Autonomous Trucking: Not Too Simple After All?

The partnership between TuSimple and Navistar to jointly develop and produce purpose-built autonomous semi-trucks by 2024 began two years ago. The agreement would help TuSimple move away from retrofitting trucks with AV sensors and tech. As part of this deal, Navistar bought a (not-disclosed) stake in TuSimple, and still remains a shareholder.

On Monday December 5th, the companies released a joint statement regarding the end of the partnership. While no detailed reasons were given for the split, recent corporate governance drama within TuSimple provides some useful context. According to news outlet Tech Crunch, someone familiar with the matter stated that the decision to end the agreement was because TuSimple “needs to get its house in order,” following an executive shakeup and several regulator investigations.

“The move to end the partnership comes less than a month after Cheng Lu returned to his role as CEO of TuSimple after previously being ousted. The return of Lu came days after the company fired his predecessor and TuSimple’s co-founder Xiaodi Hou following an internal probe that showed certain employees having ties and sharing information with Hydron, a China-backed hydrogen-powered trucking company.”

TuSimple has also been facing concurrent probes by the Securities and Exchange Commission and the Committee on Foreign Investment (CFIUS) in the US – which considered whether the investment posed a threat to U.S. national security. TuSimple has since confirmed to TechCrunch that it will divest its China operations.

It was only as recent as October that TuSimple re-iterated plans to achieve commercial viability in 2023. TuSimple will “focus on improving the safety of its autonomous driver and lowering the operating cost per mile of autonomy”, said a source with knowledge of TuSimple’s plans according to the Tech Crunch article. In the meantime, the AV company will continue to run its ongoing pilot programs with customers using a fleet of 80 retrofitted Navistar trucks.

Personal Comment:

While the corporate governance dramas and investigations by US authorities presents a very plausible explanation for why Navistar may want to back away from its partnership with TuSimple, the timing perhaps seems a bit odd. The investigation into TuSimple by the CFIUS concluded in February of this year, and the SEC probe was announced well over a month ago on October 31 – the same day that TuSimple and its board fired its former CEO and CTO Xiaodi Hou. It seems if the primary motivation for the split was public relations and damage control from Navistar’s side, then they could have taken this action much earlier.

An alternative motivation for the split could instead be related to the familiar realisation seeping through the AV industry that achieving anything above levels 2 and 3 autonomy will take much longer than previously forecasted. Even Tesla, one of the most bullish AV developers out there, managed to launch its Tesla Semi earlier this week without even once mentioning whether the vehicle would be equipped with its AV product, which it controversially labels ‘full self-driving’. If TuSimple and Navistar are indeed beginning to accept, along with the rest of the industry, that level 3 and 4 autonomy may still be many years away (rather than just around the corner), then the business case for shifting away from retrofitting semi-trucks with AV sensors and tech to producing vehicles purpose built vehicles for AVs falls apart.

However, it may be worth noting that in contrast to this move away from purpose built AV vehicles by TuSimple and Navistar, it was only last month that Waymo (the Google/Alphabet-owned autonomous taxi company) and Geely (Chinese OEM and owner of the car brands Volvo Cars, Lotus, and Polestar) announced their brand-new prototype of a “purpose-built, passenger-first autonomous vehicle”. And in another small step toward higher levels of autonomy Mercedes and Bosch just announced a level 4 parking solution, which allows for fully automated parking within particular parking garages. So, the tea leaves for the direction of the AV industry is perhaps not quite settled yet. 

Written by Bobby Chen,
RISE Mobility & System