TuSimple begins catch-up on financial filings

TuSimple filed the first of four late financial documents this week. It’s easy to see why the autonomous truck software developer gave up freight hauling. It cost more than twice as much as it was seeing in revenue. And the company has just 250 U.S. employees after two rounds of layoffs and a refocus on Asian markets.

While other startups ran afoul of Nasdaq listing rules because their share price fell below $1 for more than 30 consecutive trading days, TuSimple found another way to get put on double-secret probation (to borrow a line from the college fraternity sendup “Animal House”). It did not file quarterly and annual financial reports on time.

The company faced delisting from the exchange at the end of May. Following an appeal in June, TuSimple got a reprieve until Sept. 30 to get current or be immediately delisted.

That process began this week with TuSimple filing its third-quarter 2022 10-Q report. Now, why do we care nearly a year later what’s in that report? Because it provides some insight to events that occurred well after Sept. 30, including drama that played out beginning in October through the June 28 announcement that it might sell its U.S. operations.

Gleaning insights

Gleanings from the 10-Q explain the math behind TuSimple giving up on autonomous freight hauling. It used its own trucks for customers like UPS, while rolling up 10 million miles of supervised autonomous driving. TuSimple posted $2.66 million in revenue from July-September last year from freight hauling. It cost the company $5.43 million, meaning it lost $2.78 million in the deal.

Two rounds of layoffs — in December and May — are also covered. We learned that of the 750 remaining full-time employees, just 250 are based in the U.S. How much of a business TuSimple can operate — or sell — in the U.S. with such a hollowed-out workforce is questionable. 

Curiously, TuSimple this week announced a technology called CyberMap. It allows TuSimple trucks to provide near real-time updates to each other about roadway abnormalities on the TuSimple Autonomous Freight Network. The AFN consists of high-definition maps of thousands of miles of roadways. It hasn’t been talked about much since TuSimple sold off most of its truck fleet.

Risks to leaving the U.S. market

Risks from spinning off or selling the U.S. business are outlined in the 10-Q. One drawback described is the time it would take from executives to work on the spinoff. And that could call into question what kind of return TuSimple would realize. Until recently, it was TuSimple’s China-based operations being considered for possible sale. Now, China and Asia are focus areas.

That could have something to do with co-founder and Executive Chairman Mo Chen. His voting power allows him to largely determine the company’s  direction. Chen runs China-based autonomous fuel cell startup Hydron Inc.

TuSimple employees performed some work for Hydron and shared some information, which it self-reported to the Securities and Exchange Commission. The 10-Q said the two companies no longer have any contact,. That may help avoid a fine from the Committee on Foreign Investment in the U.S. for the previous interaction.

Is autonomous trucking development slowing down?

Truck Tech has chronicled the ongoing shakeout in driverless trucking companies. Now the question is whether we are witnessing a general slowdown in Level 4 autonomy itself.

Automotive supplier ZF, for one, thinks so.

“I think the market and ZF in general would agree that AD (autonomous driving) progression has certainly slowed a bit from the pace everyone projected a couple years ago,” Shaun Twomey, director, Americas strategy and market and sales, Commercial Vehicle Solutions, ZF Group, told me in an email.

Remember the prediction that autonomous cars in significant numbers would be on the road by 2020. Well, that didn’t happen.

“The interest is still there, but a couple years later the industry is smarter and more sober about what it takes to get to something like L4.”

ZF points to the investment — billions have been spent in recent years on both the passenger and commercial vehicle segments to advance driverless operation. With regulation driving the adoption of electric trucks, money is flowing there, possibly impacting resources for autonomous vehicles.

“It can be challenging for certain other suppliers and OEMs to throw a lot of money and resources at both electrification and AD [autonomous driving] simultaneously,” Twomey said. “Plus, when you consider that electrification has many more regulatory carrots and sticks at the moment which encourage investment, I think that also partially explains why the market has pulled back a bit in the past few years on AD adoption projections.”

Is Kodiak Robotics becoming a defense contractor?

Kodiak Robotics is cheering the U.S. House for including language in the 2024 fiscal year defense budget that supports contracting with commercial technology developers to develop dual-use software for the Army’s Robotic Combat Vehicle (RCV) program.

Kodiak got its taste of this with a $49.9 million contract  from the Defense Innovation Unit in December to adapt its autonomy system for Army reconnaissance vehicles through the RCV program.

The Defense Authorization Act recommends “a massive budget increase” for the DIU, suggesting that more dual-use technologies are in the offing, according to a Kodiak news release.

Applied Intuition Inc., which recently acquired Embark Trucks; Neya Systems; Robotic Research Autonomous Industries (RRAI); Scale AI; and Kodiak were selected as vendors for the Ground Vehicle Autonomous Pathways project. It will prototype software for navigation of uncrewed vehicles by fusing data from multiple sensors and allow teleoperations of unmanned ground vehicles.

“Kodiak continues to innovate to bring autonomous capabilities to American roadways as well as the U.S military and is excited about the incredible progress we’ve made in adapting our technology to off-road environments,” Kodiak CEO Don Burnette said.

The Mountain View, California-based startup in April 2021 received a Small Business Innovation Research contract to develop autonomous vehicles for the Dover Air Force Base flight line.

So far, Kodiak claims to be alone among autonomous trucking software developers to demonstrate both off-road and highway autonomy capabilities. RRAI is working on truck-based autonomy for military applications.

Briefly noted …

Nikola is selling its hydrogen hub in Buckeye, Arizona, to partner Fortescue Future Industries for $24 million, another play to bring in cash to build hydrogen fuel cell-power Class 8 trucks..

Electric trailers from Range Energy now qualify for up to an $80,000 incentive from the California Air Resources Board Clean Off-Road Equipment Voucher Program.

Lion Electric is selling debt at up to 13% interest to raise $142 million in new capital to keep its electric truck and bus business going. The details are complicated.

Penske Logistics Is the first third-party logistics provider to successfully pair a ConMet Mobility nMotion TR 160-45-equipped reefer trailer with a Freightliner eCascadia electric truck.

That’s it for this week. Thanks for reading. Click here to get Truck Tech via email on Fridays. And tune in to Truck Tech on FreightWavesTV on Wednesdays at 4 p.m. EDT and later on YouTube.

Next week’s scheduled guests are Don Burnette, CEO of Kodiak Robotics, and Brett Suma, CEO of Loadsmith. The digital freight broker is ordering up to 800 autonomous trucking systems from Kodiak by late 2025. We’ll discuss how the deal came together and what it means for the commercialization of autonomous trucking.

The post TuSimple begins catch-up on financial filings appeared first on FreightWaves.

Source: freightwaves - TuSimple begins catch-up on financial filings
Editor: Alan Adler