BEIJING—The coronavirus has hurt many companies in China, but that’s not true for Neolix, a Beijing-based driverless delivery service, reports Bloomberg.
Anxiety about coronavirus has given Neolix an unexpected boost in business. The startup has booked orders for more than 200 autonomous vehicles in the past two months, although it had only produced 125 before that time.
The company’s small vans reduce physical contact between individuals and address labor shortages caused by quarantines and travel restrictions. The vehicles have been used to deliver medical supplies in hospitals, including in Wuhan, China; help disinfect streets and transport food to people working on the front lines to curb the spread of the virus, said Yu Enyuan, Neolix founder.
“Demand has been surging since the virus outbreak and more importantly, people’s perception toward driverless delivery had a complete 180-degree shift,” Yu said. “People realize that such vehicles can get things done when it is risky for a human being to do so.”
Three years ago, billionaire Jack Ma predicted that China would have one billion deliveries a day within a decade and that commercialization of driverless-courier technology could provide lessons for autonomous vehicles carrying passengers. Until recently there were restrictions for driverless vehicles on open roads, but during the virus outbreak, regulatory barriers are being eased because roads are empty.
“China’s digital services economy has prospered during the crisis as people shifted to online consumption,” said Bill Russo, CEO of consulting firm Automobility Ltd. “This will accelerate the commercialization of autonomous service delivery solutions. Neolix and others stand to benefit.”
Currently, local authorities in China are offering incentives—up to 60% of the tag price—to encourage purchase and operation of driverless delivery vans in their jurisdictions, according to Yu and Neolix, which expects to sell 1,000 units this year. “The industry has entered into a fast expansion phase because of the virus,” Yu said.
The development of autonomous vans is accelerating in other countries, as well. Last month, Nuro Inc., Neolix’s rival in the U.S., won the first federal safety approval for a purpose-built, self-driving vehicle, paving the way for its plans to deliver groceries autonomously in neighborhoods. The approval is valid for two years.
Some industry observers are more cautious about the near-term prospects. China’s relatively low labor costs may undermine the promotion of autonomous delivery for some time, said Cui Dongshu, secretary general of the China Passenger Car Association, who sees the current demand as temporary.
Russo thinks the current order uptick for companies like Neolix will translate into future demand as well. “New habits are formed, and new capabilities are needed,” he said. “The consumption pattern has shifted, and this will likely be viewed as an essential set of capabilities in the new normal, post-coronavirus world.”
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