Driverless Trucking Firm Eyeing US Exit
TuSimple’s experiment in the U.S. may be nearing its end.
A month after going back on its decision to sell its Asia-Pacific business, the autonomous trucking technology provider is exploring strategic alternatives for its U.S. operation including a potential sale.
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If it offloads the U.S. business, TuSimple says it will focus on the Asia-Pacific region and other major global markets. The U.S. and Asia-Pacific businesses operate with separate engineering teams, software code base and infrastructure.
The beleaguered trucking software, which is on the verge of being delisted from the Nasdaq stock exchange for failing to file multiple quarterly earnings reports in time, underwent two rounds of layoffs over a six-month stretch that gutted nearly half its headcount.
The writing might have been on the wall for the stateside operation as the layoffs transpired. Both cuts only impacted U.S. employees. By the time they were over, only 220 of the 750 remaining employees worked in the U.S. business.
Founded in 2015, TuSimple wanted to disrupt the global truck freight industry through the company’s autonomous software, which uses various sensors to see and interpret objects from more than half a mile away. The company said its tech can reduce fuel consumption by 10 percent or more relative to manually driven trucks.
While TuSimple has been battered since filing its IPO in March 2021, the company was the first of the autonomous trucking software firms to successfully complete multiple fully driverless tests on open public roads in the U.S. when it completed an 80-mile run through Arizona on Interstate 10 in December that year.
The company has completed multiple driverless runs in China as well, most recently finishing its first test on a public road in the country with a 39-mile run earlier this month.
And the trucking tech firm also started testing self-driving vehicles on an expressway in Japan.
Unfortunately, a U.S. exit would likely force the company to abandon other projects, like its ambition to commercialize its technology within the “Texas triangle,” a major freight area between Dallas, San Antonio and Houston. While the company had previously announced plans to begin a commercial route on Interstate 10 in late 2024, those ambitions appear to be in limbo.
TuSimple’s story isn’t a unique one, as the autonomous trucking technology sector has dealt with a combination of heavy regulatory scrutiny and limited cash flow.
Embark Technology, which had also been evaluating strategic alternatives after laying off 70 percent of its staff in March, went private in a $71 million all-cash merger with Applied Intuition Inc. and no longer trades on the Nasdaq. While Applied is integrating the company’s technology, data and software assets, Embark retired its fleet of 24 trucks as part of the deal.
Argo AI, another autonomous vehicle technology company that had Ford and Volkswagen as major investors, disbanded in October last year.
TuSimple has positioned itself as a U.S.-based company, with headquarters in San Diego, Calif. and an R&D center in Tucson, Ariz., but it has subsidiaries in China, Hong Kong and Japan, according to regulatory filings. CEO Cheng Lu revealed to TechCrunch that the company would likely relocate its headquarters from to another global hub, like Singapore. The goal is not to be a full Chinese company, but rather a global one with operations in APAC and Europe, Lu said.
The Committee on Foreign Investment in the United States (CFIUS) had its eye on the company when it first went public because of its ties with investors from China. The agency initially looked into TuSimple’s then-largest private shareholder, China-based Sina Corp, which owned 20 percent of the company. When the probe wrapped up in 2022, that number dwindled to 5.6 percent.
CFIUS had been one of three federal agencies, including the FBI and the Securities and Exchange Commission (SEC), which also investigated TuSimple for its connections to China-backed hydrogen-powered trucking company Hydron.
The investigation led to the board’s termination of CEO Xiaodi Hou, who was also removed as company chairman. The CFIUS probe found that employees spent paid hours working on matters for Hydron, which TuSimple believed to have “significant operations” in China.
