The first in an open-ended series of features on the tech industry's involvement in the commercial vehicle space, this article takes a glance at how the technology, business model, and culture of 'Silicon Valley-type' start-ups have already changed the way the CV industry works.

In a posting dated 21 June 2022, Renault Group opened with the following statement:

Digitalization at Renault Group is nothing new, but it has been taking on greater importance as the company evolves into a Tech Company. A critical direction to take in order to cope with the growing technological complexity of vehicles, the increasing number of technical and regulatory requirements, and the constant improvement of current and upcoming vehicles that now operate in a connected world. In recent years, the tools used by Design and Engineering have been so advanced that virtual reality now out paces physical reality. [sic]

This is a rather startling thing for a traditional manufacturer of passenger cars and vans to say. What does Renault mean when it says it is evolving into a “Tech Company”? How can it say that “physical reality” is being outpaced by “virtual reality” when its end products are still undeniably corporeal creations made out of steel and plastic? Whatever it means, Renault assures us that it is travelling in the right direction, given everything that’s going on “out there” – to be accompanied by suitably vague gestures. 

What if we were to take Renault at its word and treat its propositions seriously, rather than dismissing them as so much PR hyperbole? The first proposition, that Renault is evolving into a “Tech Company,” initially seems to be absurd. As a manufacturer of automotives, Renault has always been a “tech” company: that is to say, a company which has made its money from iterations and improvements on a late-nineteenth century technological innovation. But when people talk of “tech companies,” they usually mean those firms dedicated to designing digital hardware and software which first appeared (in great number) in the mid-twentieth century in California. In other words, Renault wants to emulate the Silicon Valley tech business by moving away from “analogue” technologies towards “digitalisation” (or sometimes “digitisation”). We are informed that “Design and Engineering” at Renault have already taken the plunge, adopting digital tools that are “so advanced that virtual reality now out paces physical reality.” Hyperbole notwithstanding, what this statement implies is that, in the design and manufacture of automotives, mechanical engineering has already been eclipsed by software engineering. 

What this all means in practice is not clear from this statement alone. However, even if nothing about the ordinary business of designing and making a Renault vehicle has in fact changed, we would hardly expect the company to release such a statement if it did not reflect its business strategy. And even if it does not have any actual plans to evolve into a tech firm, somebody at Renault thought it would be good for the company’s image to say so. 

Yet it is clear to any observer of the industry that recent technological trends somewhat justify Renault’s statement. Increasingly, we see vehicles that are effectively computers on wheels: vehicles that can make calculations and adjust their speed or direction without driver input, and vehicles that can communicate with each other and with central networks to exchange data. Furthermore, engineers and designers use simulations and ever more digital tools in the development of new products. Before the end of the decade, we could see the commercialisation of vehicles capable of driving themselves.

ZF autonomous shuttle for mixed-traffic use

Automotives are still primarily made up of mechanical components, something which is unlikely to change any time soon. But the components are getting simpler. While the push towards making more electric vehicles is recent, the motors which drive the vehicles are an old invention, and they are far less complex than diesel engines (to say nothing of transmissions). The transition to zero-emission vehicles is less of a technological shift than it is a change in policy. The technology is largely there already. The work which has been set for manufacturers mostly consists of operational changes: changes to supply chain, to manufacturing outputs, and to their service offerings. Vehicles of the future are likely to be more dramatically shaped by innovations in digital technologies than innovations in electric powertrains. In the coming decades, manufacturers will be scouring the universities for new recruits in computer science as well as (or even instead of) engineering. 

That, at least, is the apparent direction of travel; there is good reason, therefore, to take a closer look at digital technologies and at the companies which are developing them. Below is a brief outline of three technological trends in the commercial vehicle industry: autonomy in vehicle operation; connected vehicles and fleet management; and digital tools employed in vehicle design and manufacture. 

Developments in advanced driver assistance and vehicle autonomy 

In 2019, OEMs such as Daimler Truck, Iveco, Volvo, Scania, and NFI announced they were involved in autonomous vehicle projects with partners including EasyMile, Robotic Research, and Torc Robotics. In the following two years, these companies conducted trials on public routes, which were perhaps made easier by the fact that COVID-19 pandemic restrictions had reduced the number of cars on the road. During this period, several new names emerged in the commercial vehicle sector: Ambarella, Aurora, Kodiak Robotics and Enway among them. 

