TuSimple will continue its drive to Asia-Pacific in wake of autonomous truck firm's decision to delist from Nasdaq

Autonomous truck company TuSimple Holdings will continue to pivot to the Asia-Pacific (APAC) region for better commercial opportunities and in line with its plan to delist from the Nasdaq exchange, said chief executive officer Lu Cheng.

TuSimple is shifting its focus to APAC, including China, Japan and Australia, where regulatory support and a strong supply chain can help the firm's commercial goals, Lu said in a Friday interview, as the self-driving industry continues to push for profitability.

"For autonomous trucks, we have to integrate the advanced software capabilities - the virtual driver - with reliable and scalable hardware that includes the truck itself, Tier-1 components coupled with the right use case," Lu said. "That's one of the benefits of focusing our business more on APAC because of the maturity of the hardware supply chain."

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

The company started test runs of Level 4 autonomous trucks in Japan last year, and conducted full autonomous runs - without a human in the truck - on public roads in Shanghai. Level 4 is considered to be fully autonomous driving, although a human driver can still request control, and the car still has a cockpit.

San Diego, California-based TuSimple, which carried out an initial public offering (IPO) in 2021, announced its plan to voluntarily delist from Nasdaq on Wednesday, with its last trading day on the exchange expected to be around February 7.

The company cited changes in the capital markets for "pre-commercialised companies" and significantly increased stock price volatility as part of its rationale for delisting. It also said being a private firm would help the company better navigate its transformation.

The company's shares closed at US$0.49 on Thursday, trading around 98 per cent lower than its debut price of US$40.

Lu said the company could explore another IPO down the road "when the company makes more progress and the market conditions make sense", but it has no timeline or location in mind at the present time.

TuSimple said last month that it was cutting 75 per cent of its workforce and winding down its operations in the US. The retreat comes amid further consolidation in the autonomous driving industry, with several leading players announcing lay-offs and downsizing in the past year.

Last July, Alphabet unit Waymo announced that it would slow down work in the self-driving truck field under its Via subsidiary. Last May, Embark Technology - an early proponent of self-driving truck software development in the US - delisted from the Nasdaq and went private via a merger, after running out of capital to pursue commercial production.

The lack of a clear path to profitability and real commercialisation is a challenge for the industry, which includes technology, hardware supply chain, and regulatory issues, Lu said. "Being able to move from demos and pilots to actually providing a real service that is profitable is the biggest challenge," he added.

TuSimple reported a US$248.6 million loss from operations in the first nine months of 2023, narrowing from a US$341.7 million loss in the same period in the previous year.

TuSimple, once considered a star in the global autonomous driving sector and a leader in US self-driving truck development, has focused on Level 4 autonomy. It was also the first company to deploy autonomous trucks on pilot tests between the cities of Tucson and Phoenix in Arizona and Las Vegas, Nevada in 2018.

The company has been grappling with a US government investigation, corporate disputes and lay-offs since 2022.

The US Committee on Foreign Investment in the United States (CFIUS), an inter-agency panel that reviews the national security implications of foreign investments in the US, kicked off an investigation of TuSimple with the FBI and the Securities and Exchange Commission in 2022.

The inquiry revolves around whether TuSimple co-founder and then-chief executive Hou Xiaodi made illegal funding or technology transfers to Hydron, a Chinese autonomous truck start-up established by another TuSimple co-founder Chen Mo in 2021.

How was fired by the company's board in October 2022 after an internal investigation, with it citing a "loss in trust and confidence" in connection with the alleged sharing of confidential information with Hydron.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.