Robert Falck on Electrifying Autonomous Trucking | Einride

Robert Falck: From Trucking Factories to Autonomous Freight

Robert Falck’s background is remarkably diverse. He previously worked in a Russian trucking factory while simultaneously developing a nightclub guest list startup. A collector of antique books, he even predicted Gao Xingjian would win the Nobel Prize in Literature. Despite growing up on a farm, Falck holds degrees in finance, economics, and mechanical engineering.

A Vendetta Against Carbon Emissions

This unique blend of experiences fuels a determined entrepreneur with a strong opposition to the carbon footprint of the global trucking industry. Falck, currently the CEO and founder of Swedish autonomous freight company Einride, previously served as the director of manufacturing engineering assembly at Volvo GTO Powertrain.

During his three-and-a-half years at Volvo, he gained invaluable insight into the mass production of heavy-duty vehicles. He also actively participated in launching and investing in other ventures. Einride, established in 2016, represents his seventh entrepreneurial undertaking.

Einride’s Three-Pronged Approach

Einride’s business model is built on three core pillars. The company operates one of Europe’s largest fleets of electric trucks. However, its primary focus lies in its electric autonomous pods – self-driving freight vehicles designed without a traditional front cab or space for a human driver.

Furthermore, Einride offers Saga, an IoT system integrated throughout its fleet. This system assists both the company and its shipping partners in optimizing routes, managing fleets, and facilitating the transition to electric vehicles.

U.S. Expansion and Funding

Einride initiated its U.S. operations this month, collaborating with partners such as GE Appliances, Bridgestone, and Oatly to deploy its pods, trucks, and operating system. A recent $110 million funding round in May brought the company’s total funding to $150 million, supporting its U.S. expansion plans.

The Drive for Sustainable Transportation

A recent interview with Falck explored Einride’s revenue scaling strategy, the necessity of building autonomous vehicles on electric platforms, and the belief that startups hold the key to the future of transportation.

The Moral Obligation and the CO2 Challenge

TechCrunch: Your background includes work at Volvo, nightclub platforms, and a hunting app. What prompted you to start an autonomous trucking company?

Robert Falck: My experience at Volvo, specifically producing diesel engines, gearboxes, and trucks, revealed the significant challenges facing the industry and instilled in me a sense of moral responsibility. The heavy freight transport sector accounts for 7% to 8% of global CO2 emissions, with the engines I helped create contributing roughly 1% alone.

Starting a company isn’t necessarily logical; it requires either a degree of audacity or a disregard for financial gain. However, I view CO2 emissions as our generation’s most pressing challenge. It’s remarkable how secondary concerns fade into insignificance when driven by a strong purpose.

Long-Term Vision and Entrepreneurial Spirit

You’ve been described as a serial entrepreneur. Are you committed to Einride for the long haul, or are you already contemplating your next venture?

I believe all entrepreneurs thrive on the entrepreneurial process. I identify more as a company builder and innovator than as an administrator or manager. Maintaining the status quo doesn’t appeal to me.

Will your next startup address CO2 emissions in a different sector?

Many traditional industries are ripe for disruption, which will fundamentally reshape society. There’s a growing global demand for sustainability. I anticipate that most companies that will either transform or safeguard the planet will emerge within the next five to ten years.

Significant opportunities exist within established sectors like trucking, automotive, and real estate. Furthermore, energy – particularly smart grids and energy production – presents another promising area for innovation.

Startups vs. Legacy Companies in Climate Tech

Do you believe most climate tech solutions will originate from startups rather than established corporations?

Large companies like Siemens and ABB, with their established infrastructure for electricity, will likely succeed regardless. However, we shouldn’t underestimate the difficulties inherent in change for existing industries. An average OEM would need to absorb six to seven years of lost profits to eliminate legacy investments in diesel platforms.

Presenting such a proposition to a CEO is challenging. It involves sacrificing short-term gains for long-term technological development, potentially restructuring the workforce, and adapting to a new ecosystem.

Many CEOs are nearing retirement and may prioritize personal pursuits over revolutionary change. Would they dedicate their final years to transforming the world, or simply enjoy their well-deserved retirement?

Rivian’s IPO and the Shift in Valuation

Do you think the inflated valuation of Rivian’s IPO was justified, especially when compared to Ford and GM?

Surprisingly, it actually makes a certain amount of sense. The world is increasingly functioning like a venture capital firm. Given the inevitability of electrification, and the limited substantial electric investments among existing automotive companies – with Tesla being the notable exception – the market reaction is understandable.

Do you believe Ford’s $30 billion investment in electrification is sufficient?

It’s still approximately a decade away from significant impact. Consider the sales volumes; electric vehicle sales remain minimal. I estimate Ford will require at least five years of write-offs to fully transition from diesel.

Roughly 25% of Ford’s workforce is involved in diesel or drivetrain/engine production. Reskilling or replacing these employees will be necessary, as their expertise will become obsolete. This transition will be complex.

Betting on Innovation: Rivian and Beyond

Some argue that even if Ford is ten years behind, Rivian hasn’t yet achieved mass production, making it a risky investment. What are your thoughts?

