Asset Management Equity Business Thematic

Asset Management Equity Business Thematic

July 2016
Asset Management Equity Business
Thematic Insights: Robotics, Security & Safety
Truck Platooning: A first real step in autonomous driving?
Dr. Patrick Kolb, Fund Manager, Credit Suisse
“However, when self-driving cars become safer than humandriven cars, the public may outlaw the latter. Hopefully not.”
Elon Musk, Chairman/CEO/Co-Founder of Tesla
Dear Reader,
In April 2016, six convoys of more than a dozen self-driving trucks drove across Europe to Rotterdam’s harbour.
The leading vehicle of each convoy dictates speed and direction, while the rest automatically steer, accelerate, and
brake in sync. Each truck is connected via Wi-Fi, GPS, sensors and cameras to ensure travelling behind one
another. “It was a little eerie to hand over part of my role as driver,” says Michael Kropp, a test driver for Daimler.
“But it was really comfortable, especially in heavy traffic or boring stretches of road.1”
Over the past one hundred years, innovation within the automotive sector has brought several major technological
advances, leading to safer, cleaner and more affordable vehicles for the society. As of today, we think this industry
appears to be on the cusp of a revolutionary change. We believe the long term consequences of truck platooning
are enormous and the effects go far beyond the traditional transportation sector. Self-driving vehicles have a great
potential to improve the lives of billions of people. Therefore, in our opinion automated driving and smart mobility
offer realistic chances to optimise the labour market, infrastructure, logistics as well as our society.
Source: Bloomberg (2016): Convoys of Automated Trucks Set to Point Way to Driverless Cars, April 22nd 2016, URL:
http://www.bloomberg.com/news/articles/2016-04-22/convoys-of-automated-trucks-set-to-point-way-to-driverless-cars, 10.6.2016.
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What is the EU truck platoon challenge?
During its Presidency of the European Union in 2016, the
Netherlands have initiated a European Truck Platooning
Challenge. Six truck producers, DAF Trucks, Daimler Trucks,
Iveco, MAN Truck & Bus, Scania and Volvo Group, have been
driving in columns (platooning) on public roads from several
European cities to Rotterdam2. Map 1 shows the routes of each
truck convoy. Scania left from Södertalje, south of Stockholm,
drove through Sweden, Denmark and Germany to Maasvlakte II in
the Port of Rotterdam. Volvo started from Gothenburg and drove
through the same countries as Scania. Daimler started from
Stuttgart and MAN from Munich (both in Southern Germany) while
IVECO departed from Brussels and DAF from their production
location in Westerlo, Belgium. Scania had the longest route in the
European Truck Platooning Challenge with over 2’000 kilometers
and had to cross four borders. On April 6th 2016 all trucks arrived
without accidents at the harbor of Rotterdam.
Map 1: European Truck Platooning - The
voyage to Rotterdam
Stockholm
Gothenburg
Rotterdam
What are the advantages?
Westerloo
The aim of this EU truck platoon challenge was to bring platooning
one step closer to implementation. Truck Platooning comprises a
Brussels
number of trucks equipped with state-of-the-art driving support
systems: one closely following the other. This forms a platoon with
Munich
the trucks driven by smart technology and mutually
Stuttgart
communicating. An analysis conducted by TechCrunch, an online
Source: Google Maps, EU Truck Platoon Challenge
publisher of technology industry news, highlights the following
advantages of autonomous trucks3:
•
Labor cost savings: Shipping a full truckload across the US from Los Angeles to New York costs around
USD 4’500, about USD 3’400 of which is labor.
•
Driverless trucks operate 24 hours a day. In contrast, human truck drivers are restricted in many areas from
driving more than 11 hours per day without taking an eight-hour break. Effectively, this technology would
double the output at 25% of the cost.
•
Optimization of speed and fuel efficiencies: The optimal cruising speed for fuel efficiency is about 45 miles
per hour (or ca. 72 km/h). Due to their close convoy formation, this means lower fuel consumption because
of reduced air resistance, and less CO2 emissions. Platooning can optimize the traffic flow by reducing
tailbacks, and the short distance between vehicles means less space taken up on the road, squeezing
vehicles on the road more closely for a better traffic flow4. While human drivers are paid by mile and
incentivized to drive faster, computerized trucks operating around the clock could maximize fuel efficiency.
When two or three trucks are linked together closely behind one another, they can provide efficiency gains
that humans simply can’t match. According to the Financial Times, logistic companies could save EUR 1.6
billion per annum in fuel costs just from platooning5.
•
Driverless trucks will save lives: Traffic accidents involving trucks kill more people in one year than all US
domestic airline crashes over the last 45 years. In 2015, 835 truck drivers were killed in the US on the job,
more than any other occupation in the United States.
