TuSimple, a company known for its self-driving truck technology has agreed to a $189 million settlement over allegations of misleading shareholders. The company was accused of overstating its safety record and hiding insider involvement with a Chinese competitor.
The settlement, which is still awaiting approval from a federal judge, was filed in a San Diego court. The lawsuit accused TuSimple of overstating the safety of its technology and hiding the fact that three insiders had control over Hydron, a Chinese trucking rival. The accusations came to light after a report by The Wall Street Journal highlighted safety concerns following a crash on an Arizona freeway in April 2022.
TuSimple, along with its founders, executives, and bank underwriters, denied any wrongdoing but agreed to the settlement. The company has already paid $174 million into an escrow account, with its insurers contributing an additional $15 million.
This legal trouble comes on the heels of TuSimple’s delisting from Nasdaq in January, less than three years after its initial public offering (IPO), which raised $1.35 billion. The company’s shares, once valued at $40, now trade at just 20 cents on the Pink Sheets.
“Investors were misled about the true state of TuSimple’s technology,” a source close to the case said. “The rush to deploy driverless trucks without fully addressing safety concerns was a major issue.”
The legal team representing the shareholders is expected to seek up to 25% of the settlement, approximately $47 million, as compensation for their efforts.
The case, titled Dicker et al v. TuSimple Holdings Inc. et al, continues in the U.S. District Court for the Southern District of California.
The history of TuSimple
Founded in 2015 by Xiaodi Hou and Mo Chen, TuSimple initially operated out of facilities in Beijing, China, and San Diego, California. Over the years, the company has established partnerships with major industry players, including UPS, ZF, and Navistar, to develop and commercialize autonomous trucking technology. Despite its achievements, TuSimple has faced challenges, including a significant reduction in stock value and restructuring efforts that saw a quarter of its workforce laid off in 2022.
In 2023, TuSimple announced that it would be moving its operations to China and is currently seeking a buyer, with a valuation of $229 million. The company also completed a series of fully autonomous semi-truck runs on public roads in China and Japan, further solidifying its position as a leader in the autonomous trucking industry.
Six things to know about TuSimple:
1. Self-driving trucks:
In the summer of 2023, TuSimple achieved a significant milestone by completing China’s first fully autonomous semi-truck journey on public roads. The journey was completed without any human on board, marking a major step forward in the company’s autonomous technology. During the same period, TuSimple also began testing its SAE Level 4 autonomous trucks in Japan, signalling a major leap in global expansion and technological advancement.
2. Superior logistics solutions:
TuSimple is transforming freight transportation with its cutting-edge self-driving technology. The company provides reliable autonomous capacity as a service, improving safety, reducing fuel consumption, and minimizing the environmental impact of heavy-duty trucks. TuSimple’s technology is designed to address critical challenges in the logistics industry, such as truck driver shortages and operational costs.
3. Improving safety on the road:
Safety is at the core of TuSimple’s mission. By integrating advanced sensors and AI, the company aims to significantly reduce the risk of accidents and enhance the overall safety of road transportation.
4. Solutions for truck driver shortages:
TuSimple’s autonomous technology addresses the growing shortage of truck drivers by providing a reliable alternative that can operate around the clock without the need for human intervention.
5. Fuel efficiency and reducing carbon footprint:
TuSimple’s autonomous trucks are designed to optimize fuel efficiency, leading to a reduction in fuel consumption by 10% to 20%. This not only lowers operational costs but also contributes to reducing the carbon footprint of the trucking industry.
6. Lower operational costs:
By leveraging autonomous technology, TuSimple helps businesses lower their operational costs. The reduction in fuel consumption, coupled with the ability to operate vehicles continuously without the need for rest breaks, leads to significant savings.
Read more on Waymo expands self-driving taxis to more neighbourhoods in California
