The struggles of autonomous truck makers to move beyond the testing stage are well chronicled. Seven-year-old Gatik, which owns the short-haul pickup-and-delivery “middle mile,” is an exception. By all indications, it has the money, the partnerships and the runway to reach mass production in 2027.
Itochu wrote an early check to Gatik. Neither that amount nor its latest investment were publicly disclosed. But it follows Japanese truck maker Isuzu Corp.’s $30 million investment. The goal is mass producing Gatik-equipped autonomous trucks three years from now.
The moves are related. Isuzu and Itochu have a joint venture financing company for Isuzu trucks. Gatik now benefits from that.
Gatik co-founder and CEO Gautam Narang. (Photo: Gatik)
“We have over 300 trucks that are already signed and committed that we plan to deploy by the end of next year,” Narang told me in an interview on Monday.
Gatik’s Locked-down contracts
There’s nothing squishy about the contracts. Customers sign five-year agreements, which allows Gatik to lease trucks from Holman Transportation and Ryder System Inc. Part of the subscription-based fee Gatik collects for its autonomous-trucks-as-a-service model covers the lease payments. With Ryder and others doing maintenance, Gatik operates both operationally and asset-light.
“These are not reservations or bookings. These are multiyear [agreements] without any termination for convenience, meaning our contracts do not have an out,” Narang said. “That also means that we do not take any utilization risk, meaning even if the trucks are sitting idle, we get paid. It’s a beautiful and scalable business model.”
Gatik autonomously delivers paper products for Georgia Pacific to 34 Sam’s Club and Costco warehouses. (Photo: Gatik)
Gatik doesn’t fret about the ups and downs of spot freight rates. Based on collecting an hourly rate for 12 hours of operation, each Gatik autonomous truck generates about $200,000 in revenue a year, Narang said.
Gatik is ‘picky’ about customers
Gatik doesn’t accept just any customer. Their needs must fit its autonomous adaptation of hub-and-spoke delivery.
“Before we engage with the customer, we ask for a lot of data [about] pickup locations, drop-off locations, the sequence of stops and the constraints at each of these stops,” Narang said. “We do all the analysis upfront before we say yes to a customer.
“We have a lot of leverage. Customers don’t have another option,. There is no other autonomy company that is providing a solution or a service like ours. We are very picky and deliberate about whom we partner with.”
For at least the first one or two years, Gatik monitors a customer’s route with a safety driver on board. In later years, the trucks operate in “freight-only,” or driverless mode.
Much of Gatik’s planned expansion is aimed at densifying existing routes with new customers. More states will be added in the southern U.S. next year. How many and which states, Narang declined to say. The expansion will seek to densify routes from the beginning.
“Having a presence in an existing market, we are doubling down and adding more trucks to those markets versus going broad,” he said.
Perfect safety record
Gatik’s first driver-out runs occurred for Walmart in Northwest Arkansas in 2021. Grocery giant Loblaw in Ontario, Canada, an early Gatik customer, came next in 2022. Tyson Foods in Northwest Arkansas and Kroger in the Dallas-Fort Worth area expect to begin driverless operations by the end of this year or early 2025.
Gatik autonomous deliveries to Kroger stores in the Dallas-Fort Worth area are expected to go driverless late this year or in early 2025. (Photo: Gatik)
After 600,000 autonomous deliveries for 10 Fortune 500 companies — not all of them publicly named — Gatik has a perfect safety record. Route designs intentionally avoid schools, fire stations and other potentially disruptive traffic situations.
A few thousand deliveries so far had no human driver, Narang said. Gatik is on its third-generation chassis. It has the redundant steering, braking and compute features required when no human driver is present.
With regular revenue, privately held Gatik has about $100 million in the bank. That number will grow when its latest capital raise closes this summer. The recent Isuzu and Itochu investments don’t count. According to Crunchbase, Gatik has raised $152.9 million since 2017. That includes $85 million in its Series B round that closed in August 2021.
“The company has years of runway,” Narang said. “A majority of the players in our industry are trying to raise money. But not everyone is successful.”
The Daimler Truck and Volvo Group cellcentric joint venture is developing a more powerful and small NextGen fuel cell system. But don’t look for series production before the end of the decade. The system boasts peak power exceeding 350 kilowatts in a compact single system compared to the current cellcentric offering of 150kW. Volvo has shown two of the BZA150 stacks combined for a 300kW output.
The current cellcentric fuel cell — the BZA150 — will be followed by a single stack with more than twice the kilowatt output by late in the decade. (Photo: cellcentric)
In October, Daimler accomplished a 1,047-kilometer (650-mile) test run from Worth, Germany, to Berlin on a single fill of liquid hydrogen for the current fuel cell system.
“During development, we specifically considered North American transportation requirements, especially regarding the long-haul segment,” Nicholas Loughlan, cellcentric chief technology office, said at the recent Advanced Clean Transportation Expo.
The lack of hydrogen fuel infrastructure allows cellcentric to take its time in bringing the advanced fuel cell system to North America. That allows time to work on cost of ownership, adherence to tougher nitrogen-oxide emissions coming later in the decade and recyclability.
“NextGen is engineered for high mileage and trimmed for cost efficiency to make it the absolute champ in operating costs for heavy-duty trucks,” Loughlan said.
Electric truck batteries are hardly old, but Daimler Truck North America is preparing for what happens in their second life after their transportation value is exhausted.
Hyliion has begun producing additive manufacturing of parts for its Karno generator at its Austin, Texas, headquarters in addition to operations in suburban Cincinnati.
Hexagon Puruswill supply components to Toyota Motor North America for serial production of its heavy-duty fuel cell electric powertrain kits in Kentucky.
Clean Energy Fuels has opened two new renewable natural gas stations for heavy-duty trucks in Southern California, increasing its footprint for offering low-carbon fuels.
Toyota Motor Corp.-owned Hino Motors is closing a plant in Marion, Arkansas, cutting 1,300 parts-making jobs.
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