This week, we look at how technology patents suggest possible winners and also-rans in the autonomous trucking race to commercialization. And Cummins cuts a deal that replaces the sunsetting of its 20-year-old natural gas joint venture with Westport Fuel Systems.

A patent argument

Sizing up the prospects of autonomous software trucking companies needs a scorecard, or maybe a Racing Forum. There’s no question that a horse race to commercialization is underway. Distinguishing winners from also-rans is premature. One measurement is to look at intellectual property and its protection.

That is what Patent Forecast does. It sells itself as a creator of actionable business intelligence through a mix of analyst insight, AI and machine learning. Patents and applications for IP protection of a given company are core to the research.

It is not simply a numbers game, CEO JiNan Glasgow George told me. But protected IP is a good indicator of eventual commercial success.

The TuSimple fleet (Photo: TuSimple)

“There’s a lot of patents that relate to autonomous vehicles like Lidar technologies,” she said of radar that uses laser light to pinpoint objects in traffic. “But when we overlay the market, we also have things like V2X communications” — vehicles that talk to each other and communicate with stoplights and smart roads.  

Keeping count

TuSimple Holdings (NASDAQ: TSP), the first of the autonomous trucking software developers to go public, has a formidable advantage. Glasgow George counts 92 U.S. patents and 189 applications related to self-driving capabilities in trucking.

“That’s kind of a big foothold,” she said. “They also have partnerships with Amazon Web Services, Mobileye and Blackberry QNX. What we get from that story is that it’s not just the sensors but also the data and analytics.”

A Mobileye technologist working on autonomous software (Photo: Mobileye)

So it’s not surprising that Waymo, the Alphabet Inc.-owned subsidiary that began as the Google self-driving car project, has a bundle of patents — 374 and growing. Most of those are related to its ride-hailing service and automotive efforts rather than commercial trucking. 

But much of the technology transfers from car to truck autonomy, such as the fifth-generation WaymoDriver system being created for a Freightliner Cascadia from Daimler Trucks. Waymo Via, the trucking unit of Waymo, also is doing test runs of its software in Texas with J.B. Hunt Transport (NASDAQ: JBHT).

“We would expect Google Waymo to make acquisitions,” Glasgow George said. “That’s part of Google’s modus operandi. They are active in a space. They start commercial activities or messing around the edges. Then they acquire [a company] because they don’t have all the IP. In this case, Waymo (NASDAQ: GOOGL) has a lot of IP, but it’s not as far along commercially as it should be.”

In March 2019, Patent Forecast predicted Google would acquire sleep and activity tracking wearables maker Fitbit. Google paid $2.1 billion for Fitbit in November 2019.

3 questions

FREIGHTWAVES: Do patents surrounding autonomy suggest anything that points to mergers or acquisitions of one company or another?

Glasgow George: “Only if there ended up being standards. There’s obviously going to be a lot of regulation. I think the thing that would drive that ‘Let’s play nice and everybody share’ is going to be because of standards that make it necessary for there to be kind of that common platform.”

FREIGHTWAVES: TuSimple, Plus and Embark Trucks are either public or on a path to public trading. Waymo and Aurora Innovation have attracted billions from investors. Does this indicate that patents drive investment?

Glasgow George: “It shows investment and commitment over time. So again, we always want to look not just at the volume of patents but look at their distribution over time, as well as movement and acquisition and how they get assigned.”

FREIGHTWAVES: Do you see a winner-loser profile emerging?

Glasgow George: “You cannot count out Google because they’re just so big and can do anything they want and buy whomever they want. It’s hard to rule out early-stage innovation. It’s hard not to look at [early-stage autonomous trucking companies] with some optimism while they have fewer patents.

Gassing up naturally

The 20-year-old joint natural gas engine-making venture between Cummins Inc. and Westport Fuel Systems ends this year. Cummins will still make the 6- to 12-liter engines and maybe add a 15-liter version. Cummins (NYSE: CMI) has found a new partner to help take advantage of expected growth in compressed and renewable natural gas.

Cummins and Rush Enterprises Inc. (NASDAQ: RUSHA) this week signed a letter of intent for Cummins to acquire 50% equity in Momentum Fuel Technologies, a subsidiary of Rush Enterprises, the nation’s largest network of commercial truck dealerships. 

No price for the deal was disclosed. The new joint venture will produce Cummins-branded natural gas fuel delivery systems for commercial vehicles in North America. The deal anticipates tougher emissions regulations for truck engines coming in 2024 and 2027.

“The immediate environmental benefits of CNG and RNG, combined with upcoming regulator requirements, will drive growth in natural gas vehicles for the foreseeable future,” Rush Enterprises CEO and President W.M. “Rusty” Rush said in a press release.

Cummins worker on the line. (Photo: Cummins)

Keeping stock (and not)

Green Nikola Holdings, the subsidiary of South Korean solar panel maker Hanwha Group, is beginning to offload shares in Nikola Corp., following through on its March filing with the Securities and Exchange Commission.

Hanwha sold 2.9 million shares from its previously owned 22.13 million shares, collecting $53.67 million. It plans to sell up to 11.05 million shares in the electric truck and hydrogen fuel maker by Dec. 10.

Hanwha said in March it is still committed to Nikola’s vision. It chose a good time for the five transactions in June. The average price ranged between $18.10 and $19.43, according to an SEC filing. Shares traded at $16.42 in March when Hanwha filed its intended sale notice.

Shorting out

According to S3 Partners, Nikola  (NASDAQ: NKLA) was one of the 10 publicly traded companies with the highest short interest as of the end of June. Shorting means investors are borrowing shares and betting the price will drop. Retail investors sometimes bid up companies to squeeze the short sellers into selling their positions as a loss. It’s a frequent tactic in so-called meme stocks.

That could be part of Nikola’s rising price, but the company also has made several positive announcements pointing to production of its battery-electric Class 8 daycab and moves toward building a hydrogen fuel infrastructure. All of that will take more money than Nikola currently has. So watch for a stock and convertible debt offering this summer.

That’s it for this week. Thanks for reading. You can sign up here to receive Truck Talk in your inbox on Fridays.