Unique Research - Look Mom, No Hands!
Updated: Nov 17
NS Capital has created a research network that gives us access to one-on-one expertise on a global scale. Better Information = Better Decisions!
As a civilization, we have been innovating for thousands of years. For us, innovation is taking an existing product and improving on it. Typically, focusing on efficiency and safety. So, what is next for the automobile? Much has been written on ridesharing and the move to electric but what about autonomous (self) driving? Thankfully, we have Andrew Culhane, Chief Strategy Officer of Torc Robotics, to gain valuable insights on the state of this disruptive technology. We were fortunate to meet Andrew five years ago and have followed Torc’s progress ever since. It is an incredible story! Below are some highlights from my conversation with Andrew on November 10th.
Before proceeding to the interview here is background on Torc Robotics. In 2005, a group of Virginia Tech student engineers designed and built three autonomous vehicles to compete in the AUVSI Intelligent Ground Vehicle Competition. After three rigorous days, competing against 27 other teams, the students swept the competition placing first, second, and third. To commercialize the technology and keep the team together, Torc was subsequently founded later in 2005. The firm, headquartered in Blacksburg, Virginia, now has 15 years of experience in pioneering safety-critical, self-driving applications. Today, Torc’s R&D, engineering and consulting services is helping leaders in a wide range of industries put advanced robotics and on- and off-road self-driving automobile technologies to work, and remains committed to its mission of commercializing self-driving technology to make the world a safer place. In 2019, Daimler Trucks, a division of Daimler Group, acquired a majority interest in Torc to create a technology powerhouse for the automated trucking industry.
What is the goal of self-driving?
Safety! Saving Lives! According to federal safety data, human error causes more than 90 percent of automotive crashes in the U.S. The three major human factors most frequently reported in the research is improper lookout, excessive speed, and inattention. If self-driving solutions can reduce these circumstances, we believe that would be a huge gain for society.
How do you get citizens to accept self-driving?
This is the most critical question. Without broad commercialization there is no industry. We believe that the continued addition of safety features in today’s automobiles is an important step. Many of those features…like automatic braking and no lane change without signaling…are driven from autonomous driving technology and research. The more the consumer becomes comfortable; the more accepting they are likely to be to true self-driving. Additionally, if the industry can show consumer cost savings that would be significant. Tesla has been able to negotiate lower insurance rates because of extra safety features. This is very meaningful.
Will this be a technology driven industry?
Yes, highly likely. The chassis will become a commodity. The real value is found in the data, software, simulations, and sensors. These come from technology companies not traditional automotive companies. You are already seeing this play out as Google, Amazon, Apple, and Tencent have made significant investments in the industry. And, Nvidia, considered a critical component provider of chips and sensors has partnerships with every company in this space. Plus, a new technology called LIDAR, which stands for Light Detection and Ranging, is an emerging method for measuring distances by illuminating the target with laser light and measuring the reflection with a sensor. All this activity is technology driven and is critical to autonomous driving.
What is the view of autonomous driving in Europe and China?
There is a major divergence between the two. Europe has legislation that blocks self-driving. They state that a person must be responsible for the operation of a vehicle. So, hard to see a regulatory path to self-driving. Public transportation is a focus area though. Is it possible to utilize smaller self-driving shuttles around industrial complexes where the investment costs would be much less than rail? Discussions are on-going. China is a different story. They are building underground infrastructure networks to support self-driving. They are looking to reduce congestion in city centers and view this as potentially part of the solution. Large Chinese technology companies as well as Silicon Valley giants are already major players here.
Are the necessary capital requirements to move the industry forward resulting in mergers and combinations?
I believe we are at the starting point of consolidations. Startups are collapsing down. Partnerships are forming to spread the risk and hedge bets. Daimler Trucks just announced a partnership with Waymo. Both realize the benefits of combining efforts at this stage of development.
Why the focus on the freight trucking industry?
It’s a business decision. Freight demand has been increasing. The pandemic has reinforced demand. COVID-19 created an environment where the freight industry is having a record year. They cannot hire enough drivers. Autonomous driving could relieve regulatory limits on human driving. And it will improve safety. The goal is to develop trucks that operate in a hub-to-hub network. The vehicles would leave depots or distribution centers that have easy highway access, free of urban driving complexities. Drive autonomously for hundreds of miles, perhaps making a few lane changes, then travel to another highway-close hub. There will not attempt to provide vehicles that can drive throughout the U.S. but instead look for “sweet spots” where the conditions make sense. This has much less complexity. Urban driving has so many situations that make it much harder to do without a driver. The goal will be to focus on solving one thing at a time.
This industry has seen amazing advances over the past 15 years, but it is still incredibly early. If I were to put this in a baseball analogy, we are just stepping into the batter’s box to start the game. The prize is to see the emergence of definable, profitable, and scalable businesses for autonomous driving that will create the future.