The market for Autonomous Delivery Vehicles remains nascent, with business models evolving as vendors seek commercial partners and different routes to scale.
There are few technological barriers to entry with widespread use of open source software, supported by companies like Nvidia, etc.
Below you can find key takeaways from the report compiled by. STIQ and is based on interviews and data analysed.
- Positive sector conclusions include increasing traction in Middle Mile and Last Mile applications, significant investments in the wider autonomous vehicle sector, and potential for large-scale deployments.
- Some vendors have scaled Pavement Robots without proper communication with local officials, while others have scaled although positive commercial KPIs continues to be difficult to achieve.
- This report does not constitute investment advice and is provided free of charge for information purposes only. Please do your own research to confirm any data before using in decks or presentations.
- The report contains a summary, executive summary, market segmentation, business models, drivers, inhibitors, legislation and regulation, vendor profiles, funding, notable M&A, credits, interviewees and sponsor information.
- This report is focused on mobile vehicle solutions in last and middle mile operations + robotic lockers, and covers a variety of operations, methods of delivery and routing, as well as the regulatory framework that situates activity.
Road vs Pavement
- There are important differences in operating autonomous vehicles or robots on pavements versus roads even though the fundamental technology is not very different.
- From private road operation to public road operation, safety level requirements are higher and speed is higher.
- Pavement Robots tend to be the size of a pram and have a low payload capacity. They follow ISO standards and versions of local standards.
- We work with ISO, versions of EU and US standards, and an automated mobile platform standard. We consider the risk of breaking down, fire, injury, explosion, going out of control, and electrical safety.
First Mile / Last Mile / Micro Mile
- First Mile delivery missions typically include high payloads, palletized goods, and large volumes, and are transported by semi-trucks or larger vans with payload capacity > 10tonnes.
- Last mile is the delivery from the last staging post to the customer. It is dominated by parcels, but online groceries orders have proliferated recently.
- Micro Mile deliveries are sub-last mile deliveries, and overlap with Q-Commerce players. They are made by dedicated robots, usually designed for single deliveries.
- STIQ's segmentation of the Autonomous Delivery Vehicle sector included certain characteristics such as ubiquity, and multiple vendors had developed applications for dockside and yard transportation vehicles. It also noticed early signals for autonomous car vendors to move more towards logistics applications.
Autonomous Delivery Vehicles
- STIQs interviews indicated that there are two types of delivery robots: autonomous or semiautonomous, and tele-operated. The latter has active safety features aimed at preventing accidents.
- Companies supervisors monitor the vast number of data points along each journey and if a truck encounters an unusual or unexpected scenario, it will ask a question of the remote supervisor and then take action at the local level for maximum safety and efficiency.
- An autonomous vehicle retains full control of driving the vehicle, a person monitors incoming data feeds from the vehicle, and a suggested activity may be suggested if an unexpected problem occurs.
- Gatik's vehicles can operate without a human inside, but they have remote supervisors that monitor every aspect of the vehicle on every single one of its routes.
- STIQ's research indicated that there are multiple business models in the autonomous driving and wider autonomous vehicle sector, including full stack companies, pureplay software companies, and pureplay hardware companies.
- There were two camps in the AV sector: those selling into car manufacturers and those buying in vehicles and project managing AVs themselves.
The Full Stack Vendor / The System Integrator
- Complete solution vendors were more common among the Last Mile specific vendors, and a few car manufacturers have internal AV divisions.
- STIQ interviews and research highlighted a separate business model of system integrators or project management companies, which managed government relationships and sought to influence legislative frameworks for autonomous vehicles.
- Vendors of electric vehicle chassis may sell to or partner with software hybrid vendors or third parties, or develop ADV chassis and navigation software internally.
- Some vendors developed autonomous delivery solutions but spun them out as separate entities. Reasons for spinning off such developments may have included significant R&D expenditure required to develop a market-ready vehicle.
- Sodexo provides a full turnkey solution for ADV, including resident dining, retail, and all associated online retail or online commerce that you would expect.
- Researcher, being a co-investor in Delipop with their French logistic partner and have deployed Arctan robotic locker with Delipop in France - by the end of 2022 they should have ca. 10 locations in Paris.
- Some vendors have tried to provide a full turnkey solution, including operating web shop interfaces, payments and other front end functionalities. However, Sodexo has found that this approach has been ineffective.
- There are many different agreements for using ADVs, including agreements for cleaning vehicles, swapping batteries and dealing with superficial issues.
