There is no shortage of stories in autonomous driving circles.
After experiencing a series of turmoil such as the collapse of stock prices, infighting in management, and the departure of soul figures, Tucson Future Technology Co., Ltd. (referred to as "Tucson Future"), which is regarded as a belief by top talents in autonomous driving, can finally stop engaging in people and do things well.
In 2016, Hou Xiaodi and Chen Mo, who were in their early thirties, because they valued the global truck freight market with $4 trillion, the two Chinese guys hit it off, set L4 driverless as the direction of entrepreneurship, and registered Tucson Future in Delaware, USA.
Unlike Baidu, which invested tens of billions and was the first to do automatic driving, Tucson Future is a typical start-up company, with no fame in China and no capital. But at that time, there were comments in the industry that "low-cost solutions and local government policy support may allow the world's first company to commercialize self-driving trucks born in Tucson and Baidu", which shows its technological influence.
So, what does the L4 driverless that Tucson aspires to run through?
The American Society of Motor Vehicle Engineers divides autonomous driving technology into five levels: the system mainly plays an auxiliary function at the L1-L3 level; Starting from level 4, as long as the speed does not exceed a certain value and the driving area is relatively fixed, the departure place and destination are entered before the vehicle is driving, and the whole process can be done without any operation by the driver.
That sounds like tens of thousands of truck drivers are losing their jobs.
But Hou Xiaodi and Chen Mo have researched that truck drivers in the United States have long been in short supply, and the biggest expense of truck companies every year is to pay drivers. Reducing dependence on human drivers has become a demand for major transportation companies, and Tucson sees the possibility of technology monetization in the future.
However, to apply this technology to practical scenarios, ensuring zero accidents per mileage, like many startups, Tucson will have to burn a little more money in the future.
In the early days of entrepreneurship, Chen Mo and Hou Xiaodi had a clear division of labor, one responsible for financing and the other in charge of technology and other affairs. As of February 2021, Tucson Future has completed 10 rounds of financing, which brings together investors such as Sina Weibo Fund, Zhiping Capital, NVIDIA, and CDH Baifu.
Capital wanted this "unicorn" to attract money as soon as possible, but Hou and Chen were not familiar with the listing process, so the investor recommended Lu Cheng, who had a background in the financial industry. In order to smoothly promote the listing, Lv Cheng assumed the position of CEO. In April 2021, Tucson Future landed on NASDAQ and became the world's "first autonomous driving stock".
Three men, a grudge, and it began.
On March 10, 2023, Beijing time, Hou Xiaodi left a long string of articles on social platforms, officially bidding farewell to Tucson Future, which he founded single-handedly, and his only connection with the company now is the identity of shareholders.
However, two weeks after completely retiring from the board, Hou Xiaodi is still under investigation by the current board of directors, including Chen Mo (Tucson's future chairman) and Lu Cheng (Tucson's future CEO and president), for allegedly digging the company's "wall foot".
On March 13, Tucson Future issued an announcement that the company received a notice of Hou Xiaodi's resignation from the company's board of directors on March 9, and the resolution took effect immediately. Meanwhile, the company is investigating Mr. Hou and some of Tucson's future employees as they plan to set up a new startup.
An employee of Tucson Future China (Tucson China) told the city that the management told them that the recent discouragement of the North American team and the slow progress of the business were because Hou Xiaodi planned to start his own business, instigated colleagues to be passive, and tried to poach the company's employees, but this behavior was discovered by the company's management, and the legal team was also involved in the matter.
For this statement, Liu Feng, an old friend of Hou Xiaodi, said that Hou Xiaodi was disappointed in human nature at its peak before deciding to leave. "He has no plans to start a business again in the short term, and just interacting with you and me with Tucson's current management is enough to consume his current energy, so the charges of poaching and instigating are untenable."
On March 15, Mr. Hou publicly responded that he believed the company's investigation of him was biased and unfair, and that management blamed itself for low morale because of his doubts about the company's technological direction, Christmas Eve layoffs, and opposition to the CEO's high salary. He bluntly said in the article that Tucson employees, who once had a sense of mission for driverless trucks, are being shrouded in threats and intimidation.
