On Tuesday, TuSimple, a publicly traded company specializing in the development of self-driving trucks, announced its initiation of regular test runs on an expressway in Japan, signifying its entrance into the country. This move suggests TuSimple’s increased focus on the Asian market. In December, the company revealed plans to divest its China-based business due to regulatory concerns in the United States regarding its ties with China. However, in May, TuSimple reversed its decision and expressed its intention to continue operations in the region.
TuSimple’s expansion into Japan is strategically significant as the country has opened up opportunities for autonomous vehicle testing. In April 2022, the Japanese government amended its laws to permit the operation of Level 4 autonomous vehicles on public roads. This regulatory change was a response to the chronic labor shortage caused by Japan’s aging population. (Level 4 is a designation by the Society of Automobile Engineers indicating that a vehicle can autonomously handle all aspects of driving in certain conditions without human intervention.)
According to a report by the financial newspaper Nikkei earlier this year, Japan plans to introduce a self-driving lane on specific sections of the New Tomei Expressway by 2024. This lane, which will run parallel to the Tomei Expressway, is expected to enable the commercial operation of Level 4 autonomous trucks by 2026. It will be equipped with sensors, cameras, and 5G networks to monitor road conditions.
Cheng Lu, President and CEO of TuSimple, stated in a press release, “Self-driving technology offers a promising solution to Japan’s logistics industry, which is grappling with a shortage of drivers. We are committed to forging strong business partnerships with local companies and developing technology that meets the demands of the Japanese market.”
Although TuSimple identifies itself as a U.S.-based company, regulatory filings indicate that it has subsidiaries in China, Hong Kong, and Japan. The company’s activities in Japan began in 2021 when it conducted a series of safety validations and tests on its autonomous vehicle system using a truck from a local Japanese original equipment manufacturer (OEM). Since January 2023, TuSimple has been conducting regular test runs on the Tomei Expressway.
TuSimple plans to commence testing its driverless technology on the 310-mile route between Tokyo and Osaka this year as it progresses towards removing the driver for testing purposes in the following year. In late 2021, the company successfully completed a “driver-out” run on an 80-mile segment between Tucson and Phoenix.
The company currently operates with two trucks and aims to expand its fleet to four units by the end of this year. TuSimple has hinted that it will soon share more details about its original equipment manufacturer (OEM) partner.
Most of TuSimple’s testing has been conducted in Arizona and China. However, Japan marks the company’s first venture into a region where driving is on the left-hand side of the road. This necessitates adapting their technology to comply with different rules and driving behaviors. Additionally, local authorities in Japan have imposed no time restrictions on testing, enabling TuSimple to validate its autonomous driving system during both day and night hours.
Although TuSimple has not explicitly explained the significance of its focus on Japan, the company anticipates initiating full-scale commercial operations after thoroughly testing and validating its safety measures and business model. While the company continues to conduct tests in Arizona, its expansion into Japan could indicate a shift away from its U.S.-based operations. TuSimple has encountered numerous obstacles in the U.S. that have hindered its goal of commercializing its technology by 2024.
Recently, TuSimple implemented a workforce reduction strategy, laying off approximately 330 employees, all of whom were based in the U.S. These measures were taken to conserve cash and sustain the company’s operations. Prior to this, in December, TuSimple had already reduced its workforce by 25%, affecting only U.S. employees.
The layoffs occurred shortly after TuSimple’s partnership with Navistar to develop purpose-built autonomous semi-trucks fell through, thereby jeopardizing the company’s other commercial collaborations. Previously, TuSimple had received nearly 7,000 reservations for Navistar-built trucks, including orders from customers like DHL Supply Chain. As part of the agreement, TuSimple had committed to delivering 100 autonomous trucks to DHL, with the first expected for delivery next year. TuSimple has neither confirmed nor denied the current status of this deal and has not disclosed any new OEM partnerships for the development of self-driving trucks.
In addition to these challenges, TuSimple faces the possibility of being delisted from the Nasdaq exchange due to its failure to submit its last two quarterly reports on time. However, the company has obtained a temporary reprieve, pending a hearing scheduled for June 22. TuSimple has chosen not to comment on the potential delisting or the status of its delayed earnings reports.
