Sustained losses, broken arms to survive, Tucson will fall to the altar in the future

picture is @直视中国

Text｜Online travel, author｜Zhou Xiongfei

Geely is "buying, buying, buying" again?

Recently, according to smart car reference citing informed sources, Geely Holding Group intends to acquire all of the shares of Tucson Holdings’ Asia-Pacific region business. .

Regarding this news, Link Travel specifically asked Geely and Tucson for confirmation. The former said it would not comment, and the latter said it was not clear.

Although the acquisition has not yet been finalized, it seems to the industry that there is a high probability that it will be realized. After all, the Asia-Pacific business has long been marginalized by TuSimple. At the same time, according to Linked Travel, TuSimple has planned to sell the Asia-Pacific business before. plan.

Tucson will choose to sell its Asia-Pacific business in the future, perhaps in order to get rid of the current predicament.

In the first ten days of this month, Tucson Future released its financial report for the second quarter of this year, achieving revenue of US$2.594 million (equivalent to RMB 17.717 million), an increase of 73% compared to the same period last year, but significantly lower than the market expected revenue. In terms of

net profit, Tucson is still in the red in the second quarter of this year, recording a loss of 111 million US dollars (equivalent to 759 million yuan). Although narrowed by 8.3% compared with in the second quarter of last year, The loss of in the first quarter of this year has not improved much.

Through online travel, TuSimple has been in a vortex of losses since its listing in April last year, so that in the past two years, some executives have resigned from TuSimple, including the original Chairman Chen Mo and board member Lu Cheng and others.

Because of these negative factors above, as of press time, Tucson Future ’s stock price is only $7.50 per share, which has fallen by nearly 90% compared to last year’s peak stock price of $79.84 per share.

TuSimple’s future stock price, screenshot from Tiger Securities APP

will put TuSimple in such a passive situation, which has a lot to do with the unfavorable development of the Asia-Pacific business.

With the rapid development of the new energy vehicle industry, China has undeniably become one of the largest markets in the world for the implementation of autonomous driving technology, such as Baidu , Pony.ai and WeRide and other autonomous driving companies They have landed their own Robotaxi business.

However, in the field of self-driving trucks, it will be restricted by laws and regulations and the market environment in China. Therefore, compared with the US market, it will be difficult for Tucson to develop business in China in the future.

As a result, the Asia-Pacific business has gradually become a "drag" in the eyes of TuSimple in the future. After TuSimple sells the Asia-Pacific business to Geely, will its subsequent development be on the fast track?

01. Selling the Asia-Pacific business, Tucson will "cut off its own arm" in the future?

Tucson may sell its Asia-Pacific business in the future.

According to relevant media reports, based on the cooperation prospects and potential after the acquisition, Geely has submitted a non-binding offer letter to TuSimple to acquire its business in the Asia-Pacific region from TuSimple Holdings, including but not limited to Related assets required to operate or support the relevant subsidiary business of such business and its business in the Asia-Pacific region.

According to Linked Travel, TuSimple was established in 2015 and is a company with self-driving trucks as its main business. At first, the company’s business was distributed in Beijing, China and San Diego, California, and then expanded to Shanghai, Hebei, and the United States. Arizona and others.

This also means that the Asia-Pacific business that Tucson will sell to Geely in the future is mainly the business in Beijing, Shanghai and other places in China.

It should be noted that this is not the first time Tucson wants to sell its Asia-Pacific business in the future.

In March this year, according to Reuters and other media reports, Tucson plans to sell its Asia-Pacific business, which is mainly based on China, for US$1 billion in the future. After selling this part of the business, it will focus on the development of the US market. To facilitate this,At that time, TuSimple had approached several Chinese investors, including private equity firm Boyu Capital, to find potential buyers.

Although TuSimple did not make a positive response to this news at that time, it still received widespread attention in the industry. After all, it was less than a year before the news was exposed that its US stock market was listed.

At the end of April last year, TuSimple officially landed on NASDAQ in the United States, and the stock code is "TSP". With this listing, Tucson will also become the L4 level "first self-driving truck" in the future. Before the company went public,

was actually a high-profile autonomous driving company. On the one hand, it originated from the background of its founder. Its founder, Chen Mo, had entrepreneurial experience in different fields such as Internet advertising, games, and second-hand car platforms before founding Tusimple Future.

