Is Self-Driving Truck Stock TuSimple a Buy?
The low-hanging fruit of autonomous driving would have to be semi trucks. They’re predominantly driven on highways which present fewer challenging conditions than city driving. They ply the same routes, over and over. (Nearly 80% of truck freight goods hauled in the U.S. are moved via 10% of the nation’s trade corridors.) And the shortage of drivers, as well as increased usage of trucking as retail moves online, demand a technology solution.
Trucking represents approximately 80% of the U.S. freight market. Labor costs now represent 43% of total per mile semi-truck operating costs, a ten percentage point increase since 2012. It’s also becoming an increasingly dangerous occupation with injuries from crashes involving large trucks doubling from 2009 to 2019. The autonomous trucking investment thesis is plain to see. What’s not so obvious is which company(ies) will succeed in bringing an autonomous truck to market.
How We Imagine Autonomous Driving
In bee school, they teach MBAs how to think critically using case studies. A problem is presented with little accompanying information, and the bright minds of tomorrow imagine what the future looks like. If we were to guess how autonomous driving unfolds, it would be in stages that accommodate social pressures.
It starts with ADAS acting as a glorified cruise control mechanism. It then moves all the way to Level 3 autonomy which means there will always be a human driver ready to take over. To make everyone feel safe, the human will be physically in the truck cab for a while. The advantage for companies will be that the trucks can operate pretty much 24-7, with the driver studying for a new occupation. Then, the physically present driver turns into a remotely
