Truck Platooning Market Growth Opportunities 2016 to 2030 Autonomous Trucking Technologies to Launch Massive Productivity, Safety,

and Efficiency Gains in Freight Mobility

NFC0-18

September 2016

BRIEF SUMMARY

VERSION

2 NFC0-18

Contents

Section Slide Number

Executive Summary 3

Research Scope, Objectives, Background, and Methodology 11

Automation Overview 16

Introduction to Platooning 19

Regulatory Environment Analysis 28

Technologies in Platooning 38

Drivers and Restraints 48

Truck Platooning—Market Forecasts 51

Key Projects in Truck Platooning 58

Company Profiles—OEM 64

Company Profiles—Suppliers 68

Fleet Owner and Driver Perspectives on Truck Platooning 76

Conclusion and Future Outlook 79

Appendix 83

3 NFC0-18

Return to contents

Executive Summary

4 NFC0-18

Truck Platooning Market: Executive Summary, Global, 2015

1

Total platooning revenue is estimated to reach $12,231 million in the United States and $2,404

million in Europe by 2030. Growth is expected at a compound annual growth rate (CAGR) of 21.8%

in the United States and 33.0% in Europe between 2020 and 2030.

2

The legal framework is being formulated in Europe and the United States. Government support is

expected to represent a significant factor in the proliferation of autonomous trucks by the year 2025.

Many regional governments such as England, Sweden, and some US states are pushing

autonomous driving technologies.

3

Platooning is quickly becoming a reality in the trucking industry. Most key original equipment

manufacturers (OEMs) and Tier I suppliers are intensifying efforts to develop a functioning system

and business model for platooning. The next step in the process is to convince fleets to buy into the

benefits of truck platooning.

4

Most major OEMs possess autonomous trucks in their future product strategies. Moreover, these

OEMs truly believe the future of trucking lies in autonomous driving technologies. This strategy has

allowed OEMs to increase efforts towards complete vertical integration of their supply chains and

systems. Autonomous trucks provide the opportunity to differentiate the OEMs brand and

technological capabilities.

5 The technology to build a platooning truck is available and many key OEMs have demonstrated

capabilities and product strategies towards developing a fully functional platooning truck.

Source: Frost & Sullivan

Executive Summary—Key Findings Increasing interest and adoption bolstered by safety mandates will ensure strong growth of vehicles able to

platoon.

5 NFC0-18

Truck Platooning Market: Executive Summary, Global, 2015

Executive Summary—Mergers, Acquisitions, and Investments

Source: Frost & Sullivan

Isuzu

Microsoft

Jaybridge

Robotics

Uber Tata

Fund

Volvo

Otto

deCarta

+ Peloton

Techno-

logy

Lockheed

Martin Paccar

Meritor

Wabco

+ TomTom

Telematics Simacan

Dutch

Govt.

GM

Lyft

Cruise

Automotive

Mergers

Acquisitions

Investments

$100 million

$17 million co-led by

Denso and Intel Capital

$500 million

Driver Assisted

Truck Platooning

conducted by ATRI

OEM Independent Truck

Platooning Control Tower

Toyota

Connect

Toyota

Significant cost savings and huge potential to deliver a disruptive change are key drivers pushing market

participants to invest heavily in the trucking industry.

$16 million Denso Castrol Magna + + +

Technology Companies

OEM Operators

Others

6 NFC0-18

Executive Summary—Truck Platooning: Fleet Angle Freight transportation via trucks will remain significantly relied upon; truck platooning provides fleets the

opportunity to reduce both fuel consumption and driver stress, while improving productivity.

