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Xiaodi Hou co-founded autonomous-driving startup TuSimple a few years ago, but he just took over as CEO and chairman of the board March 3.
Why? Here’s what Hou – who wants to be an “evangelist” for the possibilities of autonomous freight – had to say about it.
“Who is the best person to lead this company? It’s me! Because I am a relentless decision-making machine who is backed by the technical background,” Hou told CNBC. “There has to be tighter integration of all different parts of the company” if it wants to achieve the next big milestone.
Hou’s elevation to CEO stunned investors, who sent shares down more than 20% on the news earlier this month, even though the company called it part of a “planned executive succession.” According to Reuters, the company had not brought up potential succession plans during its previous four earnings calls. Hou replaced Cheng Lu, who had led TuSimple since 2018.
Hou co-founded the company in 2015 with board member Mo Chen and Chief Operating Officer Jianan Hao. The company reported that it achieved fully autonomous freight delivery late last year. TuSimple calls the autonomous operation of a semi-truck without a person on board or controlling it remotely “Driver Out.”
“We have conquered some major problems and we’ve reached this milestone. This is a new chapter. People don’t really understand the technology,” said Hou, who previously served as chief technology officer.
“The other role of me being the CEO is really being the evangelist and telling the truth to the world about the hard problems of autonomy and also the realities that we’re facing.”
He added: “Many people, even the people who are in the industry, they’re trying to oversimplify some of the very complicated challenges.”
Autonomous vehicle stocks have fallen hard due to macro pressures on the market, according to Bernstein senior analyst David Vernon. TuSimple shares have fallen more than 60% year to date; Aurora Innovation more than 45%; Embark more than 25%.
In a January note, Vernon said autonomous trucking is coming, but the path to profitability and full commercialization is unclear: ”How long will it take? Long. Meaningful revenue is five to six years away if all goes well: the technology remains in validation stage; business models are a work in process; the regulatory framework is a vacuum; it will take time to prove reliability.”
TuSimple moves freight autonomously for some of the biggest names in freight including UPS, which has a minority stake in the startup, and rail operator Union Pacific. The company is also developing fully autonomous semi-trucks with Navistar that are scheduled to come off the assembly line by the end of 2024, but that timeline could change.
The company launched an IPO in April 2021. Since then, TuSimple has been focused on three goals: prove the safety, prove the efficiency and prove the scalability of autonomous driving. With “Driver Out” achieved, Hou says it’s time to unlock the cost savings of autonomous technology.
“We basically have presented to the world a complete system with a lot of safety and redundancy on it.” Hou said, “So we are focusing on reducing the operating cost per mile so that in the end, within the end the weekend we can compete with the virtual driver can compete with a human driver on the per mile basis. That’s the second phase.”
Xiaodi Hou will appear on Power Lunch at 2 p.m. ET Wednesday.