The technological sophistication level of today’s trucks has forced many stakeholders, suppliers and OEMs to rethink how they go to market.
Vertical integration has been underway in trucking for many years, but with interest rising in electrification and autonomy dance partnerships are forming that combine expertise across a various and quasi-related range.
The vertical integration of tomorrow is a lot different than simply stitching a proprietary engine to a proprietary transmission.
Cummins and Eaton formed a joint-venture in 2017 that Cummins Chairman and CEO Tom Linebarger says not only delivers advanced automated transmissions but also develops an integrated powertrain and service network.
The two companies have been partners for decades. It’s rare to see a Cummins engine without an Eaton transmission bolted behind it but the Eaton Cummins partnership formalizes the collaboration, accelerating both companies’ ability to expand their global footprints by combining Eaton and Cummins engineering and technological expertise.
Similarly, WABCO made headlines last week by announcing a merger agreement with ZF.
Citing the technological revolution currently in-play across the commercial vehicle segment, WABCO Chairman and CEO Jacques Esculier said the time had come for WABCO to evaluate its strategy going forward and that joining forces with ZF provides “access to critical technology and the global size and scale to de-risk the return on investment required as the industry transforms.”
I don’t think the new news of a pending WABCO/ZF merger was treated with the kind of big trucking news buzz that it really was.
In swallowing WABCO, ZF will be able to expand its dynamic vehicle control capabilities and ZF CEO Wolf-Henning Scheider says the acquisition creates “the foundation for ZF to offer comprehensive systems for safe and automated mobility solutions.”
I believe the combination of WABCO’s Advanced Driver Assistance System technologies with ZF’s expertise in driveline and chassis tech will create a powerful player in the autonomous truck space. All those pieces fit together and vertically integrating them at an early stage makes a lot of sense.
In announcing the merger, Esculier said this new level of strategic complexity and will attract new competition – including new entrants from outside trucking – that will bring unprecedented resources to the table. And it’s doing just that.
Daimler Trucks the next day announced it had agreed to acquire a majority stake in Torc Robotics, creating a technology powerhouse for automated trucks. Freightliner is already the leader in the autonomous clubhouse, offering Level 2 capabilities with the 2020 Cascadia.
In officially debuting the new Cascadia in January, Daimler Trucks boss Martin Daum said the company’s sights were already set on Level 4. Tying up with Torc is a major step in that direction in that if allows Detroit engineers to focus on the platform side – refining the Detroit Connect system that already enables Level 2 driving – while leaning on Torc’s expertise to fill in the gaps. Having already integrated its self-driving solutions on ground vehicles ranging from SUVs to 300-ton mining trucks, Torc’s Level 4 system has already been shown to operate well in all-weather urban and highway driving.
Torc Robotics Co-Founder and CEO Michael Fleming says he believes “the fastest and most efficient way to commercialize this revolutionary technology is to partner with OEMs,” and considering the burst of partnerships in the last two years, I think the industry would agree.
The market-shifting movements we saw take place in March, I believe, will be increasingly common as we travel further down this path of autonomy and electrification.