The World’s First Publicly Traded Autonomous Vehicle Company: TuSimple
The conversation begins with Cheng discussing why TuSimple chose to go public as a traditional IPO rather than a SPAC and what the journey was like to become the world’s first publicly traded autonomous vehicle company.
We priced above our range. We raised $1.3 billion dollars as a company. We have a market cap of $8 billion dollars.– Cheng Lu
Taking a step back, Grayson asks Cheng about his time studying the economics of online platforms at the University of Virginia. At that time, Facebook was beginning to grow into an enterprise and the age of online platforms was about to change the world with the introduction of Uber, Lyft, and delivery services.
Thinking about what happens in the next 10, 20, 30 years, it’s safe to say that it will be the age of artificial intelligence. Autonomous driving is certainly one of the hardest use cases, but one of the biggest opportunities. Autonomous trucking is a massive opportunity.– Cheng Lu
Comparing and contrasting the rapid growth of Facebook, Grayson asks Cheng how he is preparing for the growth of TuSimple’s Autonomous Freight Network (AFN).
At the heart of TuSimple, we are an artificial intelligence software company. We are building the most advanced Level 4 autonomous driving system. We are also building the hardware in conjunction with our OEM Tier 1 partners.– Cheng Lu
The AFN will be TuSimple’s 5G network and their purpose-built autonomous trucks will be their 5G phones.
Shifting the conversation to the supply chain, Grayson and Cheng discuss how autonomous trucks can shore up the supply chain. They discuss the relationship between autonomous trucking and railroads (including TuSimple investor Union Pacific) and how these two industries will complement each other to the benefit of society.
We have the opportunity to help enable new freight capacity to address the supply chain constraints.– Cheng Lu
Doing things the right way is a common trait for TuSimple. The company has a partnership with Navistar to develop automotive-grade autonomous trucks that are manufactured in a factory and are not retrofitted.
If you want to scale autonomous freight operations you have to have purpose-built trucks that are factory-produced.– Cheng Lu
With 6,775 reservations for factory-built TuSimple autonomous trucks, Grayson asks Cheng how his customers are planning to use these trucks. Customers are looking to use their new autonomous trucks for long-haul applications.
Staying on the topic of orders, Grayson asks Cheng what is TuSimple’s business model for the trucks and how will TuSimple manage and monetize the trucks once they are sold to customers.
When a customer buys a truck from Navistar that is powered by the TuSimple Autonomous Driving System, the customer will subscribe to TuSimple Path, which is a per-mile subscription.– Cheng Lu
TuSimple has been focused on autonomous trucking since day one. Grayson asks Cheng why the company made the decision to focus on trucking from day one and why they did not divert their attention to robo-taxis.
The number one thing to get adoption into a very disruptive technology is are you providing something of value to the existing key stakeholders. Autonomous trucking checks all of those marks.– Cheng Lu
As seen in a 60 Minutes episode, TuSimple has a culture of safety that is built around the company’s core five values. The company also has a culture of transparency. Cheng discusses why this is important and why the company focuses on safety and transparency. This culture will play a vital role as TuSimple prepares for driver-out runs which will be revenue-generating runs and not demos.
TuSimple is the only company that has demonstrated the ability to drive on not only highways but surface streets.– Cheng Lu
Wrapping up the conversation, Cheng discusses TuSimple’s partnership with McLane, a Berkshire Hathaway company.
Recorded on Friday, May 14, 2021.