Source: Frost & Sullivan

Truck Platooning Market: Truck Platooning—Fleet Angle, Global, 2015

Fleet Productivity

• Improvements in freight logistics

planning

• Reduction in fuel consumption

and traffic accidents

Driver Retention

• Health, wellness, and

wellbeing focus through

reduction in driver stress

to help retain older

drivers

• Improving working

conditions and ability to

reward drivers for good

driving behavior

Strict Safety Regulations

• Driver monitoring and information

analytics

• Active integrated safety systems

• Regulation compliance monitoring

(CSA- compliance, safety,

accountability and hours of service)

Operation Requirements

• Time and zone-wise access needed

• Fleet-type operations important, as truck and

box-trailer combinations are most effective in

platooning applications

• Understanding the benefits of truck

platooning in regards to dedicated-route

freight transport versus non-dedicated route

operations

Inter-fleet Platooning

• Inter-fleet platooning organization

expected to be the most

difficult aspect of truck

platooning with many

persistent challenges such as:

o Determining the leader of

the truck platoon

o Connecting and forming a

platoon with on-highway trucks

o Costs associated with forming a platoon

Intra-fleet Platooning

• Requires truck resource planning and freight

logistics within fleets

• Location-based platooning to be key aspect

for intra-fleet planning—Fleet operations will

need to determine optimal time and place for

truck platoons to form and dissolve

7 NFC0-18

Executive Summary—Path to Platooning: Heavy Duty (HD) Trucking

Interest

levels

Revenue

potential Technology

Market Penetration of Required

Technologies

• ACC and CMS on trucks far

from becoming standard

across all brands and trims,

due to extreme price sensitivity

of fleet operators

Installation Challenges

• Fleet-wide installation

• Funding and partnerships

• Lack of clarity on who will be

system integrator

Uncertainty About Mixed-interest

Levels

• Potential to increase value

• Waiting time to platoon negate

with savings on fuel

• Proven safety in real-world

situations

• ―If-it-is-not-broken-why-fix-it?‖

attitude common in commercial

vehicle operations

Revenue Potential

• Convincing fleet owners about

returns on investment despite

low fuel prices

Existing Facilities

• Legal aspects of platooning still

to be proposed formally

• Insurance and litigation

structure still in unfamiliar

territory

Agreeing on Standards Across

Several Aspects

• Interoperability between fleets

• Truck certification for

platooning

Business Models to Choose From

• Different rate per class or

weight

• Charge by the hour

• Charge by usage

• Subscription model or one-time

cost

Technology

• Perceived as extremely

advanced technology with the

potential to cause

apprehensions in early

adoption by fleets

Source: Frost & Sullivan

Several questions remain unanswered as much of the framework for platooning is still falling into place.

Truck Platooning Market: HD Trucking Challenges, Global, 2015

ACC = adaptive cruise control; CMS = collision mitigation system

8 NFC0-18

Services, 71.3%

Hardware, 28.7%

2020

Executive Summary—Overview of Truck Platooning Market

2030

Truck Platooning Market: Platooning Revenue Split by Source, Global, 2020–2030

• Peloton is expected to dominate the truck platooning market (given the premise that it will remain

independent until 2030) in both aftermarket and OEM channels. However, its acquisition and synergy with

leading OEMs or Tier I companies cannot be ruled out.

• Daimler is expected to be a leading enabler of platooning in the European market with Volvo and Scania

close behind. Platooning is expected to be offered as an added capability in the telematics package or for a

small fee.

Services, 67.9%

Hardware, 32.1%

Truck Platooning Market: Revenue Split by Source, US, 2030

Total Revenue

~$1,837.7

Million

Total Revenue

~$14,635.5

Million

CAGR 2020–2030: 23.1%

Currently, North America, Europe, and Japan are the only regions actively involved in showcasing platooning

projects.

Source: Frost & Sullivan

Truck Platooning Market: Revenue

Split by Source, Europe, 2030

9 NFC0-18

Executive Summary—Regulatory Changes for Platooning Regulatory mandates and legislative frameworks surrounding usage of autonomous driving technologies and

on-road autonomous trucks will be the strongest indicators towards the future success of this market.