- The market hasn't spoken on what business model or vehicle is going to win in autonomous vehicles and robots.
- Tortoise noticed that people wanted to talk to their robots when they were parked in front of grocery stores, and they thought they could buy something from them.
- Some vendors have pivoted into retail robots, and are now selling things instead of last-mile deliveries.
- The efficiency gains of lockers are that delivery drivers do not have to wait for customers/recipients to accept a delivery at the door, and can also deliver many parcels to the same locker in a single visit.
Types Of Last Mile Lockers
- There are two primary types of lockers: static and dynamic. Static lockers have a fixed number of units, while dynamic lockers manage space requirements internally.
- Robotic Lockers are segmented into parcel lockers (ambient) and grocery lockers (temperature controlled). Grocery lockers typically have three temperature zones (ambient, chilled and frozen).
- While grocery deliveries are more complex than parcel deliveries, Arctan is a temperature controlled robotic locker that improves efficiencies by automatically adding the full logistics bin with the grocery order inside to the appropriate temperature zone.
- Robotic lockers can be dynamic and change storage location sizes depending on changing parcel sizes. This is very efficient in terms of the parcel volume, the speed and convenience, because everything goes through one in/out console.
- Even though PIX Moving didn't attend many trade shows, online inquiries were growing.
- Robots are an attractive green alternative to human transportation, using the same amount of energy as a kettle to boil water.
- With the perceived reduction in avoidable traffic miles, people don't have to bother getting their car out of the garage. Parents with young children find it easier to call a robot.
- The robots have been incredibly successful and are very popular with the communities. People who can't get out of the house for months say they don't know what they would do without them.
- The ease of use imperative is a recognisable, and ultimately key driver of the sector.
- Operators believe that the public will accept robot shopping and value the part it can play in an enhanced amenity landscape.
- The wider societal benefits of the robot were apparent before the pandemic, and this positive reception is likely to fuel expansion into other suitable locations.
- Grocers are increasingly making their products available in a variety of channels, including Pavement Robot operators. The robots have been embraced by both the customer and the wider public, and are seen as an addition to the available shopping possibilities.
- When introducing new technology, you want it to blend into society as quickly as possible.
- Some cities have banned the operation of Pavement Robots, but Daxbot's robot is more like a pet dog and interacts with people.
- The Daxbot team is working with disability and advocacy groups to ensure they are comfortable with the technology.
Introducing Robotics Lockers
- Robotic Lockers can replace the last bit in the Last Mile process, storing parcels, groceries and food, and eliminating the need for a courier to wait.
- Replacing a human driver with an ADV involves more than simply driving from A to B. An employee at collection and a customer at delivery have to execute all operations apart from the driving from A to B. This will include additional training at delivery origin.
- Business models for last mile delivery vehicles may change, as they may require additional actions from consumers.
- When a robot asks a person to come to the door, they may wait 40 minutes until the call is finished, so personal delivery is more convenient.
- Neolix believes that in the future, autonomous delivery will be like a pyramid, with the top customers paying $10 per delivery, and the bottom customers paying one or two dollars.
- The collection problem with ads is a problem that will be solved by autonomous delivery vehicles, segmentation, business models, delivery operations, robot lockers, and pavement robots.
- Japan is a very important market for Neolix, because many cities do not have enough delivery guys and older people cannot order groceries.
- The autonomous vehicle sector is increasing in funding and there is significant optimism for growth. Some vendors argue that ADVs may be more suitable for certain missions, such as the Last Mile.
- The cost of delivery is the only driver that can unlock the market for autonomous vehicles. An operator with volume to invest in these vehicles is also needed.
- In countries with high labour costs, like the US, Europe, and UK, last mile robotics makes sense. But in China, it doesn't.
Other Drivers: Lack Of Labour
- Lack of labour is often quoted as an important market driver. Japan is one interesting market.
- The business model of last mile delivery doesn't add up, and autonomous robots are the future.
- Level 5 autonomy for road vehicle missions is years away according to multiple sources; Tesla's current L5 shortfalls are many and may be difficult to overcome; full rollouts may take longer than expected.
- There were two pavement robot companies popping up every week at one point in time, but the use cases so far haven't really scaled.
- Robotics companies are normally focused on the hardware side of things, but HeyTheo was more focused on getting something that works and that can be scaled up quickly.
- There are more generic solutions that can provide for different applications and different machines, such as grass cutting and cleaning.