As for the other founder Hou Xiaodi , he was very interested in the field of computer vision technology when he was in college, so that he was already a household name in this field before he founded Tucson Future.

On the other hand, although TuSimple was established in Beijing, it established a branch in the United States soon after its establishment. China and the United States began a two-line layout, and each has a technical team. In the United States, Tucson's future business will focus more on autonomous driving trunk line logistics, while in China it will focus on the implementation of autonomous driving technology in the field of ports and terminals.

But what I didn't expect was that such a self-driving star company would sell its business in China less than a year later. Not long after this news was exposed, some media revealed that Chen Mohui, the former Tucson's future CEO, was one of the potential buyers of the business in China.

Also in March this year, according to TuSimple Future’s announcement, Chen Mo, the founder of TuSimple Future, resigned from the position of executive chairman; then at the end of the month, many media reported that Chen Mo was planning to use capital to operate TuSimple Future Chinese team repurchase.

According to the repurchase plan given by CITIC Capital , it will acquire the TuSimple Future China team (hereinafter referred to as "TuSimple China") at a price of 1 billion US dollars, and then Chen Mo will redeem it from CITIC Capital. With management and organizational structure as the core, it operates independently in the Chinese market.

According to insider sources, if Chen Mo realizes the acquisition plan, he will reorganize the business in China and plan to list in Hong Kong.

But the facts prove that the industry did not wait for Chen Mo to successfully acquire Tucson's future business in China.

In June this year, according to 36氪 and other media reports, Chen Mo, the former chairman of Tucson Future, has stepped into the field of car manufacturing and founded a company called "Hydron". A company that provides hydrogen fuel heavy trucks with L4 autonomous driving functions and hydrogen refueling infrastructure services.

Picture source HYDRON official website

Hydron is headquartered in Los Angeles, California, USA. At that time, the company had completed two rounds of financing , with a total financing amount of more than 80 million US dollars, and the pre-investment valuation of the B round had reached 1 billion US dollars. is worth noting that when TuSimple reaches this valuation in the future, the financing has already reached the D round.

Although Chen Mo’s two ventures in the field of autonomous driving have focused on the segmented track of autonomous driving trucks, unlike Tucson Future, Hydron uses hydrogen energy as the power source for trucks. In Chen Mo's view, compared with lithium batteries, the hydrogen fuel vehicle has unique advantages in terms of battery life, energy replenishment, and low temperature resistance. It is especially suitable for scenarios such as heavy load, long-distance travel across cities, and low temperature in winter.

Following Chen Mo's founding of Hydron, he also announced a fact to the outside world - he gave up the plan to acquire Tucson's future China region. After the rumors of

's acquisition have settled, Tucson will continue to look for a seller for the sale of its business in China in the future, and the industry is also waiting for the appearance of a "taker". Until now, two months later, Geely has become the buyer to acquire the business in China.

"For Geely, the acquisition of Tucson's future business in China is of great benefit, because by buying this business, it can realize its entry into the self-driving truck race.Road, in order to cooperate with its own other new energy vehicle business. Zhang Junyi, a senior expert in the travel field, said this to Linked Travel.

As for TuSimple Future, the other party to the transaction, selling the other half of its business in China is also regarded by some people in the industry as "self-defeating" One arm". Behind this, perhaps it is because only in this way can TuSimple get out of the current predicament in the future. Not yet over 100 million.

At the beginning of this month, TuSimple released the financial data for the second quarter of this year, the data showed that its revenue was 2.594 million US dollars, compared with 1.422 million US dollars in the same period last year increased by 73% year-on-year; In terms of chain ratio, compared with the first quarter of this year, it also increased by 14.6%.

Although in terms of revenue, Tucson has maintained both year-on-year and quarter-on-quarter growth in the future, but it is 93.6 less than the market estimate of $3.52 million before the financial report was released. More importantly, its quarterly revenue is still in the range of one million US dollars.

In contrast, "Wei Xiaoli", which was also established in 2014-2015 and focuses more on new energy passenger vehicles, is in the In the first quarter of this year, revenues of US$1.561 billion, US$1.174 billion, and US$1.301 billion have been achieved respectively. The gap between the two is a bit large.

