson, Co-Founder & Chief Product Officer, Aurora (November 14, 2023)
- Volvo Autonomous Solutions Commercialization Strategy, A Conversation with Nils Jaeger, President, Volvo Autonomous Solutions, Volvo Group (September 5, 2023)
Our take: Aurora continues to make strides as the company move towards commercialization later this year.
Aurora investor and partner Volvo AB is a The Road to Autonomy Index component company
Social Buzz
Applied Intuition Continues to Scale
Applied Intuition led by Qasar Younis and Peter Ludwig continue to scale their vehicle software supplier business. It’s impressive what Applied has been able to accomplish over the last six years. Over the last six years, Applied has become the defacto platform for the development and sim testing of autonomous driving solutions.
On March 12th, the company announced it has successfully raised a $250 million Series E financing round at a $6 billion valuation. New investors include Wall Street luminaries Henry Kravis and Ray Dalio.
If you are interested in learning more about Applied Intuition, we would recommend the following podcast:
- Simulation First Approach to Autonomy, A Conversation with Qasar Younis, CEO & Co-Founder, and Peter Ludwig, CTO & Co-Founder (June 29, 2021)
Next month, Qasar and Peter will once again be joining us on The Road to Autonomy podcast to discuss their latest financing round and what’e next for Applied Intuition. Subscribe today on Apple Podcasts.
Our take: The future is bright for Applied Intuition as the company has maintained sustainable triple-digit percentage growth year-over-year, profitably.
Expanding Commercial Service to Austin in 24
Waymo continues to expand their commercial operations. On Wednesday, March 13th during a talk at SXSW co-CEO Tekedra Mawakana announced Waymo will be launching commercial operations in Austin later this year.
Austin will be Waymo’s 4th City, expanding their service area to 673 square miles across 3 states. The Austin service area will be 43 square miles. While we applaud the expansion to Austin, we question why not Dallas or Houston first?
Dallas and Houston are both larger markets with greater economic potential upside. Could those markets be next or will the long simmering rumored expansion to Miami be next?
Our take: Waymo is still in the early stages when it comes to expanding commercial operations. We expect Waymo to announce two additional cities in 2024.
Waymo parent Alphabet is a The Road to Autonomy Index component company
Testing in the City of No Illusions
This is no illusion. Waymo has been testing weather testing autonomous vehicles on the roads of Buffalo, New York since 2023. Buffalo is one of the snowiest cities in the United States with an average yearly snowfall of 68.8 inches.
What type of weather testing Waymo has been conducting is unknown, but what is known is that this is another step in the evolution of the Waymo driver.
Our take: Will Waymo take the learnings from Buffalo and potentially expand further into Northern California? Anything is possible as the Waymo driver continues to progress.
Waymo parent Alphabet is a The Road to Autonomy Index component company
The Road to Autonomy Index® / Weekly Performance
The Road to Autonomy Index® is a high-definition lens into the emerging world of autonomous vehicles. It is the world’s first and only pure-play index designed to measure the performance of the autonomous vehicle/truck market.
For the week of March 11, 2024, The Road to Autonomy Index returned 0.92%, the S&P 500 returned 0.34% and the NASDAQ 100 declined 0.44%. The Road to Autonomy Index outperformed the S&P 500 by 0.58% and outperformed the NASDAQ 100 by 1.36%.
The top performing stocks in The Road to Autonomy Index this week were:
- Glencore returned 7.58%
- Daimler Truck Holding AG returned 7.31%
- AutoNation returned 7.09%
S&P Dow Jones Indices is the custom calculation agent for The Road to Autonomy Index
Follow The Road to Autonomy Index on Google Finance
The Road to Autonomy Index Component Companies
Latest The Road to Autonomy Podcasts
The Road to Autonomy podcast hosted by Grayson Brulte is a podcast featuring unconventional conversations about the future of mobility and the emerging autonomy economy. New episodes every Tuesday.
Insights into The Rideshare Industry and The Growth of Uber
Harry Campbell aka The Rideshare Guy joined The Road to Autonomy podcast to share his insights into the rideshare industry, the role that power drivers play in the ecosystem and his thoughts on Uber’s growing hybrid network.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Friday, March 15, 2024
Stopping and Swapping: Hybrids for Trucks
Ian Rust, Founder & CEO, Revoy joined The Road to Autonomy podcast to discuss the development of Revoy and why hybrid is the right approach to electrifying Class 8 trucks.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Tuesday, March 5, 2024
The Rise and Fall of Digital Freight Brokerages and the Growth of Autonomous Trucking
Timothy Dooner, Host, WHAT THE TRUCK?!?, joined The Road to Autonomy podcast to discus the rise and fall of digital freight brokerages and the growth of autonomous trucking
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Tuesday, February 27, 2024
Subscribe to This Week in The Autonomy Economy™
A weekly newsletter featuring insight and commentary on the autonomy economy™ and how the financial markets are viewing its emergence.
All price references and market forecasts are as of the date that this newsletter has been sent. The Road to Autonomy is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this newsletter. The information contained in this newsletter does not constitute investment advice and should not be relied upon to evaluate any potential transaction.
Inclusion of a security within The Road to Autonomy Index® is not a recommendation by The Road to Autonomy Indices LLC to buy, sell, or hold such security, nor is it considered to be investment advice.
