TuSimple, a startup that’s developing self-driving technology for heavy-duty trucks, has formed a global partnership with Traton Group, Volkswagen’s commercial vehicle unit, in a deal that takes its technology into Europe for the first time. Traton also invested an undisclosed amount in the San Diego-based company.
The companies say it’s the first such tie-up between a truckmaker and autonomous tech company in Europe and that they’ve already started a program to test TuSimple’s software, sensors and computing system in a small fleet of Scania brand trucks that will run “hub-to-hub” autonomous delivery routes in Sweden. TuSimple already runs revenue-generating routes in the U.S., between its truck depots in Tucson, Arizona, and Dallas. The Traton alliance is TuSimple’s second deal with a major truckmaker, following its recently announced production partnership with Navistar.
“This 100% cements our leadership in autonomous trucking,” Cheng Lu, TuSimple’s president, tells Forbes. “As of today, we have two out of five of largest (truckmakers) globally to be our investors and partners. … Not only (does Traton) have brands that they own outright, but they have partnerships with Hino in Japan and Sino Truck in China. They have the largest sourcing power as an OEM.”
TuSimple, begun in 2015 by computer scientist Xiaodi Hou when he was finishing his PhD at Caltech, has been a fast-mover in the race to get driverless semis on the road in a competition with companies including Waymo, the long-time leader in self-driving cars, and startups Embark Trucks and Kodiak. The company splits operations between units in the U.S. and China and, along with the development deals with Traton and Navistar, has the largest fleet of autonomous trucks on U.S. highways, with about 45 rolling across the Southwest and five more Navistar big rigs on the way.
“Innovative future technologies that provide additional value to our customers represent a key part of our strategy,” Traton CEO Matthias Gründler said in a statement. Beyond initial testing in Sweden, the company intends to expand use of trucks with TuSimple’s Level 4 self-driving system into Germany and across Europe.
The partnership comes as Traton also pursues a Navistar acquisition deal. The German company boosted its offer for the Lisle, Illinois-based truckmaker to $43 a share this month for the portion it doesn’t currently own, up from $35 per share offered in January. That raised the value of its total offer to about $3.6 billion.
Closely held TuSimple has raised about $300 million from investors including UPS, Nvidia NVDA , Chinese tech firm Sina Corp. SINA and Hong Kong’s Composite Capital. It recently opened a Series E investment round that Lu says may bring in an additional $300 million. Traton has an option to increase the minority stake it purchased in TuSimple, Lu said, without elaborating.
Since its start, TuSimple has focused exclusively on mastering long-haul trucking for the U.S. market–and hauling cargo from ports in China–because cofounder Hou determined it was a faster way to create a revenue-generating business. (TuSimple is also a standout member of Forbes’ 2020 AI 50 list of companies to watch.)