Investigation, accusation, and suspicion tore apart the last bit of decency between Hou Xiaodi and Tucson's future top management.
▲ (Source/Screenshot of Tucson's future announcement on March 13)
Interestingly, the two sides have their own opinions, and the attitude of Tucson's North American team and Chinese team is also clear.
North American employees generally do not believe that Hou Xiaodi will get employees to leave, "Even if you really recruit people, it is impossible not to let people work well, and Hou Xiaodi's character and sense of mission to Tucson do not allow him to do so." ”
But Chinese employees don't have much sense of Mr. Hou himself, preferring to trust management's message. Wang Ye, an employee of Tucson China, told "City Boundary" that Hou Xiaodi has been in the United States since the company's founding, and he is more like a spiritual symbol for the Chinese team, and the real management of the business in China is Chen Mo and Tucson China CEO Hao Jianan.
At present, the separation of the North American team has been "stamped" by Tucson's future management. But Wang Ye feels that these are not important, "There have been too many rumors and rumors in the company recently, many of which cannot be verified, and we should just discuss it as gossip." ”
It seems that the trust of the Chinese team in the management is more a tacit understanding of employees after weighing the pros and cons.
Wang Ye said that in the past two years, high-level infighting has consumed a lot of vitality of the company, and some benefits have been downgraded, but employees' wages have not been worse. And regardless, Tucson is still in the first echelon of autonomous driving, and he still has a lot to learn. No matter how far the company goes in the future, those of them who depend on technology for food are not afraid of not finding a good job.
Not long ago, Hao Jianan said in an interview with the media that in fact, as early as before the company's listing, due to the outbreak of the epidemic in 2020, the communication between China and the United States was reduced, coupled with the different road conditions and policies and regulations of the two places, the two teams' autonomous driving projects began to adopt different solutions and technical capabilities when landing.
"Although the technology between Tucson's future teams in China and the United States is homogeneous, there have been differences in the priorities and focus of research and development for a long time." According to Hao Jianan, at the end of 2021, due to the US government's CFIUS regulatory requirements that Tucson reduce technical communication between China and the United States in the future, since then, all technologies in Tucson China have begun to be completely independent and self-developed.
Based on this, he believes that Hou Xiaodi's departure has no substantial impact on the business in China, "The company has not lost core executives and technical backbones in the Chinese team in the past year. ”
right and wrong
In the view of Liu Feng, who is familiar with Hou Xiaodi, Hou Xiaodi's departure is absolutely unbearable. Since he returned to the board last November until his recent departure, he has completely lost his voice within the company and has been hung up as a director, "He thought it was just a temporary arrangement, but he didn't expect that four months had passed, and he didn't wait for the CTO position promised to him before." ”
Therefore, for Tucson's future investigation of Hou Xiaodi, Liu Feng believes that it is not in line with the normal process, "first, there is no charge, and second, there is no corresponding evidence." This is no longer a problem for him to be erected, it feels like he is being maliciously targeted. ”
Once, Hou Xiaodi and Chen Mo, two young people with entrepreneurial ideas, came together, but after Lu Cheng joined, the company had more money, and people and things were much more complicated.
An industry insider who has dealt with Tucson's future founding team told "City" that in fact, Hou Xiaodi was already dissatisfied with Lu Cheng, dissatisfied with his management ability, and dissatisfied with his bureaucratic style. Hou Xiaodi believes that Lu Cheng's various behaviors are contrary to his own values and beliefs and that of the company.
"Maybe Lu Cheng spends more generously, and uses public funds to reimburse many things, but Hou Xiaodi feels that startups always have to have a sense of hard work." The company's internal affairs were quite chaotic under Lu Cheng's management, and it also made Hou Xiaodi realize that Lu Cheng's rights might be beyond a safe range. Industry insiders said.
Whether Hou Xiaodi, who was the CTO at the time, had an open and honest chat with Lu Cheng about these dissatisfactions, we do not know. From a factual point of view, in March 2022, Lu Cheng left Tucson. It is said that this was Hou Xiaodi's suggestion, which was supported by Chairman Chen Mo and investors at the time. In June of the same year, Chen Mo, as an independent director, also voluntarily left the board of directors of Tucson Future.