Source: Frost & Sullivan

Truck Platooning Market: Regulatory Changes Necessary, Global, 2015 and 2030

*EPA: Environmental Protection Agency; GHG: Greenhouse gases

V2X = vehicle to anything; V2V = vehicle to vehicle; V2I = vehicle to infrastructure Moderate Important Unimportant

Regulation Significance Current Status (2015) Future Status (2030)

Driver Hours (HOS)

• Maximum 11-hour driving limit after 10 hours of

consecutive rest

• Required to enter work hours into a logbook

• Customized ruling for drivers of trucks (level three or

above) to be able to log more hours consecutively,

while driving in autonomous mode

Emission

• EPA GHG 14*

• EURO VI

• Continued efforts to reduce greenhouse emissions while

making trucks run more efficiently and effectively

• Reduced fuel consumption indirectly reducing emissions

Safety

• Mandates for stability control systems

• Purposed mandates for forward-collision

mitigation, braking, and lane-departure warning

• Every new truck being produced mandated to have

advanced safety systems (sensors, cameras, electronic

controls, and stability) installed, thus enabling

proliferation of autonomous driving technologies

Cyber-security

• None currently • Regulations surrounding cybersecurity to be new to the

trucking industry—with increasing threat of cyber

attacks, protection of autonomous vehicles needed

Commun-ication Network

• Purposed mandate for DSRC for passenger

vehicles

• Trucking mandates for DSRC communication and

implementation of V2X, V2V, and V2I communication

networks to be crucial for safe operation of autonomous

vehicles

Liability

• None currently for autonomous vehicles (testing

still required)

• Insurance, government, society, and the automotive

industry required to come to an understanding of the

risks and safety concerns regarding autonomous

vehicles on the road

10 NFC0-18

Truck Platooning Market: Current and Future Outlook, Global, 2015 and 2030

Executive Summary—Current and Future Outlook

Market

Status

Technology

Regional

Trends

Country 2015 2030

• OEMs are expected to develop in-house

autonomous solutions through strategic

partnerships.

• Tier I and Tier II suppliers are expected to

partner with OEMs to assist in advanced

autonomous technologies.

• A number of OEMs and research firms

have started experimenting on

autonomous technology by testing their

fleet on public roads.

• The market is beginning to attract other

industry participants and venture capital

firms to invest in autonomous technology.

• Level 2 platooning is expected to enter the

market.

• Every new truck being produced is

mandated to have advanced safety systems

(sensors, cameras, electronic controls, and

stability) installed, thus enabling proliferation

of autonomous driving technologies.

• Daimler and Volvo lead the development

of autonomous technology while

technology providers are working on cost-

effective platooning solutions.

• Otto introduced retro-fits of complete

autonomous technologies.

• The United States is expected to lead the

truck platooning market followed by Europe.

• Asian countries such as Japan and China

are also expected to enter the market.

• OEMs and associations from Europe and

the United States are showcasing

platooning projects in order to push

governments towards implementing

platooning solutions.

• Japan is one of the few other countries

actively involved in platooning projects.

Technology available today has the capability to produce a functional level 3 autonomous truck. However,

challenges must be addressed in regards to regulations, liability, business case, and societal concerns.

Source: Frost & Sullivan

11 NFC0-18

Research Scope, Objectives, Background, and Methodology

12 NFC0-18

Research Scope

Vehicle Type

2016 to 2030 Forecast Period

2015 to 2030 Study Period

2015 Base Year

Geographical Scope*

Commercial vehicles (includes light, medium, and heavy duty trucks)

Internal combustion engine (ICE), including diesel and gas Powertrain Type

Global: Europe and North America

*Note: Data from Asia has been included where relevant as approximate values and for comparative purposes. However, Asia is not covered in detail in this analysis.

Source: Frost & Sullivan

13 NFC0-18

Key Questions This Study Will Answer

Source: Frost & Sullivan

Truck Platooning Market: Key Questions This Study Will Answer, Global, 2015

What are the current autonomous technologies available for commercial vehicles? How will it evolve

in the future?

