Inceptio sees big jump in China sales of driver-assist truck tech, plans overseas foray

CreateAl Holdings

29/08/2023 10:56

SHANGHAI, Aug 29 (Reuters) - Chinese startup Inceptio
expects the number of trucks in China using its driver-assist
technology will quadruple by mid-2024 from around 600 currently,
and also plans to begin sales overseas next year.
    Inceptio says the tech enables a very long-distance trucking
trip to be completed by one driver rather than two as is often
required and can reduce hauling costs by 5% to 7%.
    Under its current business model, Inceptio develops the
technology, state-owned Dongfeng Automobile Co  600006.SS ,
manufactures the trucks which are then sold to clients such as
Nestle  NESN.S , Budweiser and large Chinese freight companies
like ZT Freight and Deppon Express.
    Growing cost pressures on such companies will drive demand,
said Chief Executive Julian Ma who spoke with Reuters in an
interview and at a media event.
    "This is a new 'blue ocean' market," he said, using a phrase
that describes an underdeveloped market with few competitors.
Inceptio's rivals include China's Plus.ai and TuSimple  TSP.O ,
which is Chinese-founded but headquartered in the U.S.
    "China is leading globally in terms of building the industry
with suppliers of chips, sensors, the automakers and developers
of autonomous trucking technologies," he said.
    The company has raised more than $678 million since 2020
from investors including CATL  300750.SZ  and Hongshan,
previously known as Sequoia China.
    Over the next three to five years, Inceptio is looking at
offering services to help manage truck fleets, Ma said. 
    While China's trucking market is very big, worth some 4
trillion yuan ($550 billion) annually, tough competition means
profit margins tend to be thin and Inceptio now plans to "test
the waters" in overseas markets such as South East Asia, the
Middle East and Japan from next year, Ma added.
    The U.S. market was "beyond reach due to geopolitical
reasons," he also said.  
    China has a highly fragmented trucking industry. Boston
Consulting estimated in 2021 that the country had 7.3 million
heavy trucks on the road. 
    Inceptio eventually hopes that trucks will be eventually
allowed to go fully autonomous, enabling it to build a robotruck
fleet. China could see two to three robotruck-focused firms
emerge in the next three to five years should regulations go in
that direction, Ma said. 
    

 (Reporting by Zhang Yan and Brenda Goh; Editing by Edwina
Gibbs)
 ((Zoey.Zhang@thomsonreuters.com;))