Xiaodi Hou, co-founder and CTO, TuSimple, takes center stage during the second day of the 2019 Web Summit at the Altice Arena in Lisbon, Portugal.
Vaughn Ridley | Sports file | Getty Images
Xiaodi Hou co-founded the self-driving startup TuSimple a few years ago, but just took over as CEO and chairman of the board on March 3.
Why? Here’s what Hou has to say – he wants to be an “evangelist” for the possibilities of autonomous transportation.
“Who is the best person to lead this company? It’s me! Because I’m a relentless decision-making machine that’s backed up by technical background,” Hou told CNBC. “There has to be a closer integration of all the different parts of the company” if the next big milestone is to be achieved.
Hou’s elevation to CEO stunned investors, who sent shares down more than 20% in the news earlier this month, even though the company called it part of a “planned executive succession.” According to Reuters, the company hadn’t raised potential succession plans during its previous four earnings calls. Hou replaced Cheng Lu, who has been driving 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 “Driver Out” the autonomous operation of a semi-trailer without a person on board or by controlling it remotely.
“We have overcome some major problems and have reached that milestone. This is a new chapter. People don’t really understand the technology,” said Hou, who previously held the position of Chief Technology Officer.
“My other role as CEO is to really be the evangelist and tell the truth to the world about the difficult problems of autonomy and also about the realities we are facing.”
He added: “A lot of people, even people who are in the industry, are trying to oversimplify some of the very complicated challenges.”
According to Bernstein senior analyst David Vernon, shares of autonomous vehicles fell sharply due to macroeconomic pressures on the market. TuSimple shares have fallen by more than 60% since the beginning of the year; Aurora Innovation over 45%; Board 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? Time. Hopefully, it takes significant revenue: the technology remains in the validation phase; business models are in the works; the regulatory framework is a vacuum; it will take time to demonstrate 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-trailers with Navistar expected to roll off the assembly line by the end of 2024, but that timing may change.
The company launched an IPO in April 2021. Since then, TuSimple has focused on three goals: demonstrating the safety, efficiency and scalability of autonomous driving. With “Driver Out” reached, Hou says it’s time to unlock the cost savings of autonomous technology.
“Basically we have presented to the world a complete system with a lot of security and redundancy.” Hou said: “So we are focusing on reducing operating costs per mile so that eventually, by the end of the weekend, we can compete with the virtual driver who can compete with a human driver on a mile basis. This is the second phase. ”
Xiaodi Hou will appear on Power Lunch at 2 p.m. ET on Wednesday.