First SAE Level 2 Commercial Vehicles Coming to Market, Driving Safety and Connectivity

The new medium- and heavy-duty truck models for 2020 are beginning to ramp into production with a variety of emerging capabilities and features. These vehicles need to offer a compelling value proposition, as peak demand has begun to cool over the last several years with uncertainty from tariff/trade battles, Brexit, and an inverted yield curve, among other economic signals. Fleet owners are seeing earlier prototypes become real, from Society of Automotive Engineers (SAE) Level 2 automation to electrification and hybrids. These vehicles, as well as future iterations, will be further disclosed at the upcoming North America Commercial Vehicle Show (NACV) in Atlanta, Georgia in late October 2019.

Numerous fleet operators are seeking additional safety and connectivity features for their newly purchased or leased vehicles.The majority of commercial Original Equipment Manufacturers (OEMs) are beginning their 2020 production runs with newer technologies and/or offering them for additional models, with features cascading from higher priced vehicles further down the stack. All-electric drivetrain systems, however, remain in limited availability, often used for municipal buses, refuse trucks, or last mile deliveries, with a number in prototype or limited to road testing this model year.

Heavy-duty provider Freightliner is taking the lead in North America with its first SAE Level 2 automated Cascadia. Their adaptive, predictive cruise control comes standard and their in-cab Detroit Connect includes Over-the-Air (OTA) remote updates and analytics. Toyota-owned Hino is offering radar-based collision mitigation and lane departure warning systems as well as a free one-year subscription to its Insight Telematics. Hino’s Insight Remote Diagnostics also comes free for five years. Kenworth’s W990 now provides complementary Kenworth TruckTech+ remote diagnostics. Volvo’s VNX models will soon make the Volvo Active Driver Assist (VADA) 2.0 collision mitigation system, which has been standard on the VNR and VNL models, available.  Ford is including modems with 4G LTE Wi-Fi for up to 10 devices as standard across all its commercial vehicles (Class 1-7), with telematics and data services available as an add-on. Isuzu’s medium-duty trucks (Class 5) will offer Intel’s Mobileye Advanced Driver-Assistance System (ADAS) capabilities and should arrive by the middle of next year. Mitsubishi Fuso’s new Class 5 truck will include a complementary year of Verizon Connect. Peterbilt is now adding its SmartLINQ remote diagnostics option to its medium-duty trucks, with a free two-year subscription included with the option. Bendix Wingman Fusion ADAS is another technology option for several models, with collision mitigation coming this fall.

Key takeaways from the first of the 2020 medium- to heavy-duty models include a greater availability of safety and connectivity features across makes and models. Diagnostics connected to OTA are becoming more broadly available for more software updates and parameter programming as standard, which both materially reduces unplanned downtime for fleets and provides a plethora of data and insight for OEMs. Collision mitigation and adaptive cruise control are not only becoming more common, but are also combining with features such as lane centering and automatic steering correction (Level 2). Many of the subscription-based services are initially complementary, from telematics (often one year) to diagnostics (commonly two to five years). These features and services are becoming increasingly expected, especially by enterprise fleets, across vehicle models. OEMs expect to create loyalty and find ways to monetize this data in the future or at least reduce recalls and increase knowledge of feature utilization for future model and capability roadmaps.

As fleet operators’ expectations increase, OEMs will need to continue to add feature sets focused on safety and efficiency that cascade down, initially as options and then as standard features. This has, at a minimum, impact on nearer-term margins, but is part of the larger story of “as-a-service” automation and electrification/alternative-fuel vehicles in the coming decade. Questions remain about the advantages of platooning and if OEMs such as Daimler will skip from SAE Level 2 to Level 4 in the coming years. Some of the many challenges of making the leap to SAE Level 4 are evidenced by the delay of Tesla’s semi and recent growth in aftermarket retrofits—such as those from companies from TuSimple (with factory-production planned in 2023) to Waymo, Starsky Robotics, Embark (allegedly testing with Amazon), and others—that may focus on the underlying technology either for/with OEMs or large fleets that can afford (and trust) the retrofits or even plan to leverage, in Waymo’s case, for their own autonomous fleet.

Additionally, the battle over data management, ownership, access, security, and monetization looms over the 2020s. Most companies, including fleets, telematics providers, and OEMs, believe that they own the masses of data. In multiple cases already, fleets have not read the fine print to assess which access rights they cede to the technology providers. It is still possible that at some point OEMs will reduce current access to third-parties. As ADAS expands and more solutions are factory-fit, many aftermarket providers will be pressed to address their relevancy and profitability.