October 24, 2018 - Chinese artificial intelligence (AI) start-up TuSimple has deployed autonomous trucks on commercial runs between Tucson and Phoenix in Arizona and Las Vegas, Nevada, as the company prepares to expand its operations in the world’s two largest economies by next year.
That trial programme in the US, where its two trucks transport consumer goods at speeds of up to 104.6 kilometers per hour (65mph) on their routes, is generating about US$6,600 a week in revenue and given TuSimple a toehold in the vast US freight market, said Chen Mo, the company’s co-founder and chief executive.
“Scaling up our operations boils down to two factors – capital and talent,” Chen said in an interview at TuSimple’s headquarters in Beijing. The company has its US headquarters in San Diego, California.
Chen said TuSimple, which has more than 450 employees in China and the US, plans to gradually expand its autonomous truck fleet to a total of 500 units between the two markets, which would enable it to generate about 100 million yuan (US$14.4 million) in revenue from next year.
The company, which has generated US$83 million in funding since it was founded in 2015, is now working on a new round of financing, the amount of which it has not disclosed. Chen said the company was currently burning about US$4 million a month in capital in the US and China.
TuSimple’s expansion plans underscore China’s efforts to gain leadership in developing next-generation vehicles with autonomous driving technology. Various Chinese hi-tech firms are looking to develop so-called level-four autonomous driving trucks and cars. That means these vehicles should be able to slow down, pull over or park at a safe spot if a human driver does not take control when requested, according to industry guidelines set by the Society of Automotive Engineers.
The start-up’s initiatives in the US have come at a sensitive period because of the trade war between China and the US. The current climate has heightened Washington’s security concerns over Chinese hi-tech companies doing business in the US, blocking major suppliers like Huawei Technologies and ZTE Corp from selling their main products to US entities.
TuSimple’s Chen, however, sees plenty of opportunity in the US, “where logistics costs are more expensive and there is a shortage of truck drivers of as much as 200,000”.
“If we succeed, about 15 million truck drivers in China and the US will be initially freed from their strenuous and dangerous work,” he said. “We hope more investors can have faith that it’s going to happen in the coming decade; that more gifted graduates can choose to work on autonomous driving as their calling; and that more universities will take part in training such talent.”
The TuSimple chief executive acknowledged that several players are expected to coexist in a vast industry like transport and logistics, which represents an indispensable part of daily life.
“China and the US are home to over 10 million heavy lorries, so even having 1 percent share of the market would mean 100,000 autonomous trucks,” he said. He declined to identify TuSimple’s US customers because of concerns with their labor force.
With backing from investors led by Chinese technology firm Sina Corp and US semiconductor company Nvidia, TuSimple is competing head-on against other start-ups as well as deep-pocketed rivals like Tesla and Alphabet’s Waymo in developing level-four autonomous trucks for the transport and logistics industry.
In March, Waymo rolled out a pilot programme in Atlanta in which autonomous trucks would carry freight bound for Google’s data centers; others are being tested on open roads in California and Arizona. Traditional carmakers like Volvo and Mercedes-Benz have also unveiled their versions of self-driving trucks the past year.
Ride-hailing giant Uber Technologies decided to wind down its self-driving truck unit in July, two years after it acquired self-driving start-up Otto for US$680 million, to focus exclusively on autonomous cars.
Chen said China was still playing catch-up with the US, which is widely acknowledged as having a head start in attracting investments and developing regulations for autonomous vehicles. Last week, TuSimple was issued the first license in China for conducting open-road tests of autonomous trucks in Shanghai.
Before getting that green light for testing, TuSimple operated an unstaffed logistics service at a port in northern China, which allowed it to test its self-driving trucks by transporting containers within the port.
Operating in closed areas, however, makes for slow progress in the development of autonomous trucks, said Chen. “Open-road tests can help us gather and pick up more information at a much faster pace,” he said.
“It will still take the country at least two years to catch up with the US” in terms of regulations for autonomous cars and trucks, Chen said. “But I believe Chinese authorities tend to have a slow start.”
“It’s a bit cliché to talk about how TuSimple is going to change the world, but we always mention that anyway,” he said. “What’s important is that everyone in the company gets reasonable rewards and a share of the future business.”
Source: South China Morning Post