SHANGHAI (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, manufactures the trucks which are then sold to clients such as Nestle, 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, 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 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)