Source: European Truck Platooning (2016): European Truck Platooning Challenge, URL:
https://www.eutruckplatooning.com/home/default.aspx, 10.6.2016.
3
Source: TechCrunch (2016): The driverless truck is coming, and it’s going to automate millions of jobs, April 26th 2016, URL:
http://techcrunch.com/2016/04/25/the-driverless-truck-is-coming-and-its-going-to-automate-millions-of-jobs/, 10.6.2016.
4
Source: European Truck Platooning (2016): What is truck platooning?, URL: https://www.eutruckplatooning.com/About/default.aspx,
10.6.2016.
5
Source: Financial Times (2016): EU driverless truck project moves into fast lane after road trip, April 10th 2016, URL:
http://www.ft.com/cms/s/0/66eab950-fdb0-11e5-b5f5-070dca6d0a0d.html#axzz4BC9QoVmr, 10.6.2016.
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Bottleneck is regulation
A big challenge to the adoption of driverless trucks is the current regulatory environment, including standardising
regulations across the European continent to enable self-driving convoys and designing systems enabling
communication between different trucks from different manufacturers. Just to illustrate, in Germany the minimum
legal distance between vehicles is 50 meters, but simply “a safe distance” in the Netherlands. Additionally,
standard rules about dissolving platoons at busy highway junctions are currently unsolved6. Finally, truck platooning
could have far reaching consequences for the use of the road networks as well as areas that handle large amounts
of freight, such as port terminals. Dedicated lanes might be required to avoid hazardous impact between slowermoving driverless trucks and human drivers using the same highway. Therefore, regulatory harmonisation is
needed if we want to have a widescale introduction of truck platooning in Europe. According to the Financial
Times, driverless trucks are expected to be allowed on European roads by the end of the decade7.
In April 2016, an informal summit was held in the Netherlands to discuss changes to regulations needed to make
self-driving transportation a reality. The European transportation ministers, the European Commission and industry
representatives agreed to work together on connected and automated driving, focusing on traffic rules8.
Conclusion
There is no doubt, challenges will come with novel technologies. Self-driving vehicles have a great potential to
improve the lives of billions of people. Reputational risks, customer resistance as well as rising risks of security and
privacy can negatively affect the growth trends. The truck platooning demonstration in Europe shows that driverless
trucking is not very far away. Currently, regulatory issues are the most important barriers, which, in our opinion, will
be resolved over time.
We also need to think about the adverse effects of this structural transformation. The displacement of jobs by
artificial intelligence and robots has often been discussed as something that we’ll have to eventually solve in the
distant future. But the recent successful demonstration of self-driving trucks shows that this development will have
far reaching consequences for our society. It is clear, the EU truck platooning challenge is a big project that can
only be done with the active support of various governments. However, regulators will understandably be reluctant
to allow such a disruptive technology in the near future, given the potential to eliminate so many jobs.
The transition to autonomous vehicles is underway. In our opinion, the next decade may see the most dramatic
revolution in the automobile industry since Henry Ford redefined its manufacturing, and electronics will surely play a
central role in that transformation.
As long-term oriented security & safety investors, investing in the thematic of self-driving vehicles is an attractive
secular growth area within the field of transportation safety. We strongly believe that this topic will not work without
adequate security features. Therefore, we are invested in leading security & safety companies in the field of driver
assistance technology such as collision avoidance systems, radar, LiDAR (Light detection and ranging), ADAS
(Advanced Driver Assistance Systems), among others.
WE WISH YOU AND YOUR FAMILY A NICE SUMMER HOLIDAY SEASON!
THE NEX T EDITION WILL BE PUBLISHED IN SEPTEMBER 2016.
For further information (such as current fund factsheet, performance or quarterly comments) please click here.
Source: Bloomberg (2016): Convoys of Automated Trucks Set to Point Way to Driverless Cars, April 22nd 2016, URL:
http://www.bloomberg.com/news/articles/2016-04-22/convoys-of-automated-trucks-set-to-point-way-to-driverless-cars, 10.6.2016.
7
Source: Financial Times (2016): EU driverless truck project moves into fast lane after road trip, April 10th 2016, URL:
http://www.ft.com/cms/s/0/66eab950-fdb0-11e5-b5f5-070dca6d0a0d.html#axzz4BC9QoVmr, 10.6.2016.
8
The Netherlands EU Presidency (2016): Declaration of Amsterdam, April 14th 2016, URL:
https://english.eu2016.nl/documents/publications/2016/04/14/declaration-of-amsterdam, 10.6.2016.
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