Relations between tech start-ups and their OEM partners have occasionally been fraught. In 2020, Navistar announced a long-term partnership with TuSimple; the ambition was to develop autonomous trucks together which would enter series production from 2024. However, Navistar decided to terminate the deal last December after TuSimple became embroiled in a series of controversies which began with allegations of illicit technology transfers with a Chinese-backed company. In its official announcement, Navistar made no mention of the scandal and would not rule out working with TuSimple again in the future. Vice President Srinivas Gowda evasively said: 

Navistar believes autonomous driving technologies will be a key component of a future transportation and logistics system and is committed to the development of a safe and efficient autonomous driving solution.

But that “solution” will probably not involve TuSimple, nor is it likely to arrive by 2024. 

The operative word in Gowda’s statement is “believes.” For the time being, the idea that autonomous vehicles can make transportation safer and more efficient remains a belief and not a demonstrable fact. On paper, autonomous transport would eliminate – on the driver’s side – any risk of human error. But human foibles will inevitably enter the design of autonomous technologies, and a single flaw could see “human error” multiplied across many driverless vehicles all at once. There is no easy escape from the infinite spiral of human mistake. Moreover, autonomous transportation would not necessarily reduce congestion and make travelling around any more efficient. In A Brief History of Motion, Tom Standage cites a 2017 study by the University of California at Berkeley which aimed to find out how access to a self-driving vehicle might change a user’s behaviour. A group of volunteers in the San Francisco Bay Area were given a chauffeur for a week to drive their cars for them, making trips with or without the participants as passengers. The idea was to simulate the effect of owning an autonomous vehicle. The researchers tracked the cars via GPS and found that the participants took 58% more trips than they did before, while the distance covered by the cars increased by an average of 83%. Access to “autonomous” vehicles encouraged the participants to send them out on more errands and to make longer journeys than they would otherwise have done. Switching to autonomous transportation could lead to more vehicles on the road and therefore more congestion, not less.¹

Autonomous mining truck by Scania trialled at Rio Tinto mine in Western Australia

The possibility of a driverless future is nonetheless seductive for all that, and the technical and ethical problems which autonomous technology throws up are attractive challenges to the budding researcher. In any case, commercial vehicle operators can put autonomous vehicles to uses where safety is easier to guarantee, and efficiency gains are obvious. For instance, autonomous trucks and terminal tractors in depots and port terminals can work all hours and operate within a restricted area which the vehicle software can quickly learn to navigate safely and effectively. In the past year, Terberg began trials at a container port in Malaysia, while Sensible 4 and UD Trucks started tests of an autonomous truck in a Japanese industrial site. For similar reasons, university campuses have frequently served as proving grounds for autonomous buses and passenger shuttles. These vehicles do not have to reckon with many other cars on the road and operate within a relatively small (“geofenced”) area. 

When people talk about autonomy, they normally imagine vehicles without any driver at all. In fact, many of the trials involving autonomous vehicles have been supervised by a driver who is ready to take control to avoid an accident. Furthermore, innovations in advanced driver assistance technology are blurring the boundary between the manual and the autonomous vehicle. Predictive cruise control, which uses GPS to adjust vehicle speed and shift gears in anticipation of upcoming changes in terrain, is becoming a standard option in trucks by Volvo and its subsidiary, Mack Trucks. Even if the entirely driverless vehicle turns out to be a chimera, advances in ADAS technology will gradually take more and more vehicle operations out of the hands of drivers. 

Farizon Auto unveils cab-less heavy-duty truck tractor

Cab-less tractor units which do not allow any conventional means of manual override by a driver – such as the concept presented by Farizon Auto in China last November – may not become a familiar sight on our roads for a long time yet. Nevertheless, the concept demonstrates how far autonomous driving technologies have already taken us in the realm of ideas, if not in the real world. They enable us to imagine modes of transportation that look and work very differently from anything we experience daily on the road.

