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For the long haul

15 March 2019 By Sharon Lam

Chinese autonomous startup TuSimple has piled in to the U.S. commercial trucking market, lured by greener pastures abroad. Muddled regulations have made China less attractive despite heavy government support. As trucks travelling regular routes are easier to automate than cars navigating traffic, Beijing’s slow start could suggest a bigger problem.

It is understandable why TuSimple, backed by chipmaker Nvidia and Chinese search portal Sina among others, is attracted to the vast U.S. highway network. The local trucking market generated over $700 billion in revenue in 2017, according to industry association data. But companies are struggling to recruit; the average American trucker is around 50 years old: in short, ripe for automation.

TuSimple says it is already making “level 4” deliveries in Arizona – fully independent vehicles slightly less adaptable than human drivers – and will soon do the same in Texas. That’s an impressive start given the competition: Alphabet’s Waymo is in the market, as well as automakers like Tesla, Daimler and Volvo. The thesis is that autonomous trucking offers a quicker route to commercial viability than passenger vehicles, which are more challenging technologically and legally.

China has moved more slowly. The U.S. Department of Transportation released a first draft of AV policy guidance in 2016; more than half of the states have introduced related legislation. By contrast, China’s national guidelines on AV road tests were released last April. There are other obstacles. China’s freight industry is regionally fragmented, and employs hordes of drivers who tend to protest, sometimes violently, layoffs or salary cuts. Local officials often support labour in such cases, which discourages companies from replacing them with AI.

Top Chinese software engineers are also flocking to Silicon Valley, following Baidu, which plans to pair up with California’s Udelv to build autonomous delivery vans for Walmart. Brain drain could keep the technology gap wide; a McKinsey report argues AV adoption in the People’s Republic could trail the United States by as much as three years.

Beijing hopes to close the gap; economic planners expect half of the new vehicles sold in China to have some autonomous functions by 2020. Equity funding for Chinese trucking startups has overtaken American investment in the last three years, according to CB Insights. Money will help, but the road still looks long.

 

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