If Rivian succeeds, the potential upside is tenfold. However, the risk of a tenfold loss is equally present. It’s a volatile investment. The stock’s volatility will be intriguing to observe.

I believe Tesla’s continued success is largely attributable to Elon Musk. Despite criticism, his ability to guide, disrupt, and innovate has created a lasting legacy. Tesla’s journey to its current position is truly remarkable.

Tesla’s Strategy and Vertical Integration

What aspects of Tesla’s strategy inspire you?

Tesla dared to challenge the entire ecosystem. They recognized early on the need for vertical integration to avoid excessive dependence on others. A comprehensive understanding of the ecosystem is crucial for disruptive change.

This approach, exemplified by their gigafactories and charging infrastructure, demonstrates a commitment to creating the necessary conditions for success.

We’ve adopted a similar strategy at Einride, but with a different approach. As with any company, we’re either geniuses or the latest to declare bankruptcy.

I see the entrepreneur’s role as showcasing the future and visualizing potential achievements. It’s then up to society and customers to decide if this vision aligns with the future they desire. That’s what truly motivates me.

Einride’s Unique Vertical Integration

Einride doesn’t manufacture its own trucks or batteries. How does it achieve vertical integration?

We’re vertically integrating the transport service market, not the hardware itself. We’re connecting shippers, charging infrastructure, hardware, and the transport service into a unified system.

We’re vertically integrating the entire ecosystem to provide a holistic technological solution, similar to how Uber revolutionized the taxi industry.

The Future of Autonomous Vehicles and Electric Platforms

Designing an AV to operate without a safety driver challenges industry norms, but won’t it complicate testing due to regulations?

Yes, but removing the safety driver is essential to realizing the full business benefits. It may take longer, but by developing the system from the outset with a remote driver and autonomous system, we’re reaching our end state faster than others.

Even achieving 95% of the business case makes us the most profitable solution. We don’t have to wait for the mythical “Level 5” autonomy, as it’s unlikely to ever materialize.

You’ve expressed skepticism about Level 5 autonomy. Can you elaborate?

No human driver can achieve Level 5. Consider this: would you drive at the same speed in a blizzard as on a sunny day? Of course not. We’ve applied this principle to our system.

Our “degenerative system” operates in layers. Functionality increases as criteria are met, and decreases in adverse conditions like sensor malfunctions or blizzards.

Instead of aiming for perfection, we prioritize secure all-functionality and uptime in simpler use cases. We’re focusing on applications where autonomous technology can be effectively deployed today, rather than waiting for an unattainable future.

The “Toddler Approach” to Autonomy

That’s a “learn to crawl before you can walk” approach.

The alternative is spending billions annually for a decade and still having a pre-product.

A key driver for me is that widespread adoption of autonomous vehicles on diesel platforms will lead to a significant increase in CO2 emissions. Electric is a crucial prerequisite for this transition, as autonomous electric transport is cheaper than autonomous diesel.

I hope the entire industry will embrace this responsibility and utilize this technology to create sustainable transportation.

Addressing Concerns and Scaling in the U.S.

Some argue that the computing power required for AVs drains battery life. What’s your response?

I believe that’s making excuses. In Sweden, we have a concept that doesn’t translate well: “The arts of engineering.” Engineering was once considered an art form, exemplified by Leonardo da Vinci. The idea was to utilize science and art to improve the world.

I believe that autonomous and electric vehicles are inherently better, but we shouldn’t use technology to lock ourselves into a system that threatens humanity.

Einride has $150 million in funding. How much more is needed to scale in the U.S.?

We’re scaling profitable installations, meaning we achieve a small margin on each contract. We’ve successfully implemented this approach in Europe and plan to replicate it in the U.S.

It’s a competitive race, but we stand out because we’re scaling to generate revenue, not to develop technology. We’re scaling with clients and customers who are already benefiting from our solutions.

Current Fleet Size and Future Plans

How many trucks and pods are currently in operation?

We keep that number confidential. However, we expect to reach 500 vehicles by the end of 2022.

How are you able to produce that many vehicles with your current funding?

We collaborate with manufacturing partners and secure transport service contracts with our clients. Our strong customer base allows us to scale alongside them.

You plan to establish your U.S. headquarters in New York and additional offices. Are there any other plans you can share?

We’ll establish a small-volume production and testing site in the New York or Washington, D.C. area on the East Coast. Proximity to the home market is crucial, and this will be a significant investment.

The Rise of SaaS in Automotive

Automakers are increasingly developing and selling their own software, like Saga, Rivian’s FleetOS, and Ford Pro. Do you anticipate this SaaS trend continuing?

Electrification increases the importance of software. The electric components themselves are relatively simple, but managing and operating the system becomes more complex as you scale.

Therefore, software components become critical. This trend mirrors the evolution of computers, where hardware platforms have become standardized while software continues to evolve.

Einride’s Vision for the Future

Where do you see Einride in one year?

We’ll have achieved 500 installations and secured further funding. We’ll also be expanding into new markets beyond the U.S.

In five years, we aim to be the game-changer in the industry – the first to deploy autonomous electric transport vehicles on a large scale.