Looking at the net profit, Tucson will still be at a loss in the second quarter of this year. Among them, it was recorded at US$111 million, a year-on-year decrease of 8.3% compared with US$121 million in the second quarter of last year, but basically unchanged from US$112 million in the first quarter of this year.

Tucson’s future 2022Q2 financial data, screenshot Since the financial report

as Tucson is in the trend of "increasing revenue but not increasing profits" in the second quarter of this year, its cash reserves are also in a disadvantageous situation. At the end of the second quarter of this year, its cash holdings, cash The total amount of equivalents and restricted cash is only US$1.16 billion, a decrease of US$79 million compared to the previous quarter.

From the above financial data, it can be seen that Tucson will continue to burn money in the future, and many factors that lead to this dilemma The biggest factor is the slow development of business in China. When

mentioned self-driving technology, many people can think of self-driving taxis running on some roads in first-tier cities such as Beijing and Shanghai, but for self-driving trucks, it is more important in China. It mostly appears in closed scenes such as docks and mines, and the technology development is not mature.

In contrast to the US market, the demand for truck drivers is huge. According to the estimate of the American Trucking Association, the gap will expand to 175,000 in 2024. Companies have to overpay to find enough drivers. As a result, driver labor costs account for the largest portion of semi truck operating costs, up to 43% per mile and 79% more than fuel costs.z2 z

In order to further reduce the cost of drivers, some American truck companies have begun to promote the landing of self-driving trucks. According to Netease News , the self-driving truck company Aurora announced in June this year that it would cooperate with FedEx and Werner Enterprises, and is expected to launch the first batch of unmanned trucks on US roads by the end of next year. A self-driving truck driven by a driver.

In an interview with the media in July this year, Chen Mo also mentioned why TuSimple would choose to sell the business in China in the future. "This year, the industry environment has changed suddenly, and TuSimple's future market value has dropped by 80%. In order to support the launch of mass-produced vehicles, TuSimple can only sell the relatively slow-growing Chinese business in the future, which can not only reduce costs, but also return to the market. Some funds.”

In addition to being a drag, the existence of business in China will also expose Tucson to regulatory risks in the future.

Perhaps due to the "big tree attracts the wind", TuSimple, which has business in both China and the United States, was listed in April last year, and soon attracted the attention of relevant US departments. Among them, the Committee on Foreign Investment in the United States (CFIUS) targeted Mori will investigate it on the grounds that it owns business in China in the future.

In February this year, CFIUS officially ended its long-term investigation on Tucson Future. As a price, Tucson Future reached an international agreement with the US governmentNational Security Agreement (NSA), which includes that Tucson will transfer some technical supervision of the self-driving truck business to relevant US departments in the future; at the same time, new security officials and security directors will be appointed, and a "government security committee" will be established to regularly Meeting and reporting to CFIUS, etc.

Looking at it this way, it is reasonable for Tucson to sell its slow-growing Asia-Pacific business in the future. However, even if the business in China is sold, it does not mean that Tucson will have no troubles in the future.

03. After selling the business in China, will Tucson have a future?

Similar to the self-driving taxi track, Tucson's primary goal in the future is also to realize the commercialization of self-driving trucks.

TuSimple has calculated an account in its US stock prospectus in the future. In its view, if a truck can achieve a revenue of 60,000 US dollars a year, then the company will realize revenue and expenditure when the number of trucks in operation reaches 5,000. On balance, it is a matter of time before realizing profitability.

But all the beautiful ideas need to be based on the real landing operation of the truck, but for the future of Tucson, it becomes impossible to realize this.

According to the latest data released by Tucson Future, as of June 30, 2022, Tucson Technology announced that the total number of truck reservations reached 7,485, but so far none of them has entered the stage of mass production. In addition, in the financial report for the first quarter of this year, TuSimple said that it has postponed the launch of pre-installed mass-produced self-driving trucks from 2024 to 2025. One of the reasons why

is difficult to operate comes from technical obstacles.

