China's TuSimple wins backing from US truck maker

TuSimple, which was established in 2015 by California Institute of Technology graduate Xiaodi Hou, has raised more than $285 million from PE and VC investors. It achieved a valuation in excess of $1 billion with the completion of the first tranche of its Series D round in February 2019. A second tranche of $120 million, which featured CDH Investments among others, closed last September.

TuSimple claims to be the only self-driving truck company capable of driving on highways and surface streets without human intervention. It obtained an autonomous vehicle testing permit from the state of California in 2017 and then completed level four (L4) autonomous driving tests – which means the car is fully self-driving in certain environments, but it still needs a driver in the seat – between California and Arizona. It wants to demonstrate completely driverless operations in 2021.

The company now has a fleet of 40 trucks operates commercial routes covering Arizona, New Mexico and Texas, with ambitions to expand nationwide by 2023. On closing the first tranche of the Series D, TuSimple said it wanted to pursue joint programs with original equipment manufacturers (OEM) and other technology developers. Full commercial operation of self-driving trucks is dependent on software being integrated with powertrain, braking and steering systems.

Having established a technical relationship with Navistar two years ago, it will work with the company on a line of L4 self-driving trucks targeted for production by 2024. Navistar manufactures trucks with proprietary diesel engines, buses, and military vehicles. Revenue came to $11.3 billion in 2019 while net profit reached $221 million.

"Autonomous technology is entering our industry and will have a profound impact on our customers' businesses," said Persio Lisboa, president and CEO of Navistar, in a statement. "Navistar's strategic partnership with TuSimple positions us to be a leader in developing solutions for our customers by leveraging our organizations' collective expertise to integrate our vehicle design and systems integration capabilities with TuSimple's innovative autonomous technology.”

Navistar is not the first strategic investor to take an equity interest in TuSimple as part of a wider partnership. UPS is a participant in the Series D round and launched a pilot project with the company moving daily revenue-generating loads in Arizona. Earlier this month, TuSimple announced plans for an autonomous freight network with UPS, US Xpress, Penske Truck Leasing, and food services business McLane.

In China, TuSimple was among the first batch of companies selected to run AI-enabled transportation pilot tests in Shanghai. It has agreed to work with Lingang New City, an urban development in Pudong New Area that forms part of the Shanghai Free Trade Zone, on a large-scale commercial demonstration project involving unmanned trucks.

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