Autonomous truck technology company TuSimple and truck maker Navistar have backed out of their deal to jointly develop self-driving trucks, the companies announced Monday.
The move to end the partnership comes less than a month after Cheng Lu returned to his role as CEO of TuSimple after previously being ousted. Lou’s return came days later a company fired its predecessor and TuSimple co-founder Xiaodi Hou after an internal investigation revealed certain employees had ties and shared information with Hydron, a China-backed hydrogen trucking company.
Part of the reason TuSimple and Navistar ended their deal is that the former “needs to get its house in order” after an executive shakeup and several regulatory investigations, according to someone familiar with the matter.
TuSimple is facing simultaneous investigations by the Federal Bureau of Investigation, the Securities and Exchange Commission and the Committee on Foreign Investment in the US (CFIUS) The final investigation is regarding a major investment from Sun Dream, an affiliate of Sina Corporation, which operates China’s largest microblogging platform Sina Weibo. CFIUS questioned whether the investment posed a threat to U.S. national security, prompting TuSimple to consider selling its China business unit, according to the company’s second-quarter earnings report.
TuSimple has since confirmed to TechCrunch that it will exit its China operations.
The partnership between TuSimple and Navistar to develop jointly and production of purpose-built autonomous semi-trucks by 2024 began two years ago. The deal helped TuSimple move away from retrofitting existing trucks with autonomous sensors and technology. Navistar bought an undisclosed stake in TuSimple at the time and is still a shareholder in the company.
TuSimple’s relationship with Navistar has never been exclusive, and the company has been looking to bring on another OEM partner for some time, someone familiar with the matter told TechCrunch. The company has received nearly 7,000 reservations for its Navistar trucks with customers such as DHL supply chain, Schneider and US Xpress. Some of those customers will receive refunds for their deposits, while others told TuSimple they are happy to wait and see if the company can close another OEM deal soon.
It’s also entirely possible that Navistar and TuSimple will tie up in the future. A statement from the companies said: “The decision to terminate the development agreement does not prevent the companies from working together in the future.”
TuSimple said in October that it plans to achieve commercial viability in 2023. As the dust settles from last year’s dramas, TuSimple will focus on improving the safety of its autonomous driver and reducing operating costs per mile of autonomy, a source familiar with the matter said. the TuSimple plans.
In the meantime, TuSimple will continue to run all current pilot programs with customers using its fleet of nearly 80 converted Navistar trucks.
This article has been updated with information from a source familiar with the matter.