For Chen Mo's departure, the official version is that he established the Turing Smart Card "English name Hydron" in China in 2021, because of the overlap in business with Tucson in the future, and staying away from the board of directors is to avoid suspicion.
With both Lu Cheng and Chen Mo out, Hou Xiaodi took up the burden of CEO and President and took over as Chairman of Chen Mo's board of directors. At the time, he was included on the board of directors, Brad Buss, Karen C. Francis, Michelle Sterling and Reed Werner, all outside independent directors.
But Hou Xiaodi did not expect that the days of being in power alone would be even more difficult, and trouble would follow.
First, in mid-2022, the US government department received intelligence that suspected Tucson of secretly sharing confidential technology with Turing Smart cards in the future, resulting in the company being investigated.
Then, on August 1, 2022 Eastern Time, the Wall Street Journal released exclusive news that in April 2022, a truck equipped with Tucson's future self-driving technology suddenly turned left on the I-10 highway in the United States and hit a concrete barricade on the side of the road.
Two months later, the same reporter for the Wall Street Journal reported that Hou Xiaodi was being investigated by the FBI, SEC and CFIUS at the same time.
According to Liu Feng's understanding, this report is completely fake news. On the day the above report was published, Tucson's future board of directors immediately voted to remove Hou Xiaodi. He felt that this was more like a premeditated "forced palace".
At the end of October 2022, Hou Xiaodi was deposed. The infighting of Tucson's future management has officially entered its climax.
Ten days later, Hou Xiaodi found Chen Mo and Lu Cheng, and the three jointly used their super voting rights to temporarily form an alliance and purge the board of directors. Hou Xiaodi paid a heavy price for this: on November 10, 2022, he handed over all management rights and super voting rights of the company, Lv Cheng returned to the CEO position, and Chen Mo remained the chairman.
According to foreign media reports, as one of the conditions for his return, Lu Cheng received a compensation package, and if he was terminated without reason in the future, or the control of the company changed, he would receive a compensatory salary of $15 million.
How high is this price? From Tucson's future revenue, the company's annual revenue in 2021 was $6.26 million, and its revenue in the first three quarters of 2022 was $7.51 million.
In the half a year that Hou Xiaodi has been in power alone, what has happened that caught his relationship with Chen Mo and Lu Cheng off guard so much? It is estimated that only the parties concerned will know the reason.
Recently, it has been rumored that Tucson's future North American team is ready to find sellers to sell its business after completing the L2 autonomous driving project demo. Industry insiders told City Boundary that after the sale of the business, the company's control may change.
Tucson China, which was rumored to be acquired by Geely for $1 billion, also took the initiative to distance itself from the North American team, eager to get rid of the influence of various rumors.
Hao Jianan said that Tucson China started the hardware business of providing OEMs with domain controllers and core components in addition to the Level 4 autonomous driving solution business, as well as providing OEM services with assisted driving technology.
Wang Ye could see that the company wanted to make money.
In the past year, Tucson's future market value has lost more than 90%, and so far this year, the company's market value has continued to lose more than 10%. How did the once "first stock of autonomous driving" become the talk of the circle after tea?
Politics, power, money, and human nature are all important elements that make up this feud.
In the first four months of landing on the NASDAQ, Tucson Future's share price nearly doubled from the offering price of $40 per share, and its market value once exceeded $16 billion.
At that time, in media reports, Hou Xiaodi was a young genius, Chen Mo was an experienced serial entrepreneur, Lv Cheng was a financial talent with a brilliant resume, and Hao Jianan and Wang Naiyan (current CTO of Tucson China) were all young and famous technology gods in the circle.
This star-studded startup group has created a number of firsts in the industry: in September 2016, the computer vision and deep learning algorithms developed by Tucson Future Internet won the world's first place in the world's most authoritative and influential public ranking of autonomous driving algorithms, KITTI and Cityscapes evaluation datasets; In 2018, Tucson Future obtained the country's first driverless truck public road test license.
