Volvo Trucks has introduced an autonomous service (VLVLY)
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Volvo Trucks has signed an agreement to provide six fully autonomous heavy-duty trucks to Bronnoy Kalk AS, a mine operator in Norway, according to Truck News.
The trucks will be used to transport limestone at the mining site, which will cover a roughly three mile stretch between the mine and the stone crusher. Volvo Trucks has stated that successful tests have already been carried out and a fully operational service will available by the end of 2019.
Under the agreement, Bronnoy Kalk AS will not by the owners of the trucks, which provides some insight into what could be Volvo Trucks' ultimate AV strategy. Volvo Trucks will provide a "total transport service" that will see the truck manufacturer being paid per-ton delivered.
For Volvo Trucks, this is an opportunity to attract clients by removing the upfront costs of buying trucks along with associated costs of hiring drivers and maintaining of the vehicles. While truck sales will continue to be Volvo Trucks' main revenue generator, AV transport services could become a significant source of cash — for context, Bronnoy Kalk AS extracts 1.8 million tons of high-grade calcium carbonate per year — especially as the company expands its offerings to other industries and use cases.
For Volvo, this is also an opportunity to test its autonomous trucks in confined, predictable environments as it develops its technology. Autonomous driving systems rely heavily on the data they get from test miles — their machine learning technologies use this data to improve outcomes. That means it's imperative for AV technology to be tested out on different roads, in a variety of conditions, and faced with different scenarios. Otherwise it won't fully develop.
For context, Waymo, which is the arguable leader in the AV space, has completed over 10 million miles in tests. Volvo Trucks could use its autonomous transport services to gain valuable data to improve its technology at a relatively low risk — avoiding public roads means avoiding heavy regulation and the potential for pedestrian injury — all while making money.
This could ultimately help the firm become a leader of the market while it's still in its infancy — the global self-driving truck market is expected to be valued at $1 billion by 2020, according to ResearchAndMarkets.