Overlapping With AGV & AMR Robotics?
- STIQ interviews have suggested that the autonomous vehicle sector and the AGV & AMR Robotics sector are slowly overlapping in scope and applications.
- Safety in components is important because operating robots at scale is challenging and requires permits, insurance, staffing and other requirements.
- "We are not the cool guys, we are the basic electrical engineering guys, but we make the robots move and not break down."
- Functional safety is getting more and more important for robots, but different product safety standards still exist in different parts of the world.
- Many startups want a very specific motor, but for a first model or MVP, they can use a standard motor which can be delivered very fast. They can then specify what they really need, and we can do customised motors, but there is a cost with that.
- Sensors are often costly and the price is hard to talk down. The production cost is something you can control.
- Many people are seeking innovation, like autonomous driving and electric mobility. Couriers have tested several options, including cargo bikes and delivery vans, but further experimentation may be required to identify use cases with positive ROI.
- Some couriers tested sidewalk robots in Germany many years ago, but they can only carry a box with shoes.
- The thing that's keeping autonomous delivery vehicles from being profitable is the labour involved in making the deliveries. Although some vendors have tried to perfect their business models for years, it appears ROI was not clear cut.
- Although there may be limited applications for smaller robots, such as Pavement Robots operating with Last Mile and Micro Mile missions, the CDV Transport Research Centre is exploring the idea of multipurpose use.
Enter The Blended Use Case
- The robot may be used for different uses, such as person transport or cargo transport, depending on the times of day.
- Robots behave the same whether they are cutting the grass or cleaning the floor. However, getting a SLAM system to work on a larger robot is very time-consuming.
- Autonomous transportation of people is going to take time, but the transport of goods could generate some revenue and gain traction earlier. Some vendors have created hybrid manual/automated approaches, which may be easier to adopt in the shorter term.
- Supply chains are disrupted, with some suppliers quoting >60 weeks lead times for core components. This is a huge challenge for many robot makers.
- Maxon has established communication channels with customers to say if you need this earlier, let us know.
- There are islands of growth in the Last Mile segment, but these appear to be primarily inside or closely focused around private environments. There is healthy growth in the wider mobile robots space, but geopolitical instability may impact growth.
- A wealthy landowner built his own railway line to transport coal from his mines to his docks in Cardiff, thus optimising his supply chain.
- Spring Mobility focused on Middle Mile applications, such as tyre replenishment, and said that the first use cases will be the ones where you have a very defined route.
Middle Mile Traction
- GIM Robotics has started operations in factories in Germany and the USA moving between buildings and in airports delivering tools to mechanics working on planes and helicopters.
- GIM Robotics is focusing on outdoor yard logistics, such as closed environments, and sees a demand for Middle Mile applications.
- Industrial zones around cities could be very relevant for shared mobility, but establishing a network of vehicles and convincing companies to adopt it will be a challenge.
- Gatik moves goods between short haul, fixed, repeatable, predictable B2B locations, and last mile deliveries for consumers.
- The Middle Mile ODD has some flexibility built in and vehicles can avoid areas with more people. For example, a duck train can take 3/3 right turns to avoid an unprotected left, because a bag of groceries doesn't complain if the route takes 5 minutes longer.
- The report also contains a summary, executive summary, market segmentation, business models, drivers, inhibitors, legislation and regulation, vendor profiles, growth funding, notable M&A, and market size data.
Considerable Legislative Variation
- The US and Canada lack a consistent federal legislative landscape when it comes to autonomous vehicles, with 50 different states plus DC doing slightly different things.
- Kansas passed a law that allows for fully driverless or fully autonomous vehicles, and the US is now starting to create stricter laws about robots and autonomous vehicles.
- Because the previous governor of Virginia was very pro autonomous robots, it was easier to deploy in Fairfax.
- It's anyone's bet which country will take off first with autonomous driving. The legislation is starting to pop up in Germany and few other countries.
- In the EU, Waymo and other companies are starting to launch commercially, but the fleets are still relatively small.
- The robots travelling autonomously can manoeuvre around obstacles, cross roads autonomously, back up off narrow pavements, etc., but they might take three or four seconds to back up or manoeuvre out of the way.
- STIQ believes cities and states may afford the car industry time to experiment with autonomous vehicles, but other cities may not.
- Rapid rollout in key cities led to complaints from the public. The government is working with city hall and operators.
