TuSimple co-founder and CEO Xiaodi Hou on Tuesday responded to concerns from financial analysts on potential repercussions of a safety investigation following an April 6 crash involving one of its driverless trucks.
“This was an incident with a correctable flaw, not a material change to our business model,” Hou asserted during the company’s second-quarter analyst call. “As the CEO of TuSimple, I take responsibility for it.”
The accident and resulting potential safety setback for autonomous trucks were detailed in the Wall Street Journal on Monday. The Journal noted the accident, made public by the National Highway Traffic Safety Administration in June, is under investigation by NHTSA and the Federal Motor Carrier Safety Administration.
Hou said the accident was caused when a test driver and safety engineer “tried to reenter autonomous driving mode before the system’s computer was primed to do so.” This forced the truck to swerve and hit a highway barrier, Hou said. “No one was hurt, and the only evidence of the accident were a few scrapes and some minor damages on our truck.”
Following the crash, San Diego-based TuSimple (NASDAQ: TSP) grounded its entire fleet and began an independent investigation, according to Hou. Despite some claims in the Journal article that the company’s technology is to blame, Hou insisted it was caused by human error.
“Neither the FMCSA nor NHTSA has asked us to make any changes, and as part of our own review process we upgraded all of our systems to prevent this type of thing from happening again,” Hou said.
The accident and ongoing investigation will not affect the timeline for commercializing its “driver out” technology, Hou said, modifications to which were announced during the company’s first-quarter analyst call in May. The company stated the path to commercialization by the end of 2023 includes:
- Day and night operations.
- Additional driver out routes, including in Texas.
- Removing support vehicles.
- Hauling customer freight on driverless runs.
- Significant reductions in cost per mile, with clear line of sight to cost parity with human-driven trucks.
“As we prepare for driver out operations, we will continue to do so in a measured manner as we aim to strike a balance between hitting our technology milestones and prudent spending, which is reflected in our updated guidance,” the company reported Tuesday.
Updated guidance for the full year of 2022 includes approximately $950 million of ending cash on Dec. 31 versus previous guidance of about $900 million and an adjusted EBITDA loss of $360 million to $380 million versus previous guidance of $400 million to $420 million.
TuSimple Q2 highlights
Highlights for the quarter included:
- Total revenue of $2.6 million, up 73% year over year and 13% sequentially.
- Loss from operations of $110.7 million, adjusted EBITDA of $82.7 million.
- Cash balance of approximately $1.16 billion at end of the quarter, a decline of $81 million versus Q1.
- Road miles increased 13% to 8.1 million, up from 7.2 million miles in the first quarter.
- A partnership with European logistics company Hegelmann Group, including an initial reservation of purpose-built Level 4 (highly autonomous) trucks for operation in North America.
- Ten reservations added for its purpose-built autonomous trucks, bringing the total to 7,485 reservations as of June 30.
TuSimple also announced that Thomas Jensen, who recently served as a lobbyist for UPS, will lead the company’s government affairs group to bolster its federal and state advocacy efforts.
