(CapitalWatch, Nov. 5, New York) TuSimple Holdings Inc. (Nasdaq: TSP) prepares to put a truck on the road without a driver and even a human safety operator, and this may happen before the year-end.
As it released its third-quarter results this week, TuSimple – a U.S. startup with Chinese roots – said it is eyeing a significant milestone in the fourth. "The initial driver runs" are expected to take place on the 80-mile route between Phoenix and Tucson by the year-end, with "the pro pilot program" to be completed "over the coming months," according to CEO Cheng Lu.
Lu said during the call, "The driver-out pilot will consist of multiple runs performed over multiple weeks and is a major part of ongoing technology development across many dimensions, including software, hardware and go-to-market. What makes the driver-out pilot program so challenging is that we're solving for both known and unknown factors that we might encounter on public roads. This includes noncompliant motors, unplanned road construction and changing driving conditions, all of which must be continuously monitored and accounted for in real time."
If all goes well, TuSimple will jump ahead of some rivals racing to the autonomous truck finish line. Already, TuSimple became the first to become publicly traded, with Embark Trucks Inc. expected to list any day in a deal with special purpose acquisition corporation Northern Genesis Acquisition Corp. II (NYSE: NGAB). Embark plans its pilot program for 2023.
A few other rivals, including Kodiak Robotics, Waymo Via, and Sweden's Einride are doing limited testing in the U.S., either on closed roads or using human assistance, as reported by Techcrunch. There are other developers, of course. Tesla (Nasdaq: TSLA) was recently seen building its first Megacharger in Nevada for its Semi, and The Wall Street Journal just ran a story on Waabi launched by Uber's (NYSE: UBER) former head of research and development and chief scientist, Raquel Urtasun.
But while these innovators have the weight of bigger names on their side, TuSimple is taking the lighter and quicker approach. In the short-term, it said it will freeze its technology development and focus on systems safety and operations safety as it prepares its major push that's 80-mile long.
Over the past five days, TuSimple saw its stock briefly reach over $40 a share before settling at $37.68 per share on Friday afternoon. Since its IPO in April, TSP stock is down 5%. Its all-time high was a $79.84 and the low was $27.24 per share.
Despite the nearing milestone of the pilot run and some attractive new developments like mapping new freight lanes with its backer United Parcel Service (NYSE: UPS), there are setbacks.
In the call with analysts, Cheng Lu said the near-term issues were "disruption to supply chain, labor shortage, and just everyone being generally very busy" and the long-term issue was "the supply chain maturity." He also compared the problem of getting capital before getting orders to the question of "chicken and egg." Lu added that over the next quarters, the company will invest more in the supply chain.
With $1.4 billion in cash and cash equivalents, TuSimple had $55 million in liabilities as of September 2021, managed to reduce by 37% from last December. Revenue in the nine months through September was $4.2 million and net loss quadrupled year-over-year to $617.2 million, or $4.08 per share.
In its third quarter filing, TuSimple also mentioned risks related to the new data protection laws. With operations in the United States, Sweden, and China, the company is affected by those countries' regulations. China in particular recently tightened its user data protection laws and increased oversight of overseas data transfer, and some of these laws especially targeted EV companies. Thus, Tesla had to localize its R&D and data storage in Shanghai, where the company operates a Gigafactory and has been ramping up production.