Volvo solves autonomous revenue riddle with package deals

Volvo is trialling self-driving trucks on enclosed sites. (Supplied)
Updated 10 July 2019

Volvo solves autonomous revenue riddle with package deals

  • Volvo has decided for now to only deploy driverless trucks in pilots for customers

STOCKHOLM: Swedish truckmaker AB Volvo's first commercial autonomous truck deal shows how it is bundling services to generate revenue from a technology that is years away from wide deployment.
Driverless transportation has been hailed as a transformative revenue opportunity, with the Boston Consulting Group expecting connected high-tech vehicles to generate about $150 billion of new profits for the auto sector by 2035.
But regulatory, technological and infrastructure roadblocks stand in the way of deploying fully autonomous vehicles on public roads and the journey is proving long and costly.
Volvo, the world's second biggest truckmaker behind Daimler, has decided for now to only deploy driverless trucks in pilots for customers, aiming to perform specific jobs on a limited, repetitive and controlled route, often on enclosed customer sites.
"There's a lot of uncertainties and that's why we believe the right way to develop autonomous is with commercial pilots where we partner up with customers, go for real implementations and learn from that," Sasko Cuklev, Volvo Trucks' autonomous solutions director, told Reuters in an interview.
The truck maker said last month that its first commercial autonomous transport package will involve seven trucks transporting limestone for Norway's Broennoey Kalk AS from a mine to a nearby port starting this winter.
"We are in the early stages when it comes to implementing autonomous solutions, so we're trying to learn and we're open to different setups. But in general it is more and more talk about services and solutions that is coming into play," Cuklev said.
The deal with Broennoey bundles together the provision of the autonomous trucks with a virtual driver, control tower system, maintenance, repair and insurance, with Volvo paid per tonne transported.
"We see autonomous as more of a complement to today's business and limited to dedicated specific applications where it really makes sense," Cuklev said.
He said Volvo was targeting autonomous vehicles for mining operations and hub-to-hub transport on a highway road or regional hauling over shorter distances such as between ports and warehouses using its cabinless truck Vera.
Volvo's Vera and some other commercial vehicles from rivals are experimenting with using self-driving trucks on public roads, often limiting speeds, picking less busy industrial roads or having people in the cabin in case the technology fails.
Nvidia-backed startup TuSimple said in May that it would deploy its self-driving trucks to haul mail between U.S. Postal Service facilities in Phoenix and Dallas in the southwestern United States.
Sweden's Einride is testing its cabinless trucks to haul freight between a warehouse and a terminal on public roads in Sweden.
TEAMING UP
Carmakers BMW and Daimler this month teamed up to spread the costs of developing automated driving technology as cooperation within the industry becomes more widespread.
Volkswagen and Ford are in the final stage of talks on a strategic alliance to jointly develop self-driving and electric cars, while Renault and Fiat Chrysler Automobiles attempted and failed to merge.
Automakers' investment in autonomous transportation comes as traditional sales are dented by the economic uncertainty caused by the U.S.-China trade war, with analysts worried that truck cycles might have peaked and margins might fall.
Volvo has forecast lower demand in China and Europe this year and its trucks order intake has fallen for two consecutive quarters this year, missing forecasts.
Volvo, which produces trucks under the Mack, Renault and UD Trucks brands, is facing a push to cooperate with others from China's Geely, which became a top shareholder in both Volvo and its main rival Daimler last year.
Cuklev declined to comment on the subject, but highlighted the example of Volvo's recent tie-up with Nvidia to develop artificial intelligence for self-driving trucks as the type of cooperation that Volvo was keen on.
"When it comes to automation we're open to looking into different partnerships in the entire autonomous area," Cuklev said.


EU announces strict 5G rules, but no Huawei ban

Updated 19 min 44 sec ago

EU announces strict 5G rules, but no Huawei ban

  • Any bans on Huawei will now ultimately be up to individual member states
  • Huawei is widely viewed as providing the most advanced alternative for super-fast data transfers

BRUSSELS: EU countries could ban telecoms operators deemed a security risk from critical parts of 5G infrastructure under bloc guidelines issued Wednesday, amid US pressure to shut out Chinese giant Huawei.
The plan, which closely mirrors rules set out by Britain allowing a limited role for Huawei, stops short of barring the company from building the next-generation communications network that provides near-instantaneous data transfers.
It leaves member states with the responsibility to ensure the safe rollout of 5G and warns them to screen operators carefully, saying security of the network will be critically important for the entire EU.
The so-called “toolbox” outlined by the European Commission avoids naming Huawei and does not call for an outright ban on any supplier.
But it urges countries to “assess the risk profile of suppliers” and “apply relevant restrictions for suppliers considered to be high risk” accordingly, including shutting them out of “key assets defined as critical and sensitive.”
It also recommends EU states avoid “major dependency on a single supplier” and “dependency on suppliers considered to be high risk.”
The guidelines are the fruit of months of agonizing within the EU, which has struggled to find a middle way to balance Huawei’s huge dominance in the 5G sector with security concerns pressed by Washington.
Any bans on Huawei will now ultimately be up to individual member states, but the commission’s middle road recommendations give cover to European capitals to resist pleas from Washington.
London’s announcement on Tuesday of a limited role for Huawei infuriated Washington, which says it cannot be trusted with such important infrastructure because it is too close to the Beijing government.
The US has banned Huawei from its own 5G roll-out because of security concerns and threatened to limit intelligence-sharing with London in the event of the firm winning a major role in Britain.
Britain, like the EU, plans to exclude risky operators from “sensitive” locations such as nuclear sites and military bases, but a US official insisted there was “no safe option for untrusted vendors to control any part of a 5G network.”
Huawei is widely viewed as providing the most advanced alternative for super-fast data transfers behind technologies such as self-driving cars and remotely operated factory robots.
Along with European telecom companies Nokia and Ericsson, it is one of the few suppliers capable of building 5G networks.
The commission warned that 5G will offer “more potential entry points” for cyberattacks — a growing threat as more and more critical services such as hospitals and power grids depend on data networks.
“5G will be a ground-breaking technology but it cannot come at the expense of the security of our internal market,” commission vice president Margaritis Schinas said in a statement.
“The toolbox is an important step in what must be a continuous effort in the EU’s collective work to better protect our critical infrastructures.”