The ongoing reshuffle at TuSimple suggests a co-founder’s impatience. Hyliion Holdings already enjoys the backing of an outsized rival. Plus, a press release war over emissions reductions and a plea for self-driving truck testing in California.
TuSimple’s redesign that began in March has turned into a full house cleanup. Most notable is the departure of Pat Dillion. His Wall Street experience brought investor relations credibility to the self-driving trucking startup.
Xiodai Hou co-founded the company. Now it is actually society. A compelling story in The Information published on Thursday recounts a tense meeting in January. Hou asked why TuSimple’s stock price didn’t reflect that it was the first to retire the driver of a self-driving truck. The step was taken at the end of December.
After opening 10% in premarket trading on the news, the stock price began to fall again from $37 in January. TuSimple traded at $7.42 intraday on Friday, reflecting disdain for most publicly traded transportation startups.
In an awkwardly executed transition, Hou took over from Cheng Lu as CEO in March. Around the same time, the Committee on Foreign Investment in the United States (CFIUS) concluded an investigation into TuSimple. CFIUS implemented oversight to ensure intellectual property was not shared with TuSimple’s Chinese operations.
TuSimple mexodus from management
With a doctorate in computer science and neural systems from the California Institute of Technology, Hou is the smartest guy in the room at TuSimple. Virtually no member of the management team in place when the company went public in April 2021 is there to challenge him.
In addition to Lu and Dillon, co-founder and chairman Mo Chen is gone. The same goes for Chuck Price, the director of products, who left in December. Price and Lu remain advisers, but neither sits at the table where decisions are made.
Jason Wallace, Marketing Manager at TuSimple, and Mission Control Communications, TuSimple’s media relations company, followed Mo Chen. They now work for his autonomous hydrogen-based startup called Hydron.
Jim Mullen, former acting director of the Federal Motor Carrier Safety Administration, remains TuSimple’s chief administrative and legal officer, according to his LinkedIn profile.
Firmly in command
Despite the widespread upheaval, TuSimple remains on the path to commercial viability. The relationships and partnerships formed before Hou replaced the roles of CEO and chairman remain in place.
Manufacturing partner Navistar is always on board. A year behind the 2024 goal of having an autonomous truck ready for TuSimple software. TuSimple continues to self-haul freight with security drivers for United Parcel Service.
Modernized Navistar self-driving trucks still haul cargo, generating multimillion-dollar revenue. TuSimple had approximately $1.2 billion in cash and cash equivalents at the end of the first quarter.
Hou is firmly in charge, as is Tesla’s Elon Musk, who makes all the decisions at the electric car company. Hou’s personality dictates his need to stay in control, observers said.
Hou’s decisions may have cost TuSimple credibility with investors, even though the company retains a first-mover technology advantage.
Hyliion’s announcement this week that it would work with Cummins Inc. to certify the 12-liter natural gas engine it already uses in prototypes of its Hypertruck ERX brought almost immediate benefits to the startup.
The day after Hyliion declared that Cummins – a threat to Hyliion’s viability – would become a partner, NFI Industries filed deposits on 10 Hyliion Hypertruck ERX models. NFI is getting most of its attention for greening its drayage fleet, which will be fully electric by mid-2023.
Going from being a member of Hyliion’s Hypertruck Innovation Council to being a customer-in-waiting is further proof that Hyliion could become a winner among alternative fuel transportation startups.
“By investing in green technology like the Hypertruck ERX, we are able to take another transformational step towards a zero-emissions freight industry,” said Jim O’Leary, vice president of assets at NFI, in A press release. “I can’t wait to see the impact these Hypertruck ERX units will have on further reducing our carbon footprint.”
Having Cummins as a collaborator, rather than a rival, is a game-changer, Hyliion CEO Thomas Healy said this week.
“Cummins is a very big player in this space and has enormous credibility and trust from fleets,” Healy said. “So in all areas it helps Hyliion, whether it’s with the OEM or fleet discussions that we have.”
One thing that hasn’t changed for the better is Hyliion’s stock price. It is down around 21% from last week, closing at $3.22 on Thursday.
War of words
“Sticks and stones may break my bones, but words will never hurt me.” The African Methodist Episcopal Church takes credit for the old adage dating back to 1862.
We’ll see if it holds up well.
Environmental groups seek to shame the Truck and Engine Manufacturers Association and its members. In May, the EMA sued the California Air Resources Board for delaying a 2024 regulation requiring significantly reduced nitrogen oxide (NOx) emissions from heavy-duty trucks.
The EMA alleges that CARB’s low NOx standards ignore the required four-year minimum to allow manufacturers to prepare.
Uniting as Electric Trucks Now, 21 organizations, including the Environmental Defense Fund and the Natural Resources Defense Council, are calling on EMA members to rally behind the trade group’s action and commend those who s oppose it. Daimler Truck North America, Volvo Trucks North America and Cummins Inc. are accused of paying “lip service” for cleaner air.
The tactic is similar to the EMA’s use of quotes from companies and organizations that CARB’s near-immediate implementation of its Truck Omnibus Rule is an overshoot. The EMA is also throwing shade at the Environmental Protection Agency over its cost increase estimates under its NOx emissions reduction plan for clean trucks.
About these autonomous regulations
Speaking of letters, a group of 35 industry leaders wrote to California Governor Gavin Newsom urging him to start legalizing self-driving truck testing in his state.
California has allowed testing of lightweight self-driving vehicles weighing less than 10,001 pounds since 2019. But heavy trucks with high-range software are banned from road testing. Most of the major self-driving truck developers are based or have a presence in California.
The letter says California lags other states with more permissive rules regarding the types of audio-visual vehicles that can operate on public roads. Many self-driving truck tests are based in Texas, Arizona, and New Mexico.
“Indeed, it has been 10 years since the original enabling legislation in 2012, and during that time there has been no movement for the regulation of autonomous trucking,” the letter states.
No schedule for autonomous heavy-duty truck testing has been set, according to the California Department of Motor Vehicles.
- Medium-duty van trucks could be 100% electrified, according to latest finding North American Council for Freight Efficiency. Some will be easier than others, but they can all be done, according to the NACFE report.
- The Kenworth The Class 8 Truck Assembly Plant in Chillicothe, Ohio recently hosted the inaugural Kenworth Truck Parade with more than 50 new, classic and custom trucks from 28 states and Canada in attendance.
It’s all for this week. Thanks for reading. Click here to get Truck Talk delivered to your email on Fridays.
FREIGHTWAVES’ Top 500 For-Hire Carriers list includes NFI (#33).