Volvo sees a $42 billion market in U.S. Sun Belt for autonomous trucking

GOTHENBURG, Sweden — Unlocking a southern tier of freight routes from Southern California to Florida would create an annual $42 billion market for autonomous trucking.

That's the estimate of Volvo Autonomous Solutions, the self-driving truck division of commercial vehicle maker Volvo Group that has already launched in some European mines and quarries and is now eyeing the U.S. cargo market.

"We can all agree it is a massive and big opportunity to commercialize," Nils Jaeger, president of Volvo Autonomous Solutions, said at a recent briefing at the division's headquarters here.

Volvo Autonomous Solutions is looking to jump into the market by offering a freight service. Customers would pay the truck unit to move goods via autonomous vehicles between highway-adjacent cargo transfer centers.

Such a service could speed up goods shipment by 40 percent, Jaeger said. One advantage: Trucks wouldn't be subject to the 11-hour federal limit for human drivers.

Jaeger outlined the creation of a spiderweb of routes across the southwest, eventually extending east in regions where good roads and sunny weather lend themselves to autonomous truck operations.

Volvo is using technology from Pittsburgh self-driving technology developer Aurora Innovation as it works to create autonomous trucking lanes in Texas. Aurora provides the autonomous driving system for Volvo's VNL tractor. Volvo has started manual operations simulating autonomous cargo transport in Texas as it works toward a commercial launch — with a safety driver onboard at the start — next year.

Hauling freight among Houston, Dallas and El Paso, Texas, represents a $5 billion annual market, according to Volvo. That nearly doubles once the routes extend to Tucson, Ariz.; Austin, Texas; and San Antonio.

It balloons to $23 billion as self-driving truck lanes extend through Phoenix to Los Angeles. The autonomous freight market soars to $42 billion as the southern tier grows east into Florida and north to Oklahoma.

Autonomous trucking activity on these routes is currently part of various test programs, and the freight market is part of a three-pronged approach to autonomous truck development underway at Volvo Group, which is a separate company from Volvo Car Group.

In the U.S., Volvo plans to pursue what the freight industry calls hub-to-hub operations. In this scenario, a human truck driver would ferry the freight through an urban area from its origin to a highway-adjacent transfer hub. The load would then transfer to an autonomous tractor to haul the freight on the highway to a distant transfer hub. At that point, a human driver would take the cargo to its destination.

The system requires new trucking infrastructure including the hubs and associated fueling and maintenance locations, Jaeger said.

"But there's also new tasks which we don't have today," he said. "If you work with an autonomous truck, you need to do a pre-trip inspection and a post-trip inspection. Actually, a lot of new jobs will be created."

It's a model other autonomous truck technology companies are developing. Volvo's U.S. partner Aurora also is testing autonomous freight runs separately using Peterbilt trucks with safety drivers. Next year, it plans to pull the safety drivers to drive freight fully autonomously along the Dallas to Houston route.

In its second business strategy segment, Volvo Autonomous Solutions provides autonomous trucking at the Bronnoy Kalk mine in Norway. Seven autonomous Volvo FH trucks traverse a three-mile stretch through narrow tunnels between the limestone mine and the crusher. They operate fully autonomously without human safety monitors in the cabin.

Volvo also partnered with cement supplier Holcim Switzerland to test and develop its Tara autonomous haulage system at a limestone quarry in Siggenthal, Switzerland.

Finally, Jaeger said Volvo Autonomous Solutions is looking at supplying autonomous trucking in enclosed areas such as ports and distribution centers but does not have a test program operating in that segment now.

Volvo has developed the autonomous driving technology for its mining, quarries and ports business but will rely on Aurora's robotic system for its over-the-road work, Jaeger said.

The Swedish company's approach is an example of how autonomous driving has splintered into niches with distinct robotaxi, on-road trucking and off-road applications.
One set of developers including Cruise, Motional, Waymo and Zoox focus on robotaxis. Waymo was looking at autonomous trucking but pulled back to focus on its burgeoning taxi business.

Aurora, Kodiak Robotics, Stack AV, Torc Robotics, Volvo Group and Wabbi Innovation Inc. are developing autonomous truck technology.

Volvo and others, such as self-driving electric tractor company Monarch Tractor and Pronto AI, are pursuing autonomous off-road and structured markets. Autonomous technologies are refining their focus as development expenses balloon, said Jeremy Carlson, associate director for the autonomy practice at S&P Global Mobility.

Aurora, for example, is still looking at robotaxis. It has a small fleet of autonomous Toyota Sienna minivans with safety drivers operating in Dallas-Fort Worth in Texas. And while the company is developing one self-driving system it believes can be used for both applications, it has shifted its primary efforts to commercializing an autonomous driver for trucks.

Waymo, meanwhile, sees a faster path to revenue with robotaxis. "Given the tremendous momentum and substantial commercial opportunity we're seeing on the ride-hailing front, we've made the decision to focus our efforts and investment on ride-hailing," Waymo said in a July announcement.

The company said it will continue to work with Daimler Truck North America on the technical development of an autonomous Freightliner truck platform, following up on the investments it already made.

Carlson said such a strategy makes sense.

"While there is a lot of similarity in the technology, the use cases ultimately begin to diverge," he said.

Trucks operate in a significantly different environment than robotaxis. They drive along divided highways with little cross-traffic, encountering only rare pedestrians or cyclists and only an occasional signal. And they require a different level of validation. For example, the autonomous system that actuates braking must be able to stop an 80,000-pound big rig rather than a passenger car. Sensors are mounted in different places and must be able to see behind a trailer.

Robotaxis, however, must navigate far more complex traffic environments with frequent random actions by human drivers and other road users.

Down the road, the technology commercialization efforts will likely converge again, and many of these companies could be operating in both markets.

But for now, "a single platform and single-use case will help ensure progress," Carlson said. "You need to focus on something so that you can bring it to market."