This week, we share musings from Rusty Rush, CEO of the nation’s largest network of truck dealerships and answer three questions posed to PACCAR CEO Preston Feight on autonomous partner Aurora. Of course, we have some of the people moves and partnerships you may have missed. You can get Truck Talk delivered via email by subscribing at https://www.freightwaves.com/truck-talk.
If you don’t want to know, don’t ask
Rusty Rush will never be accused of giving a short answer when a long one will do. The CEO of San Antonio-based Rush Enterprises seems to enjoy sharing his thoughts — he calls them ramblings — on the trucking industry from his perch atop the nation’s largest network of truck dealerships. Here are a few nonfinancial musings from the company’s Q4 earnings call on Thursday:
On Navistar, one of the brands he sells, tying the knot with TRATON Group: “The one thing that we used to hear four or five years ago [is Navistar’s] long-term viability. Just wipe that off the board. The other piece is some of their alignments, whether it be with General Motors working on hydrogen or some of the other announcements. They’ve already been collaborating [with TRATON] on products that will be coming to market. It’s not like it just started.”
On the trucking industry’s breakneck pace and supply chain constraints: “As manufacturers continue to raise build rates, that just puts more stress [on the supply chain]. Other parts of the economy demand similar-type things to build their products. The demand is just huge. It’s across the board. Nobody goes on vacation. They just buy bicycles and washing machines and refrigerators and TVs and Xboxes.”
On his outlook for electric trucks: “Technology has not arrived at what people believe and want demand to be. Do not get carried away with thinking there’s big fleets running up and down the highway. There are not. Anybody that thinks we’re going to be running long haul in five years has another think coming. Even looking out 15 years, I don’t believe we’ll be in [battery-electric] long-haul Class 8.”
On autonomous trucking: “There’s going to need more state laws and regulations passed to allow it. You’re not going to see [fully autonomous] Level 5, which means there’s nobody in the cab. The human being watching an 80,000-pound vehicle go down the road with no driver, the first thing they’re going to do is make a right-hand turn to get out of the way.”
3 self-driving truck questions with PACCAR CEO Preston Feight
Autonomous trucking partnerships between manufacturers and driverless software developers are firming up. Daimler and Waymo. Navistar and TuSimple. Plus and China’s FAW. Analysts questioned PACCAR Inc. (NASDAQ: PCAR) CEO Preston Feight on the company’s tie-up with Aurora during PACCAR’s Q4 earnings call. The Q&A is edited for space.
Q. Beyond R&D, where are the incremental costs for products that are not providing revenue, let alone profits, that you would normally see?
A: Our engineering teams do a fantastic job of working with partners. We pick industry leaders like Aurora. Together, that becomes an efficient way to bring an industry-leading solution to market at a reasonable cost.
Q: Will your autonomous platform be open source or exclusive?
A: This is a nascent technology that has a lot of development. And it’s going to take several years. Aurora is a great company with a lot of really skilled people. Our team is also skilled. We think working together is the best approach to bring something robust, safe and secure to market.
Q: How should we think about Aurora in terms of your competitive position? Is it going to drive the fastest speed to market for PACCAR with Level 4 autonomy? And do you see a meaningful increase in pricing power as you do that?
A: It will be advantageous for Aurora. And PACCAR will benefit because we’ll have this autonomously enabled platform [that] will use our distribution system. It should create a win for us, a win for Aurora and a win for our customers.
Howdy, partner
Speaking of Aurora, it announced this week it will work with Toyota (NYSE: TM) on autonomous ride hailing based on the Uber technology it took on in December. … Koch Industries subsidiary Koch Strategic Platforms is partnering with European electric charging developer EVBox. Koch wants to help kick-start EVBox, which is backed by special purpose acquisition company (SPAC) TPG Pace Beneficial Finance Corp. (NYSE: TPGY) … Startup Hybrid driveline maker Hyliion Holdings (NYSE: HYLN) plans a next-generation battery module using Toshiba Corp. (OTC: TOSYY) lithium-titanate (LTO) cells for longer battery life, higher charging rates and improved safety through faster cooling. The battery module comes in the next evolution of Hyliion’s Hybrid system and the Hypertruck ERX.
People, places and things
Navistar (NYSE: NAV) is doubling down on its 900,000-square-foot assembly plant under construction in San Antonio, buying existing properties that will house a validation center to test electric truck components and a truck specialty center for postproduction customization. … Separately, Navistar and its dealers are taking a swing at technician recruiting, including training equipment and advice. … BorgWarner’s (NYSE: BWA) latest High Voltage Hairpin electric motor is equipped with 800-volt capabilities and has a large European commercial vehicle manufacturer waiting for its 2024 launch. … Fuel cell startup Loop Energy is getting best wishes from investor Cummins Inc. (NYSE: CMI) as it moves toward a $100 million initial public offering in 10 Canadian provinces.
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Alan