Isuzu Motors Limited and Gatik have taken a major step towards scaling up operations for North American deployment of “Freight-Only” transport.
In a first-of-its-kind partnership for medium duty trucks running middle mile freight, the companies will design and develop a new truck chassis (with L4 redundancy) that ensures safety when equipped with an autonomous driving system. This autonomy-ready platform is set to begin rolling off the assembly line of a dedicated Isuzu factory in 2027.
Additionally, Isuzu will invest $30M in Gatik.
Since launching freight services with Walmart back in 2021, Gatik has been the only company providing autonomous middle mile logistics services in North America, using Class 3-7 autonomous trucks.
In fact, back in 2021 Gatik was the first company globally to provide fully driverless freight transport. Founded in 2017, they have been steadily growing their customer base over the last three years, and now count Fortune 500 companies including Kroger, Pitney Bowes, Loblaw, Tyson Foods, and Walmart among their partners. All along, Isuzu has been their OEM partner, with initial autonomy capability upfitted after production. As with many of the autonomous vehicle (AV) truck players, the path to scale up is to have the autonomy-ready platform fully produced by the vehicle manufacturer. Gatik also has operational and engineering partnerships with Ryder and Goodyear.
$250B Middle Mile Market
Most startup players in truck autonomy are focusing on long haul operations using Class 8 tractor trailers.
While this tends to get the most attention, the North American middle mile sector is a massive freight play. Shipments between distribution centers and retail stores occur frequently to keep inventories up and serve e-commerce pickup points.
Gatik’s middle mile routes are repetitive, which simplifies the technical challenge. As Gatik notes, their approach “significantly limits the number of unusual events we encounter, enabling us to maximize safety and vehicle performance.” Gatik trips range from a few miles up to a few hundred miles, dealing with traffic lights, stop signs, vulnerable road users, and all manner of complexities typical of surface streets.
Gatik’s Class 3-7 trucks are currently deployed in Texas, Arkansas, and Ontario. The company is currently running over 65 trucks; some routes have gone driverless (Freight-Only) and others are supervised by safety drivers. These are revenue producing operations. The company expects to deploy their Freight-Only service in the Dallas area at meaningful scale at the end of this year and into 2025.
In a recent press release, Gautam Narang, CEO and co-Founder of Gatik, noted that, “In 2021, Gatik launched the world’s first fully driverless commercial transportation service with a Fortune 500 retailer, and we are thrilled to be once again achieving an industry-first milestone by working with our partner Isuzu towards mass production of SAE Level 4 autonomous trucks. This partnership, coupled with Isuzu’s investment in Gatik, signals the company’s confidence in our technology and our world-class team, and we’re excited to bring autonomous transportation to the market at significant scale in the coming years.”
Hiroshi Sato, executive officer of Isuzu commented “As part of our April 2024 mid-term business plan announcement, we are committed to establishing three pillars of new business for the future: autonomous driving solutions, connected services, and carbon neutral solutions. As part of our efforts to develop autonomous driving solutions, we’re delighted to be expanding our relationship with Gatik to be operation ready in 2027.”
Isuzu’s Leadership Play
As noted by Mr. Sato, the “ISUZU Transformation – Growth to 2030 (IX)” marks a shift to focus strongly on autonomous driving solutions as one of three pillars. Over $2B is budgeted.
To dig a little deeper, I had a wide-ranging discussion with Shaun Skinner, President and CEO of Isuzu Commercial Truck of America.
I first wanted to get the lay of the land regarding the Class 3-7 truck market when it comes to autonomy. Mr. Skinner said the box truck market has been slower to adopt even basic Advanced Driver Assistance Systems when compared to other segments of the market. He noted that Isuzu has been and remains a leader in the market. “Isuzu was one of the first to introduce Automatic Emergency Braking in the class 4-5 commercial truck segment. Other features we now offer include adaptive cruise control, lane departure warning, and following distance warning.” Such features are hard to come by across the box truck market.
Compared to tech-focused Class 8 OEMs, it seemed to me to be a big leap to work with an Automated Driving Systems supplier starting way back in 2021. Mr. Skinner acknowledged that, yes, it felt a bit early, but they had been watching the space closely for some time. They were ready to engage with an autonomy partner by 2021. “Gatik’s area of focus and their approach matched nicely with what our priorities were. Our team felt they were the best match for our product and the way our customers use our products,” he said.
Looking back, he feels the timing was perfect.
For the corporate headquarters in Japan as well as the North America team, Mr. Skinner stressed that the U.S. market is a very high priority, such that this announcement to mass produce autonomous trucks in partnership with Gatik is particularly significant. From his perspective, Mr. Skinner said his team “needs to stay abreast of the activity in autonomy, learn what we don’t know, and be prepared as the market develops.”
How will the market develop as autonomy scales up? “It will likely be a three-legged stool encompassing the OEM, the dealer, and the customer,” which is already well developed by Isuzu, with 300 dealerships in the U.S. alone. “The customer expects a high level of sophistication and backup from the dealer. Autonomy will come to the end user through us as the OEM.”
There was no hesitation in Mr. Skinners answer to my next question. Is Isuzu actively looking for new autonomy partners for other use cases? “No, we are firmly with Gatik.”
UD Trucks, which produces Class 8 vehicles, is also under the Isuzu corporate umbrella. Similar to Isuzu Trucks, UD Trucks has launched “Fujin & Raijin. Vision 2030,” their roadmap that focuses on fully-electric and autonomous trucks.
Steady Steps Towards A Maturing Market
This development by Isuzu and Gatik – factory production of AV trucks– mirrors similar activity by Aurora, Plus, and Torc in the long-haul space. Not just “we’ve partnered,” but with specific timelines stated in some cases. Aurora is working with PACCAR and Volvo Group. Plus is working with IVECO and TRATON. Torc is tight with Daimler, given that Daimler owns 51% of the company. Despite these announcements, so far Gatik remains the only company to have deployed driverless operations commercially.
Also unique is that Isuzu has promised Gatik “a guaranteed allocation of trucks,” meaning that even if Isuzu decides to work with other companies, Gatik will be the priority when it comes to autonomous trucks coming off the assembly line. This is an important commitment by Isuzu and reduces business risk for Gatik.
All of these deals are very significant, yet it’s still early days. We can look to the various players, including Gatik and Isuzu, to provide proof points as it all gets more real.
The mass production announcements cluster around 2026-27. These are target dates; let’s wait and see what the actual timing will be.
What’s most important? The investments to meet these goals are happening now.
Disclosure: Richard Bishop is an Advisor to and/or equity holder with a variety of companies across the automated driving space, including Aurora, Gatik, and Plus which are discussed in this article.
About Gatik
Gatik, the leader in autonomous middle mile logistics, is revolutionizing B2B logistics with autonomous transportation-as-a-service (ATaaS) and prioritizing safe, consistent deliveries and streamlining freight movement by reducing congestion. The company focuses on short-haul, B2B logistics for Fortune 500 retailers and in 2021 launched the world’s first fully driverless commercial transportation service with Walmart. Gatik’s Class 3-7 autonomous box trucks are commercially deployed in multiple markets including Texas, Arkansas, and Ontario. Gatik is partnered with industry leaders including Ryder, Goodyear and Isuzu. Founded in 2017 by veterans of the autonomous technology industry, the company has offices in Mountain View, Dallas Fort Worth and Toronto.
