Self-driving trucks startup TuSimple signaled it is close to testing its system without a human safety operator on public roads before the end of the year. During the startup's third-quarter earnings call on Wednesday, TuSimple announced plans to proceed with its driver-out pilot program, which would remove the driver for runs over the 80-mile route between the Phoenix and Tucson areas.
"We expect to perform the initial driver runs before year end and to complete the pro pilot program over the coming months," Cheng Lu, TuSimple's president and CEO, said during the call. "As a reminder, the driver-out pilot will consist of multiple runs performed over multiple weeks and is a major part of ongoing technology development across many dimensions, including software, hardware and go-to-market. What makes the driver-out pilot program so challenging is that we're solving for both known and unknown factors that we might encounter on public roads. This includes noncompliant motors, unplanned road construction and changing driving conditions, all of which must be continuously monitored and accounted for in real time."
If TuSimple can begin this program before 2022, it will put the company in one of the leading positions against the competition. Kodiak Robotics, for example, has only begun driver-out testing on closed tracks. Embark is not currently testing on public roads without a human safety driver, but is planning a pilot for 2023 and is targeting commercial driver-out operations by 2024. Waymo Via is currently not testing in "rider only" mode, but is testing with two autonomous specialists in the cab of the vehicle, one in the driver's seat and the other acting as a software technician. Swedish freight company Einride, which just launched its U.S. operations, has been driverless in Europe for a couple of years now, but will only be operating without a human driver in the U.S. at its partner GE Appliances' closed campus.
"In the coming weeks, we expect to 'freeze' our technology development so it can be used in final test runs on open roads with a safety driver and on a test track with no human inside the vehicle," according to TuSimple's earnings report. "This test phase will inform and validate our safety case. After we fully complete the safety validation process, our team will then be able to proceed with removing the driver from the vehicle for our 80-mile run on public roads."
In other words, TuSimple thinks its tech is ready to perform fully autonomously, at least on a specific stretch of road, and will spend the next few weeks building out its safety case. The company outlined two primary areas for its driver-out safety case validation: "Systems safety" and "operations safety."
Systems safety validates that the trucks are safe to operate autonomously by helping each aspect of the system to be reliable, fail-safe, sufficient and proven, said Lu. Operations safety "supports each aspect of our driver operations to be prepared and proven by creating safe processes and procedures," said Lu. "Operation Safety validates that we have monitored and triaged every driving event that we can, assessed the event's level of safety risk and assigned it for resolution by engineering teams."
Beyond the pilot, TuSimple does face some challenges in the Tier 1 supply chain to moving past the driver-out tests and actually putting more vehicles on the road. In the near term, Lu pointed to supply chain disruptions and labor shortages. In the long term, the challenge TuSimple sees to the scale deployment of autonomous technology is supply chain maturity.
"That really revolves around key Tier 1 components like the compute, autonomous Domain Controller (ADC), or redundant actuation, steering and braking," said Lu. "And so there's a little chicken-and-egg that happens in this because Tier 1s don't want to commit to investments without orders, and that's something that we have identified as one of the risks and so we are taking steps to address that... Over the next coming quarters, you'll hear more announcements from us in terms of investing more heavily in the supply chain to ensure that we can meet the timeline that we talked about."
In Q3, TuSimple spent $85 million on R&D, which is up $24 million, or around 3x, year-over-year, and a large chunk of that was related to hiring tech talent and additional drivers. Adding more personnel, as well as increasing the commercial utilization of its fleet and autonomous freight network (AFN) partner fleets, is what TuSimple credits as the reason it was able to beat revenue expectations of $1.65 million with a Q3 revenue of $1.8 million.
"The ability to recruit new drivers and acquire new trucks for our fleet continues to be our most significant source of headwinds to revenue growth, but we have been able to navigate this environment and are on track to achieve our full year revenue guidance of $5 to $7 million," according to the earnings report.
TuSimple's net loss per share, at $0.54, was greater than the expected $0.49. However, the startup increased its revenue mile growth by 2.5x from Q3 last year, coming in at around 945,000 miles, which is up from around 379,000, but quarter-over-quarter is a lot less impressive -- in the second quarter, TuSimple drove around 880,000 revenue miles, which means there's only a 7% increase.
During the earnings call, TuSimple also said it is mapping new freight lanes with UPS from Arizona, where the company has performed most of its operations, all the way to Florida. The company plans to expand its AFN across the United States by 2024, and recently partnered with freight management company Ryder to help achieve that end. Now, TuSimple is collaborating with UPS Supply Chain Solutions to expand its AFN ahead of schedule to the east coast to reach UPS North America Air Freight (NAAF) terminals in Orlando and Charlotte, where the company has already high-def mapped routes.
Since 2019, when TuSimple's partnership with UPS began, the company has completed 160,000 miles of freight hauls for NAAF and says it saved the company 13% on fuel at speeds between 55 miles and 68 miles per hour. In Q3, when the company expanded its AFN from Dallas to Charlotte, it mapped 1,400 new unique miles, bringing total unique miles mapped to 9,900. TuSimple said it expects map quality to continuously improve due to new mapping tech that is refined for dynamic, low-latency updates, reducing update times from weeks to days and, over the long term, to minutes.