Ocado invests in autonomous vehicle company

Date : 20 April 2021

Rachel Sibson

Retail Analyst

Ocado has announced it is investing £10m in autonomous vehicle software from Oxbotica.

Autonomous driving software

Oxbotica was founded in 2014 by two Oxford University professors. The autonomous driving software company was the first in the UK to test self-driving vehicles in public. Ocado first partnered with Oxbotica in 2017, conducting a two-week trial using an early prototype delivery vehicle doing autonomous deliveries in Greenwich, London.

Integrating autonomous vehicles into Ocado Smart Platform

Ocado said the £10m investment “starts a multi-year collaboration, enhancing and integrating Oxbotica’s autonomous mobility software solutions to a variety of vehicles that could be used within online grocery”.

Ocado also said it aims to integrate autonomous vehicles into the Ocado Smart Platform (OSP). This would provide partnering retailers with an end-to-end integrated service and a last mile solution for fast and efficient home deliveries. The ambition is to reduce the costs of last-mile delivery as well as other logistics operations.

As part of the partnership, Ocado will outfit some of its delivery vans and warehouse vehicles with data capture capabilities. This will include video cameras, radar, and other sensing devices. Oxbotica can then use this data to train and test its technologies to determine what opportunities exist.

These autonomous vehicles range from vehicles operating inside Ocado’s Customer Fulfilment Centres (CFCs) and the outside areas surrounding them, to last-mile deliveries and kerb-to-kitchen robots. According to Ocado, early prototypes will be ready within two years.

Investment in autonomous driving

Last mile delivery represents a significant proportion of overall costs for a retailer, and self-driving vehicles could be used to significantly reduce fulfilment costs.

In addition to Ocado investing in Oxbotica, in 2020, Amazon announced it signed an agreement to acquire California-based autonomous driving startup, Zoox. Zoox launched in 2014 with the aim of developing zero-emissions vehicles designed for autonomous ride-hailing.

This also follows the news this week that Walmart has participated in the latest funding round for Cruise, a self-driving, electric vehicle startup. Walmart’s investment in Cruise supports its efforts in developing a low-cost last-mile delivery ecosystem. It demonstrates its commitment to bring the benefit of self-driving vehicles to its customers and business.

Looking for more insight on Ocado?

Our article, Where next for the Ocado Smart Platform?, highlights three ways in which Ocado will stay ahead of the competition.

Subscribers can read our  Ocado Strategic Outlook report here, which answers the following key questions along with implications for your business:

  • How will Ocado Retail maintain its growth?
  • What’s the impact of the planned new capacity in the UK?
  • Why is the Ocado Smart Platform launching in these markets?
  • How efficient is the Smart Platform?
  • Can the Smart Platform stay ahead of the competition?

Subscribers can also read our report on Online profitability: automated fulfilment centres for a summary of Ocado’s robotic automated fulfilment centres and their strengths and weaknesses.