It's the end of the road: liquidation, dissolution.
That's the fate awaiting TuSimple, the global leader in autonomous vehicles, soon to be officially announced.
Amidst a series of internal and external challenges, abandonment and closure seem to be the only viable solution.
Currently, TuSimple's latest market valuation stands at $57.47 million (approximately 410 million RMB), a staggering 99% drop from its peak. However, as of the end of the third quarter of fiscal year 2023, the company still holds nearly $250 million (approximately 1.8 billion RMB) in cash and equivalents.
The core reason for liquidation lies in this $1.8 billion cash flow.
And thus concludes the story of TuSimple.
TuSimple reaches the end of the road
In the latest intelligence on autonomous vehicles, insiders reveal that TuSimple's board of directors, management, and key shareholders have reached a new resolution: to shut down the company, initiate liquidation, and proceed with what's being termed as the "death process" for TuSimple's corporate entity.
Earlier on, TuSimple had already ceased all commercial activities.
On January 30, 2024, TuSimple faced legal action in the United States as two American shareholders filed a lawsuit against the company alleging "disclosure of trade secrets."
Although the plaintiffs did not provide direct or substantial evidence, as a measure for investor protection, a US court issued a temporary restraining order against TuSimple, limiting nearly all ongoing actions of the company.
Prior to this, on January 17, TuSimple publicly announced its decision to delist, stating that after careful consideration, the company aimed to initiate privatization proceedings and shift its business focus entirely to the Asia-Pacific region and China.
This delisting decision served as the catalyst for the latest lawsuit against TuSimple.
Indirectly, it led to the eventual situation of TuSimple ceasing operations and undergoing dissolution and liquidation.
According to the restraining order, TuSimple is required to:
Prohibit violations of the national security agreement between TuSimple and the Committee on Foreign Investment in the United States (CFIUS).
Prohibit the sale, transfer, or disclosure of TuSimple's trade secrets to any individual or entity outside the United States, including operations in China.
Prohibit the sale, transfer, or disclosure of TuSimple's trade secrets to Hydron.
Prohibit the transfer of proceeds obtained from the sale, transfer, or disclosure of TuSimple's trade secrets or assets to entities outside the United States.
Following the issuance of the restraining order, TuSimple announced the suspension of all commercial activities.
Subsequently, recruitment channels associated with TuSimple reported halts in social and campus recruitment efforts.
There were also reports of some recent graduates who had received offers being notified of the inability to honor those offers.
For TuSimple, "liquidation" is not the typical response to such a restraining order and shareholder lawsuit.
However, for TuSimple, it appears to be the only recourse.
This stems from a significant shift in TuSimple's strategy since 2023, transitioning its focus from the United States to the Asia-Pacific region.
In June 2023, TuSimple publicly announced the sale of its US operations and auctioning of assets, preceded by significant layoffs at most of its US research centers.
In the delisting announcement, TuSimple also indicated a return to focus on the Asia-Pacific region, with resources consolidating within its Chinese teams.
But Tucson's decision has met with opposition from investors, who have even labeled it as the most sensitive technology transfer and advanced commercial secrets transfer in the current United States.
So even if the restrictions expire, Tucson's hopes for a smooth transition from the US to China are unlikely to materialize.
Tucson's future in the US is virtually reduced to an empty shell, with its founding figure, Hou Xiaodi, gone, and the employees of its North American company scattered. There's no business, no research and development, just offices.
Meanwhile, the team and business in China are moving forward in an organized manner, with clear business objectives and even launching new products...
However, if they can't delist from the US and redirect funds to their Chinese operations, even if Tucson were to prevail in prolonged litigation and shareholder disputes, it would likely still be burdened and miss out on opportunities.
So, the decision to abandon and liquidate the company is not a difficult one to understand.
As long as the ego is small enough, surrendering is the optimal solution.
After surrendering, it's almost like reaching the end of the line and boarding a new train.
As for which train to board, it's currently unknown, but one thing is certain: Tucson's future no longer requires exhausting efforts to solve past and present problems.
How to evaluate TuSimple?
TuSimple has consistently faced challenges that fundamentally the company itself cannot resolve. It's also a problem of a tech-innovation company struggling to align itself.
In the US, you can be an American company operating globally, including in China, leveraging talent and funds worldwide without being questioned about your motives. However, if you're a company with Chinese origins, the situation becomes delicate. Every move can be scrutinized, and even in the pursuit of procedural justice, baseless speculation and suspicion can be allowed.
TikTok has experienced such treatment, and TuSimple finds itself in a similar predicament.
Since its IPO and becoming the world's first public autonomous driving stock, showcasing its technological and developmental leadership, TuSimple has faced waves of scrutiny, rumors, and suppression.
The core founding team of TuSimple has also fragmented under these external pressures.
And as a company, TuSimple lacks the scale of its own commercial revenue generation. Without substantial income, they need to meticulously manage every penny, constantly juggling their cash flow.
Going public through an IPO is aimed at accessing more flexible and larger-scale funding channels. However, post-IPO, they must endure even stricter scrutiny, especially being an advanced technology company seeking financing in the US market.
So, to sum it up, TuSimple's ultimate fate still boils down to the imbalance between technological innovation and its business model.
There's no doubt that TuSimple represents a remarkable case of innovation in practice.
Amidst the burgeoning landscape of autonomous driving technology in 2015 and 2016, they set out with conviction, foreseeing from the outset that the closed loop from technological innovation to business model would be realized first in commercial and freight applications.
Even though initially not highly regarded among numerous self-driving startups, TuSimple lacked relevant background and star-studded investors.
Yet, they later forged ahead with technology and implementation, establishing milestones in various industries. Currently, they remain the frontrunner in deploying autonomous freight transportation solutions.
However, even so, the complexity of autonomous driving technology, along with the lengthy cycle from technological innovation to commercial deployment, may well exceed the imagination of all explorers.
Prior to a brand-new technological cycle, the probability of success in almost all startups in China is actually much higher than the probability of failure because the exploration of technological models has already been completed elsewhere.
For instance, in the ascent to a new peak, a feasible path has already been explored, and what remains is only how to ascend more efficiently and on a larger scale.
It cannot be denied that, compared to originality, what has primarily put us ahead before is operational capability.
This is also the typical and representative significance of TuSimple's future.
As a company, it has not escaped the complexity of human beings or the organization, relying on dreams to become stars, but with the development of time, place, and people, it ultimately cannot escape the fate of falling stars.
As an innovative practice in a brand-new technological cycle, especially in the exploration of originality in China, whether it is good or bad, heroes should not only be judged by the final success or failure.
The case of TuSimple's future is worth more research, worth being studied by every Chinese company with technology dreams, and worth being studied by every "China-based" global company.
