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A couple of former Alphabet Inc. (NASDAQ:GOOGC) employees have quietly launched Ottomotto LLC, a startup dedicated to building hardware that will allow existing 18-wheelers to operate without driver control.

The company is serious and in addition to former Alphabet employees has also gathered up software engineers from Apple Inc. (NASDAQ:AAPLC) and Tesla Motors Inc. (NASDAQ:TSLAD) to help make up its 41 employees.

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Testing Has Begun

Testing of 3 Volvo AB trucks has already started and plans include allowing those vehicles to travel on the highway without a driver operating the vehicle – at least some of the time. Only a handful of states sanction fully autonomous commercial trucks.

Otto declined to say when its technology would be ready but said it hopes to sell the system to truck fleets soon. Otto’s technology would let trucks travel without a driver operating pedals or the steering wheel.

Interim Steps

Ahead of fully automated trucks, progress is being made in making the job of drivers easier. This includes the addition of everything from cruise control, automatic-manual transmissions and – borrowing from the automotive industry – collision avoidance systems.

Freightliner, a Daimler division even has a heavy-duty truck that allows the driver to turn over steering and other duties to the computer during long trips. This, officials say, could reduce driver burnout, a significant problem that contributes to a shortage of drivers industry-wide.

Platooning

Another automated technique being tested is known as platooning. This involves 2 or 3 trucks that closely follow each other with the lead truck controlling brakes and acceleration. The technique allows for “drafting” similar to what NASCAR drivers do to save fuel in races.

With platooning, each truck has cruise-control that keeps the vehicles spaced as close as 30 feet apart. Consultancy Frost & Sullivan has predicted platooning could become common by 2020.

Cost Factors

While there will be significant push back from unions and regulatory hurdles to overcome, the potential cost savings associated with driverless trucking are hard to ignore.

With drivers making up 33% - 75% of the cost of trucking, fewer drivers means more savings. In addition, autonomous trucks could be on the road almost 24 hours a day while human drivers are held to only 11.

Finally, driverless trucks can robotically optimize speed for better fuel efficiency than human drivers can achieve.

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Investing in Driverless Trucking

Investors may be tempted to head toward Google due to the company’s interest in robotics but as Nanalyze points out, Google will likely have almost no actual exposure to autonomous trucking technology.

Instead, Nanalyze suggests looking at stocks closer to the action.

JB Hunt Transport Services (NASDAQ:JBHTC)

One of the most obvious beneficiaries of driverless trucking will be trucking companies themselves. J.B. Hunt Transport Services, Inc. is a huge diversified transportation services and logistics company.

The company transports full-load containerized freight throughout the continental United States and portions of Canada and Mexico and also manages or provides logistics and transportation-related services.

Wal-Mart Stores Inc. (NYSE:WMTD)

Walmart’s 6,000 trucks make it one of the largest fleet operators in the U.S. The company has always focused on efficiency and driverless trucking seems like a natural move.

Given net profit margins under 4%, any savings the company can realize would be meaningful.

Mobileye NV Stock not found MBLY

Mobileye NV is the only stock that offers pure-play exposure to autonomous vehicles. This “all-in” stance goes back to 2009 when Mobileye began installing its technology in C.R. England’s entire fleet of 3,500 trucks. So far, 1,000 are already done.



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