Despite the onset of venture capital winter, Chinese investors are investing heavily in industrial autonomous driving businesses.
Given that the volume of venture capital investment in startups participating in autonomous driving of commercial vehicles has slowed this year, one may expect VCs to slow down funding rounds for all kinds of autonomous driving-related companies. However, this has not been the case.
Startups specializing in autonomous driving technology for use in the industrial sector have garnered a large number of mergers and financing, while China's major autonomous driving companies, such as Pony.ai and TuSimple, have been restructuring their organizational structures with rounds of layoffs.
This occurrence correlates with the rising usage of automated vehicles as load and assembly line carriers, as well as forklifts in warehouses, ports, and manufacturing facilities.
According to Qichacha statistics, total equity capital for both commercial and industrial autonomous driving will reach 35 billion yuan in 2022, an increase of more than 70 percent from the same time in 2021.
In the third quarter of 2022, 55 firms focusing on industrial autonomous vehicles received new financing in 61 investment rounds.
Companies specializing in industrial settings, such as unmanned ports, smart parks, and mines, tend to receive the most financing.
Senior Auto (斯年智驾), a Beijing-based autonomous driving firm that provides solutions and operating services in the pan-ports region, has one of the most notable deals. The creators behind what it touts as the world's first L4 industrial autonomous vehicle technology powered by machine learning have raised more than $100 million in a series A+ funding round headed by ByteDance, the owner of TikTok.
Several China-based industrial autonomous driving startups have also secured sizable rounds, including Holomatic (禾多科技), which secured USD100 million in a series C round from the venture capital arm of Guangzhou Automobile Group, and J-Elephant (捷象灵越), a developer of autonomous forklifts that sealed hundreds of millions of yuan in a Pre-A round from Sequoia Capital, Sinovation Ventures, among others.
This year, Yunchuang Zhixing, an autonomous driving startup concentrating on the city sanitation segment and specializing in the development of solutions for unmanned sanitation operations, received funding from Baidu Venture, the venture capital arm of artificial intelligence giant Baidu, and Nio Capital, the investment arm of Chinese electric automaker Nio.
While industrial autonomous vehicles have only recently caught the public's attention, they are by no means new to the industrial community.
With the combination of sensors, cameras, machine learning, and artificial intelligence, autonomous vehicles capable of navigating around obstacles and reaching their destinations have been evolving for several years in the industrial sector.
Numerous applications for autonomous technology exist within the industrial logistics sector. Manufacturers, ports, logistics, and mining companies have been interested in learning how to incorporate autonomous technology into their work for quite some time due to the technology's ability to mitigate and avoid hazards associated with the jobs.
According to He Bei, the chief executive officer of Senior Auto, the application of industrial autonomous vehicles has shown great potential.
He Bei stated, "The business environment is rapidly changing that customers (mining, freight and port companies) are increasingly aware of capabilities of the technology, and eager to understand how to optimize their current processes with the technology."
Autonomous vehicles not only reduce the cost of human resources for port corporations but also improve operational efficiency.
Port workers are required to park their own cars outside the port's control zone, and they must ride a shuttle bus or walk to their offices within the control zone. However, the conventional method is expensive and thus leads to high costs.
Unlike human drivers, autonomous shuttle buses and trucks may operate at any time and in any weather conditions. Moreover, autonomous vehicles in a port can receive commands from a central operation base - an interesting value addition for freight and port firms since the deployment of autonomous vehicles enables them to continue moving items to their final destinations while the drivers take a rest. This enables businesses to do more tasks in the same amount of time, presenting a chance to increase operational revenues.
Despite safety worries regarding the technology and its capacity to safeguard employees, KPMG has estimated that the introduction of self-driving car technology may cut the incidence of industrial accidents by 90 percent.
Supermarkets, grocery shops, and retailers are examining prospects for autonomous cars in public transportation, just as ports and manufacturers have shown strong interest in the technology.
For instance, supermarkets are exploring robots as in-store shopping assistants to aid consumers in locating products and delivering things around the clock.
Dada, the logistics division of JD, has established an autonomous delivery service with a fleet of unmanned delivery vehicles to deliver on-demand orders to over ten areas in Beijing and Shanghai. JD's omnichannel supermarket brand Seven Fresh and Tencent-backed Yonghui Supermarket have used the service thus far.
Other technology companies, such as the on-demand service platform Meituan, have expedited the development of unmanned delivery services in an effort to minimize staff costs and boost productivity.
Meituan and Li Auto-backed autonomous driving startup Neolix were granted permission to test their unmanned delivery cars on designated public roads in Beijing's Yizhuang new town, also known as the Beijing Economic-Technological Development Area.
Photo by Jake Nebov on Unsplash (modified)