Swedish startup Einride rolls toward IPO as autonomous trucking is poised to remake a massive industry
Einride—a Swedish startup building autonomous trucks—is reported to be talking with banks about going public in the US at a valuation of more than $5 billion. The move—assuming it comes to fruition—will likely be heralded as a thaw in a sluggish IPO market, although the bigger story to follow will focus on how the emerging technology is set to remake a much larger industry.
While excitement about autonomous taxis has been building for years now—with Alphabet’s Waymo (NASDAQ: GOOGL), Tesla (NASDAQ: TSLA) and Amazon-owned Zoox (NASDAQ: AMZN) racing to roll out the technology—the market for driverless trucks could be a more valuable prize. The road freight industry is worth $875 billion a year in the US alone, and it’s recently been dogged by driver shortages that have been hard to solve in part because of the very simple fact that humans need to eat and sleep. Driverless trucks will eventually change all of that.
Einride, founded in 2016, was the first company to unleash a completely autonomous truck on a public road, and it’s already working with companies including PepsiCo (NASDAQ: PEP) to electrify routes in an effort that logically points toward full-scale automation. The startup—which has plenty of competition—also has a mobility platform that uses machine learning to help customers identify where and how its technology can improve their bottom lines.
“Autonomous trucking will likely develop with two overlapping use cases from 2027 to 2040,” McKinsey & Company wrote in a report, adding that the technology could help reduce costs that have shot up because of rising driver salaries, fuel prices and tolls. The consultancy said that a first phase will focus on transport between hubs along predefined routes, with full autonomy coalescing around 2040.
Global market
The global market for driverless trucks could reach an annual $616 billion by 2035 with the US having the fastest adoption rate, according to McKinsey. It noted that the largest savings would occur on longer-distance routes of more than 1,500 miles.
The Financial Times reported that Einride could list before the end of the year, and many investors will likely jump at the chance to participate for obvious reasons. Five tech IPOs that came to market last year with venture backing saw average first day gains of 32.1%, according to Renaissance Capital. Those returns grew to around 73% in the months that followed, with Reddit (NYSE: RDDT) and Astera Labs (NASDAQ: ALAB) both seeing triple-digit jumps.
Anyone angling to purchase shares in Einride when it IPOs, however, may want to consider that autonomous trucking—while promising—is still years away from really making a big impact. And there could also be big bumps ahead.
“Only a few fatal accidents could result in a negative public perception of autonomous trucking,” McKinsey wrote. “Shutting down a major highway or causing a major traffic jam would also likely cause the public and regulators to reject autonomous trucks.”
Despite the risks, the consultancy said that savvy fleet owners have already been preparing for the coming changes—regardless of which driverless truck or platform ends up on top—and it’s perhaps there where the savvy investor might also want to look. The coming hype cycle will focus on the truck manufacturers including startups like Einride, but it’s fleet operators such as UPS (NYSE: UPS), FedEx (NYSE: FDX), J.B. Hunt Transport Services (NASDAQ: JBHT), Knight-Swift Transport Services (NYSE: KNX), Schneider National (NYSE: SNDR), Landstar Systems (NASDAQ: LSTR), Old Dominion (NASDAQ: ODFL), TFI International (NYSE: TFII) and Ryder (NYSE: R) who are poised to benefit from the trip ahead.