Connected vehicles and data platforms 

It is very strange to see vehicles which are able to drive on their own; we feel it is less strange for vehicles to talk to each other and to data networks, yet this is still a relatively new phenomenon. It is only in recent years that the major OEMs set up their own digital platforms for vehicles to connect and share data with central “cloud” servers – see, for example, Traton’s ‘Rio’ platform and Renault Trucks’ ‘Optifleet’. One might think there would be little more to say on the matter, but tech start-ups are continuing to innovate in connected digital services for commercial vehicles. Canadian firm Geotab adds ever more applications and services to its online marketplace, from in-house engineers and from third-party developers who are coming up with ingenious new ways to present vehicle data and more tools to manage fleets. As with autonomous vehicles, always the promise is greater efficiency and therefore lower costs for operators. This may be so; what can be said for sure is that connected vehicles and digital management tools give operators greater scope to micromanage their fleets, and it is easy to see how more and more such tools could instead complicate and get in the way of fleet operations rather than facilitating them. 

Perhaps the most startling changes are taking place in the trailer segment. Technically speaking, the trailer industry is far more conservative than truck and bus, having seen less changes over the years than the other two. Trailers of the future, however, will no longer be dumb boxes on wheels. They will be connected digitally as well as physically to the tractor unit, and operators will be collecting data from the trailer and using sophisticated tools to manage their trailer fleets. Already, firms such as Schmitz Cargobull and Thermo King have launched digital services that make their once dumb trailers into “smart” trailers. In the past year, Wabash followed suit with a partnership deal struck with tech firm Clarience Technologies. The regional manufacturers of trailers who have so far clung on to independence, even while small manufacturers of trucks and buses disappeared one by one, will face fiercer competition from those few who can afford the large outlay in capital needed to develop and market “smart” trailers. 

When talking about connectivity, we are not only dealing with technologies which are embedded in the vehicles themselves. Manufacturers are making increasing use of digital communications to provide remote maintenance and repair services to their customers. In an interview last year, Voith told T&BB about changes to customer service that were forced by restrictions to travel and social mixing during the COVID-19 pandemic. Routine and emergency repair and maintenance services were conducted remotely, wherever possible, and Voith is continuing to provide remote services even though restrictions have been lifted. Digital tools such as remote diagnostics, which depend on the connection between the vehicle and a central server, can complement in-person services: technicians can arrive at the customer’s site already knowing what is wrong with the vehicle and what parts are needed to fix it. 

Cybersecurity is an increasing concern for manufacturers and their customers. The commonest risk presented by hackers is a breach of personal data, but theoretically they could also threaten the operation of crucial safety systems; for instance, a thermal management system for a lithium-ion battery pack. Although manufacturers risk overexposing their products and their customers to cyberattacks, they are unlikely to be dissuaded from continued investments into connectivity. On multiple occasions, I have heard people in the industry say that digital applications and services will become a lucrative revenue stream for OEMs – more than making up for the losses in aftermarket revenue they are likely to incur from electric vehicles with fewer moving parts and a smaller likelihood of breaking down. 

SCALAR EVO Touch by ZF

Digitisation of business operations 

So far, we have looked at changes to products and services offered by the manufacturer. In this section, we take a look behind the scenes at innovations taking place within the business. 

The end of 2021 saw several moves towards the digitisation of work carried out by the manufacturers at their factories and their offices. ZF announced it is developing a data and integration platform using Microsoft ‘Azure’ cloud software in order to digitise all aspects of its business, including supply chain management and production line monitoring. Moving to the factory floor, Maxion Wheels announced it is developing a digital simulation that will parallel its real-life production line at a facility in Brazil. This so-called “digital twin” will mimic the actual production line, allowing Maxion engineers to diagnose problems and simulate improvements without interfering with the production line itself. 

With regards to vehicle design, in 2022 Daimler Truck started using simulation software developed by Siemens to accurately model air flow around a vehicle concept, with the aim of making further improvements to vehicle aerodynamics and thermal management. Such simulation tools can be just as useful for the customer as for the designer. Romeo Power – which is now part of Nikola – announced it had started providing them to its OEM customers, who are thus enabled to accurately simulate and predict the performance of Romeo batteries in specific applications without having to conduct real-world tests. Allison Transmission began using its own simulation to come up with recommendations for specific axle ratios and shift calibrations based on the customer’s desired application. 