What kind of strategies will OEMs use to offer platooning options to fleet operators? Who are the key

OEMs involved in platooning projects?

How will truck platooning help governments, municipalities, and fleet owners looking to reduce costs,

traffic congestion, and carbon footprint?

What are the upcoming technology solutions influencing truck platooning market trends? How will

existing service providers adapt to the shift in technology trends?

How will current and future technologies impact truck platooning growth? Will fleet owners adopt

autonomous technologies? How will this impact growth of the commercial vehicles market in 2025?

Which OEMs are partnered with key service providers? Will the entry of more OEMs affect the growth

of existing market participants?

14 NFC0-18

Research Background

Source: Frost & Sullivan

This study is an original research service that also expands on content drawn from ongoing research in

the areas of Class 4–8 original equipment and aftermarket trends, including:

• NA53—Strategic Analysis of the Global Platform Strategies of Major HD OEMs

• NCD5—Strategic Outlook of North American Heavy-duty Truck Dealership Focused Revenue

Streams and Growth Opportunities

• NE32—Strategic Outlook of North American Class 6-8 Truck Safety Systems Market

• NAAF—Strategic Analysis of Engine Downsizing Trends of North American Heavy-duty Truck

Manufacturers

• N6A8—Strategic Analysis of the North American Heavy-duty (Class 4-8 Truck) Repair Industry

• ND7A—2015 Outlook of the Global Commercial Vehicle Industry

• NEF9—Strategic Outlook of Global Commercial Vehicle Telematics Market in 2015

• NF41—Global Overview of Truck Video Safety Solutions Market

• NCBE—Prognostics in the European and North American Trucking Industry—Big Data is Creating

all the Difference

• NE67—Impact Analysis of Big Data in the Trucking Industry

• NEC5—Strategic Outlook for Autonomous Heavy-duty Trucks

The study is supplemented by ongoing interactions with vehicle manufacturers, Tier I suppliers,

telematics providers, and freight mobility providers.

15 NFC0-18

Bendix Freightliner Google Omnitracs

Meritor Volvo/Mack Apple Geotab

Allison Navistar Otto Leddar

Eaton PACCAR Continental AG Bosch

Research Methodology

Source: Frost & Sullivan

Truck Platooning Market: Research Methodology, Global, 2015

Frost & Sullivan’s research services are based on secondary and

primary research data.

Information was extracted from studies and project material in the Frost

& Sullivan database, as well as information gathered from technical

papers, specialized magazines, seminars, and Internet research.

Research

Methodology

Secondary

Research

Primary

Research

More than 25 interviews were conducted over the phone by senior

consultants/industry analysts with OEMs, regulatory authorities, and

distributors. Primary research accounts for 80% of the total research.

Truck Platooning Market: Partial List of Industry Participants, Global, 2015

16 NFC0-18

2

3

1

Shift to automation is expected to improve efficiency and push governments to introduce

legislation supporting automation and truck platooning. OEMs will start producing in-

house autonomous solutions and form strategic partnerships with technology solution

providers to further develop autonomous technology.

The European and US truck platooning hardware revenue will reach $4.62 billion by

2030. The United States will corner the major share of 85%. This is mainly due to early

implementation of platooning operations with regulatory support.

The European and US truck platooning service revenue will reach $10.01 billion by

2030. The United States will secure the major share of 83%. This is mainly due to

subscription-based models that will exhibit massive growth at a CAGR 28.8% from 2020

to 2030.

The Last Word—3 Big Predictions

Source: Frost & Sullivan

17 NFC0-18

Market Engineering Methodology

One of Frost & Sullivan’s core deliverables

is its Market Engineering studies. They

are based on our proprietary Market

Engineering Methodology. This approach,

developed across the 50 years of

experience assessing global markets,

applies engineering rigor to the often

nebulous art of market forecasting and

interpretation.

A detailed description of the methodology

can be found here.

Source: Frost & Sullivan