According to the above, TuSimple is a self-driving truck company based on L4-level autonomous driving. Because of this, in order to allow trucks with L4-level autonomous driving capabilities to operate on the road, TuSimple needs to invest more in the future. According to its previous financial reports for several quarters, research and development expenses account for more than 70% of its total expenditure all year round. In addition to supporting software research and development,

needs to face high hardware costs in the future in order to realize L4 level autonomous driving. According to the report of CICC, among the mainstream solutions of L4-level autonomous driving, the cost of perception hardware alone ( radar, , camera, lidar, , and positioning system, etc.) is as high as 32,600 yuan, while lower-level solutions The cost is less than 10,000 yuan.

The perception hardware on Tucson’s future self-driving trucks, Tucson’s financial report

is the same as all self-driving technologies, Tucson’s future L4-level self-driving trucks will also be subject to local laws and regulations if they want to operate on free roads in the United States limit.

Because of the above limitations, other self-driving companies that are engaged in the self-driving truck business like TuSimple in the future began to lower the technical level in order to realize the product's landing operation and even commercialization as soon as possible. Among them is the Inceptio Technology , which has been downgraded to the L3 level in product planning to promote the operation of low-end self-driving trucks. In addition to the impact of

technology itself, the safety of self-driving trucks has also become another major consideration.

Just the day before TuSimple released its financial report for the second quarter of this year, according to the " Wall Street Journal " report, TuSimple had a traffic accident in the United States in April this year. In the accident, a self-driving truck suddenly turned left and crossed Cut, hit a concrete barricade. After the

accident, it quickly attracted the attention of the local regulatory authorities, who questioned Tucson’s eagerness to bring the unmanned truck to the market in the future, risking safety on public roads. Regarding this, Hou Xiaodi, co-founder and CEO of TuSimple, said that after the accident, the first thing TuSimple did was to stop the testing of the entire fleet and conduct an independent investigation. Before it is determined that the fleet can operate safely, TuSimple There will be no commercialization in the future.

Tucson also faces the risk of losing executives in the future. In March of this year, after Chen Mo resigned as the chairman of TuSimple Future, Lu Cheng, the company's president, CEO and board member, also left TuSimple Soon. Hou Xiaodi, the former chief technology officer, became the new CEO and The position of president and former chairman of the board of directors Chen Mo was also taken over by Hou Xiaodi.

Three months later, Tucson will come again in the futureIt was announced for the first time that the company's chief financial officer, Patrick Dillon, would resign; and last month, according to 36 Krypton, TuSimple's future co-founder Huang Zehua had left to start a business, and the entrepreneurial project was also related to trucks. The company's project was called "Zero One Smart Card" .

Yet while Tucson's future is entangled in technological security, cost pressures, and executive turnover, other players in the autonomous truck race aren't stopping to wait for it.

According to relevant media reports, Wal-Mart 's online grocery business began to use Silicon Valley self-driving startup Gatik's fully self-driving trucks in July this year; electric heavy truck company Nikola announced the official start of production of Nikola Tre (Nikola three No.), deliveries are expected to begin by the end of next year.

Looking at the country, the self-driving truck track is equally lively. In June this year, Alibaba obtained the country's first public road test license for L4 "driverless" self-driving trucks in Deqing, Zhejiang. In the future, the unmanned truck "Big Man Donkey" developed by Alibaba Dharma Academy will carry out road tests in the designated area of ​​ Deqing .

Prior to this, Baidu and Shiqiao jointly established DeepWay, and released the first concept car Deepway Xingtu 1, which is expected to be mass-produced and delivered in 2023; "Super Truck" took the lead in SOP mass production and delivered to customers in small batches; Inceptio Technology and Dongfeng jointly manufactured vehicles and released the truck automatic driving system "Xuanyuan", which is expected to be carried on the road by 80,000 trucks in 2024.

From this point of view, if Geely's acquisition of China's business is actually completed, Tucson will be able to focus more on the US business in the future, but this company is no longer the star company it used to be.

In the view of Linked Travel, Tucson’s decision to sell its business in China may also express a determination to the outside world—it wants to gain certain advantages in the future self-driving truck track, but before that, it must also Overcome the "four mountains" of technical security, cost pressure of software and hardware, loss of internal executive team and fierce competition in the industry.