When, in March 2022, Navistar opened a new manufacturing plant in San Antonio, Texas for the production of Class 6-8 vehicles and electric and diesel powertrains, it stated that work processes at the site would be carried out in accordance with “Industry 4.0” principles. This term pops up with some regularity in the promotional material published by manufacturers and refers to the extensive use of automation and artificial intelligence in production. According to Navistar, the San Antonio site – its new “benchmark” facility – houses a fully digitised and data-driven production line. 

Developments in the area of digitisation as they relate to business operations tend to be spotty and less coherent than those in autonomous or connected vehicles. The projected outcomes and the direction of travel are less clearly stated. Obviously, a production line which is more automated has the potential to be more efficient than one which is less automated. “Smart” factories might, however, run the same risk as “smart” vehicles do of overcomplicating processes that worked perfectly fine with less digitisation. But manufacturers will undoubtedly keep on investing in this area because it promises to lead to two results: the replacement of large, complicated machinery with small and precise robotics; and the elimination of human labour. 

Electric terminal tractor fitted with Outrider's autonomous driving technology

The “siliconisation” of the automotive industry 

The potential effects of these three technological trends on the industry are talked about extensively. What is less talked about is the effect they might have on the business culture of the industry. 

Traditional vehicle manufacturers are creations of the early twentieth century. Their capital resides chiefly in their physical assets – their vehicles, parts, manufacturing facilities, warehouses, etc – and they rely on a large pool of human labour to carry out the assembly of their products. The assembly line, pioneered in its contemporary form by Henry Ford, remains unchanged in principle: each worker is highly specialised and carries out a single task repeatedly on multiple vehicles as they move down the production line. The workforce and the management are rigidly hierarchical. 

Tech companies are a very different beast. They start out small and tend to remain so, but the products they make – especially if it is software rather than hardware – tend to be easily scalable even with a relatively modest workforce. Their physical assets also tend towards the small end; tech companies trade more often in intangible assets such as ideas and expertise (i.e., intellectual property), and these usually form the basis of their very high valuations on the stock market. Therefore, tech companies generally value independence and creativity in their workforce more highly than traditional manufacturers do, even if, nowadays, a lot of work done in the tech world is fairly routine. Tech companies therefore tend to be less hierarchical and more casual or fluid in their workforce organisation. 

These, of course, are generalisations – every company is different – but they serve as a challenge to the proposition which this article opened with: that a traditional vehicle manufacturer can (even must) evolve into a tech company. When we consider how different these two types of company are, we must ask, can a vehicle manufacturer run itself like a tech start-up and remain competitive? 

The answer might lie with Tesla, which Martin Eberhard co-founded in 2003 as a “car manufacturer that is also a technology company”.² The company – which originally started out in Palo Alto in the Silicon Valley area of California – succeeded in raising large sums of money through high valuations of its intellectual property and is now renowned for its unusual corporate image and culture as well as its success as a maker of electric cars. In recent years, we have seen multiple start-ups in the commercial vehicle space which are trying to emulate Tesla to varying extents: Volta Trucks, Tevva, Arrival. The most egregious copycat is Nikola, named, like Tesla, after the Serbian pioneer in electrical engineering. Its founder, Trevor Milton, was found guilty in October 2022 of fraudulent statements he made while he was CEO of the company. Nikola quickly distanced itself from its erstwhile founder and recently began production of a battery-electric truck, finally coming true on its promises to turn its concepts into reality. The verdict is still out, however, on whether these “Tesla-likes” can offer a genuine alternative to the business model and culture of the traditional manufacturer. 

Even if it is possible for a vehicle manufacturer to emulate the ideal characteristics of a tech company – flattened hierarchies, emphasis on intellectual property, and smaller, more agile operations – it exposes itself to a whole new supply chain which has come to the attention of those in the automotive industry in recent years. The semiconductor supply chain has gotten our attention for all the wrong reasons, as its volatility has held up production of vehicles across the world. Most new vehicles today cannot be delivered without the computer chips – integrated circuits embedded in silicon wafers – that make all the vehicle electronics and software work. The complicated chain of material extraction, chip production, and integration, spanning multiple continents, which makes the tech industry possible is one that automotive makers today ignore to their peril. 

¹ Tom Standage, A Brief History of Motion: From the Wheel to the Car to What Comes Next (London: Bloomsbury, 2021), pp. 198-199. 

² From a Bloomberg article published on 30 July 2007, aptly entitled “Tesla: A Carmaker with Silicon Valley Spark”.