- Trials and pilots are a part of organic growth for the platform, and a selling opportunity, but in the short term, I don't see it as a big money-maker.
- The city of Salzburg in Austria made a decision several years ago to build its own delivery infrastructure and will not issue permits to anyone.
- The municipality of Toronto was spooked by having robotics on sidewalks and conducted a trial at the beginning of this year. They are still discussing the issues and thinking about what to do.
- In many places, e-scooters are banned because they end up in the road. Perhaps only two companies will operate pavement robots.
- Robot delivery will be similar to e-scooters in today's cities, with some vendors cognizant of the need for improved operating standards.
- E-bikes and mini scooters are causing a big barrier to entry for robotics. Please don't do anything stupid that would ban these things in other cities.
- The last mile, especially home deliveries, brings additional congestion and problems to already crowded areas. The trend towards fewer cars is in opposition to all city trends.
- Spring Mobility has been working with a Chinese vendor for three years on a self-driving vending machine, but it's just too long a lead time.
- Regulatory issues were not confined to autonomous vehicles alone, but were experienced in different countries.
- The biggest problem with autonomous vehicles in Estonia is the legislation. Clevon got permits and is now delivering parcels for logistics companies.
- Some US states allow robots to operate on sidewalks, but there is no central place where operators can go to find out what they need to know about operating in various places.
- The criticality of infrastructure for all these new services is not generally understood, and applying for permits can be an arduous task.
- Regulation is a good thing because it gives people peace of mind, but it has also been a big roadblock.
- For all operators interviewed, the successful development and implementation of regulations and standards, along with the issue of permits, is seen as crucial to sustained success in the space.
- When selling into new jurisdictions, it may be useful to work with local partners that can influence or get permits and so on.
- In Scandinavia, autonomous vehicles are not allowed on the road unless they are 100% safe. It is important to document what you can do and why is it safe.
More Cautious Permit Issuances
- After the explosion of Qcommerce locations, councillors became more cautious about issuing permits to other new business models. However, after 6 months of conversations, the council finally approved operating permits to Delipop, a robotic last mile delivery service.
- Asian cities are very open for innovation, and it's legal to do trial runs in public.
- Starship can operate in multiple countries and more than 50% of US states, but if more companies operate, they must be held to the same safety standards.
- Some delay in approving proper legislation may be related to the speed of technological development, but also to the apparent lack of full autonomy.
- Some vendors have pivoted into other areas where permits and regulations are more established, such as warehouse automation applications.
- ADVs affect multiple stakeholders, and different regulatory demands are being developed and policed by different regulatory bodies according to jurisdictional need.
- The use of crosswalks in cities is problematic because of the legal restrictions placed on them by national, provincial, and municipal bodies. There is also a lack of federal or central government frameworks and regulation for autonomous vehicles in general.
- As head of policy, I engage directly with federal governments, state and provincial governments, and their vast range of regulatory authoritative networks to ensure we're set up for success.
- We work to ensure that the autonomous vehicle legislative and regulatory landscape is favourable and enables our deployments. Corporate campuses provide good testing grounds for future rollouts, and can mitigate the risk associated with autonomous driving.
- Robots could do any kind of delivery, especially in confined areas. Permits may also be easier to achieve in confined or private areas.
- Robots are being trialled in more controlled environments, such as gated communities and university campuses.
- A university campus has trails, walkways and a lower traffic volume than the average city, so students can get around without using the roads.
- The regulatory complexity of public vs private space, segmentation, business models, market drivers, challenges, early growth signals, legislation, regulation, government relations, congestion permits, vendor profiles, funding, notable M&A, company profiles, credits, interviewees & sponsor, contact us.
Last Mile Robots Funding / Sector Funding
- STIQ attribute the increase in funding into Last Mile Robots to the development of ROS, the open source robotics operating system, and improved AI chips, sensor technology, and improved component pricing.
- Fundraising in the autonomous vehicle sector gained traction in 2018 with an additional jump in 2021. The vast majority of venture capital & external investment funds have gone to autonomous vehicle vendors.
- The focus for this report is on autonomous delivery vehicles, but there is also significant investment in the autonomous passenger car sector.
- In 2021, four companies went public, three were reverse mergers or SPAC listings, and one was a traditional IPO.
SUBDUED M&A ACTIVITY
- The sector has remained relatively subdued in terms of activity, but this may be a function of the nascent stage of segments such as autonomous vehicles/robots.
Full Report: HERE (STIQ)
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