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Autonomous trucks will help future-proof the freight industry, with the support of startups like Kodiak Robotics. (Kodiak)

Startups emerge as accelerators for commercial-vehicle technologies

Newcomers are helping OEMs and Tier 1s speed up development processes, panelists explained at the 2020 SAE COMVEC Digital Summit.

Speed has become a more critical factor as the commercial vehicle (CV) industry races to meet global market demands and stricter emissions regulations. The need for quicker decision-making and action is enabling startup companies to play a growing role, helping established manufacturers improve operations, even during this era of pandemic-driven isolation.

Several speakers at the 2020 SAE COMVEC Digital Summit agreed that startups are gaining a foothold throughout the industry, supplying technologies and products that range from systems and software through full vehicles. For most startups, the ability to devise ways to augment development efforts by established companies is a critical step. Technologies like software and artificial intelligence are being used in new areas like electrified powertrains and autonomous operation, opening a space for young companies in an industry that has shown a longstanding desire to work mainly with well-established companies.

In multiple sessions that addressed the role of startups, newcomers and representatives from major CV suppliers noted that young companies need to focus on their product while also learning how to integrate their hardware and/or software with technologies of Tier 1s and OEMs. Additionally, many panelists at the virtual summit stressed increased speed as a primary benefit of dealing with startups.

“I’m not always focused specifically on technology; a lot of my focus is on how they can help us go faster,” said Stephan Tarnutzer, president of AVL. “The whole world is focused on how to get products to market faster. If I’m not able to work faster when my customers want to go faster, I may not have a customer.”

Getting off the ground
Swiftness was front and center in presentations by the University of Waterloo and the University of Wisconsin. They are among many universities that have established accelerators that aim to help entrepreneurs speed up their efforts. Accelerators provide a range of services such as access to mentors, office space and development tools, to name a few. That saves time for the small staffs of startups. It also lets them focus on their projects rather than tasks like hiring secretaries or ordering supplies.

Entrepreneurs can also get support from government agencies. Chicago-based startup ClearFlame Engine Technologies is working on engine technology that lets existing diesel engines burn low-carbon and carbon-negative fuels. The company has received grants from the Department of Energy, the National Science Foundation and Argonne National Laboratory.

Julie Blumreiter, CTO at ClearFlame, said grants were critical to help the company continue developing its technology while founders worked with venture capitalists. “The grants helped us bridge the valley of death faced by many startups,” she said. “It gave us the ability to move to the next phase.”

Taking the next step typically means working with Tier 1s or OEMs. When partnerships are formed, young and established companies need to focus on their strengths. New companies can learn how to integrate their products into production gear, but established companies should refrain from strapping startups with too many requirements.

“Most startups have a good ‘elevator pitch,’ but the real place where the rubber meets the road is determining how their product combines with ours,” said Greg Mann, director of corporate development and strategic alliances at Allison Transmission. “That said, we don’t want to bog startups down with some of the processes we have. We benefit from their nimbleness.”

Emerging companies must concentrate on their core competencies, following the technologies and techniques that help them bring disruptive products to the marketplace. Mark Kuhn, VP at Ricardo Strategic Consulting, noted that startups need to bring major improvements, since established organizations can make incremental advances themselves. To do that, newcomers need to focus on both technology and their target customers.

“We stayed myopically focused on developing battery-operated buses,” said Dale Hill, a founder of bus-maker Proterra Inc. “Once we were ready with buses, we focused on smaller transit agencies. We stayed away from big agencies like New York City. They’d kill a little startup company.”

Panelists all agreed that partnerships between startups and established companies benefit when the connections are made early in the startup’s development. Once these links are forged, constant communication is critical. “Having Tier 1s and/or OEMs involved is critical,” Blumreiter said. “The earlier the OEM or Tier 1 gets involved, the more say they can have in our development. It’s a two-way street – we gain a lot from working closely with them.”

Coronavirus impact
These many challenges are now compounded by COVID-19 restrictions. The pandemic is changing more than the working conditions for employees who work from home. It has fueled online purchases, increasing truck deliveries at a time when concerns about  infection prompted many drivers to leave the field, exacerbating the driver shortage.

Autonomous-vehicle developers feel they have a solution. “Increased demand during COVID has only borne out how much we need this technology,” said Jordan Coleman, general counsel and VP of policy at Kodiak Robotics, which is developing SAE Level 4 trucks. “Autonomous technology is needed to future-proof the industry.”

The coronavirus impact is forcing startups to expand their creativity to product initiatives. When few people travel to see a demonstration, it’s far harder to convince investors and customers that a product or concept is viable. “COVID has impacted the whole ecosystem, especially in that we don’t have the ability to have face-to-face meetings,” said Stephan Olsen, general manager at the PACCAR Innovation Center. “There’s a lot of creativity at startups. They are finding ways to demonstrate their technology without being in the same room.”

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