Hatchworks has conducted due diligence on TuSimple, a self-driving technology company founded in 2015 and headquartered in San Diego, US, making it possible for long-haul heavy-duty trucks to operate autonomously on both highways and streets. So far, TuSimple achieved unicorn status in 2019 with a $1.2B valuation and has raised a total amount of $300 million from an impressive group of investors, which include UPS, NVIDIA and SINA Corporation, among others.
TuSimple is developing a Level 4 system, a designation by the Society of Automotive Engineers (SAE) that means the vehicle takes over all the driving in certain conditions. They believe that the autonomous driving technologies will make roads safer, more efficient and result in savings for both fleets and shippers.
The Vehicle Autonomy consists of 6 levels, namely:
- Level 0: No Automation. Most vehicle’s today are level 0 as they’re manually controlled.
- Level 1: Lowest level of automation. This refers to cruise control, for example, which has become a standard feature on many cars for maintaining a set speed or driving in traffic jams whilst keeping the car at a safe distance from others.
- Level 2: Partial Automation. Here, the vehicle can control both steering and accelerating/decelerating.
- Level 3: Conditional Automation. The care can make informed decisions for themselves, such as accelerating past a slow-moving vehicle. They still require human override.
- Level 4: High Automation. These cars do not require human interaction in most circumstances. Vehicles can operate in self-driving mode, but until legislation and infrastructure evolves, they can only do so within a limited area. Still human override is an option.
- Level 5: Full Automation. This is the highest level that a vehicle can get. Here, cars won’t even have steering wheels or acceleration/braking pedals. The cars can go anywhere and do anything that an experienced human driver can do. No human interaction is required.
To date, much of the autonomous vehicle tech industry has focused on LiDAR, which measures the distance to a target by illuminating the target with laser light and measuring the reflected light with a sensor. However, LiDAR has its limitations, at it causes some issues for trucks driving on highways at speeds of 55 miles per hour. Also, it’s worth noting that LiDAR can detect objects like cars to about 250 meters, whereas the optimal quality struggles past 150 meters. TuSimple uses LiDAR, but only for its mapping and some data collection.
TuSimple has developed an Artificial Intelligence (AI) camera-based system to dramatically improve safety by allowing the truck to see up to 1,000 meters away, locate objects at night and bring massive amounts of data to simulate. This is a huge key-benefit relative to its peers and could be a game changer in the upcoming AV truck market. Eventually TuSimple’s technology could reduce logistics costs by around 30%–40%. Besides that, TuSimple claims that it already generates commercial revenues and that it has 12 contracted customers, including some Fortune 100 companies.
Currently, there is a backup driver and a system engineer in every truck for testing and safety purposes. However, at the end, the trucks will operate without any human drivers at all. According to Chief Financial Officer Cheng, their goal is to have a factory-produced (self-driving) truck by the 2023 time frame. Until then the company will remain its service like it’s doing now with the aim to expand the service in the US, using retrofitted trucks.
Compared to some of its peers, TuSimple has some several key advantages:
- Its focused strategy on Level 4 (L4) trucking logistics has enabled it to progress rapidly to become one of the first commercial players.
- Its presence in both the US and China will allow it to penetrate the two biggest markets in the world simultaneously.
- TuSimple is also very well-funded by investors in both China and the US. This allows it to keep improving R&D and to develop sustainable technological advantages.
For now Hatchworks’ stance is an information brief and Hatchworks does not hold a position in TuSimple. However, Hatchworks will keep TuSimple on its radar.
What is TuSimple?
TuSimple is a a self-driving technology company founded in 2015, focusing on developing a level 4 autonomous truck, making it possible for long-haul heavy-duty trucks to operate autonomously on both highways and surface streets.
- CDH Investments.
- Lavender Hill Capital.
- Mando Corp.
- UPS Ventures.
- Sina Corp.
- Nvidia Corp.
Advisors and Bookrunners:
- Sina Corp.
What are the risks?
- Serious accidents or concerns by the public in the early stages of “driver out” operations may cause the regulators to “ground” the fleet and could affect Tusimple’s business.
- Public acceptance and regulations are also potential barriers, In the US, only 24 states have passed legislation permitting autonomous driving technology while in China, open-road testing of autonomous vehicles is only allowed in Beijing and Shanghai.
- Offering a cost-effective service is also a major challenge. Even if the technology is ready, then it still should have a lower cost than the human-driver in order to create much more demand.
- Starsky Robotics.
- Xiaodi Hou: Founder, president, and CTO.
- Chuck Price: CPO.
- Cheng Lu: CFO.
The Hatchworks Team
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