In the listing prospectus, the company's business model is divided into two types: first, Tucson uses its own driverless fleet operating in the driverless network to provide shippers with driverless freight services calculated by mileage; The second is to cooperate with carriers, Tucson provides autonomous driving technology services.
By then, Tucson had developed fully integrated software and hardware solutions, which are considered the world's most advanced L4 driverless autonomous semi-truck technology. Tucson defines himself this way: an autonomous technology company that is revolutionizing the estimated $4 trillion global trucking market.
Only, such glorious days did not last long. A report from a short-selling agency in August 2021 gradually amplified the differences between Tucson Future and investors in terms of technology leadership and commercialization.
The short report focuses on questioning the reasonableness of the company's revenue forecasts, such as that the vast majority of orders do not bring any cash to the company, and that these orders can be canceled unconditionally in the future.
As soon as the news came out, Tucson Future's stock price fell by more than 50% in a few days.
At the end of the same year, Tucson Future completed the driving from Tucson, Arizona, USA, to the vicinity of Phoenix, for more than 80 miles without safety personnel and any human intervention, which is considered by the industry to be a feat in the history of global unmanned freight and even global unmanned development.
However, on the day of the successful drive, Tucson Future's stock price fell by 9.2%. The short report is only a magnifying glass, although Tucson has proved its technical strength, but has not proved its ability to commercialize and monetize, which is exactly what capital cares about most.
In the view of Gong Qing, a person in the autonomous driving industry, when the capital market is optimistic, earnings in the US stock market is not a harsh financial indicator, as long as the listed company can present a reasonable business model and a large enough market, the attitude of the US stock market is friendly and inclusive. "In recent years, the global economy has taken a sharp turn, coinciding with the sensitive period of decoupling between China and the United States, whether it is Chinese concept stocks or technology stocks, it is the original sin not to make a profit."
Tucson's future financial report shows that in the first three quarters of last year, the company accumulated a loss of $334 million; as of September 30, 2022, the company held cash, cash equivalents and restricted cash of $873 million, compared with $1.414 billion in cash, cash equivalents and restricted cash held in the same period last year.
To realize his dream of changing the global trucking market, Tucson will have to learn to make his own blood in the future.
However, at present, there is no perfect case for autonomous driving to achieve commercialization. Moreover, the world's Internet giants and technology giants are still cutting these businesses in the exploration period, and capital has even given up the unmanned driving that commercialization is far away.
In October 2022, Argo AI, an autonomous driving startup that had been valued at more than $7 billion and was preparing to go public, came to an end. Argo AI released a statement saying that Ford Motor Co. decided it needed to invest in driver assistance technology that is more achievable in the short term, rather than Argo's goal.
And with Tucson's future listing, the American self-driving truck freight star company Embark was recently abandoned by capital and officially declared bankruptcy. The company's founders said in their severance letter: "Capital has abandoned us, we are sorry that we cannot raise funds at this time." ”
It's also hard to have a hard time, and Waymo, the self-driving technology subsidiary of Google's parent company Alphabet. Although it has the halo of "rich second generation", the company has also opened the second round of layoffs this year, and most of them are technical positions. Waymo said the layoffs were made to "focus on commercial success."
"City" learned that in addition to layoffs and bankruptcy, there are already some companies that focus on L4 and have begun to do L2 autonomous driving to better commercialize.
Observations by financial investment consulting firm Renevo Capital also confirm this phenomenon. Since 2022, more autonomous driving companies have adopted a pragmatic approach, partnering with automakers to focus on mass-producing autonomous driving solutions and generating cash from this business, rather than directly targeting disruptive autonomous driving solutions.
There are also some companies that develop L2 and L4 technologies at the same time, betting on both sides. For example, Pony.ai also lays out three front-end business segments: autonomous driving services, autonomous trucks and passenger car assisted driving business. The company also said that the passenger car assisted driving business will become one of the core development drivers of Pony.ai in the future.
Of course, there is Tucson Future who chooses a similar route.
Gong Qing said frankly that in the basic laws of science, L4 level unmanned driving will definitely be realized, but now people are more concerned about when it will be realized.
(Wang Ye, Liu Feng, and Gong Qing are pseudonyms in the text)
Author | Liu Dongxue
Edit | Tian Yanlin