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PACCAR (PCAR), Aurora to Jointly Develop Autonomous Big Rigs

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PACCAR Inc. (PCAR - Free Report) recently entered into a global, strategic agreement with Aurora to develop, test and commercialize its autonomous Peterbilt and Kenworth trucks. This collaboration will amalgamate PACCAR’s autonomous vehicle platform with the Aurora Driver to enhance the safety and operational efficiency of PACCAR customers.

Within the partnership, PACCAR will provide autonomous-enabled vehicles with industry-leading quality, durability and reliability. Aurora, the Silicon Valley-based self-driving start-up, will, in turn, offer industry-dominating self-driving technology, including hardware, software and operational services to PACCAR.

Per Aurora, which recently acquired Uber’s Advanced Technologies Group, the ride-hailing company’s driverless vehicle division, it will work with PACCAR to create an extensive plan to capture a niche in the autonomous trucking industry. Aurora and PACCAR anticipate working closely on every element of collaboration from component sourcing and vehicle technology reforms to the integration of the Peterbilt and Kenworth trucks with Aurora’s technologies. In fact, the partnership also encompasses vehicle validation by Aurora at the PACCAR Technical Center and production support in PACCAR’s plants.

The aim of this collaboration is to enhance freight efficiency and safety for PACCAR customers. The Kenworth T680 and Peterbilt 579 trucks utilizing the Aurora Driver are expected to be rolled out in North America over the next few years.

The future of driving is autonomous. Higher levels of autonomy have the potential to reduce risky and dangerous driver behavior. The rapid development in the self-driving vehicle space can be attributed to breakthroughs in technology, with the integration of robust AI and ML capabilities in advanced driver-assistance systems. Moreover, improving the neural networking capabilities, and advancements in digital mapping and obstacle recognition functionalities will likely lead to safer navigation, reduction in accidents, as well as commuter comfort. Per Allied Market Research, the autonomous driving space is projected to witness a CAGR of 39.5% between 2019 and 2026, and reach $556.67 billion by 2026.

The coronavirus pandemic has, in fact, also expedited the adoption of autonomous vehicles for delivery. Self-driving cars, vans, and trucks reduce the risk of spreading diseases by limiting driver contact.

Amid this scenario, Aurora is a relatively young but stronger player in the fiercely-competitive world of self-driving big rigs. In fact, Aurora views long-haul trucking, not passenger cars, as more crucial for the autonomous vehicle space. Thus, the company is now more focused on the development of semi-trailer trucks over that of cars, its original focus. This partnership is Aurora’s first commercial application in trucking and takes the company a step closer to unraveling the true capability of the autonomous freight market.

PACCAR is among the largest manufacturers of medium- and heavy-duty trucks in the world. The company is involved in the design, manufacture, and customer support of light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt, Leyland Trucks, and DAF brands.

PACCAR is also thrilled about this new alliance. The trucking giant looks forward to partnering with Aurora owing to its industry-leading autonomous driving technology and brilliant team. This strategic partnership, furthermore, complements PACCAR’s leading commercial vehicle quality, technology and innovation. PACCAR is optimistic that the deal with Aurora will aid the truck maker in its pursuit of revolutionizing the autonomous trucking industry.

With the latest partnership, PACCAR joins some of the major trucking manufacturers in forming alliances with autonomous vehicle start-ups.

Last October, TuSimple signed a deal with Navistar NAV to become the automaker’s self-driving tech supplier, with a goal of bringing a Level 4 autonomous truck on roads by 2024. Similarly Daimler DDAIF also partnered with Waymo, Alphabet GOOGL-owned self-driving car pioneer, on a Level 4 model.

PACCAR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of the company have appreciated 15.1% in the past year, significantly underperforming the industry’s rally of 297.7%.

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