TuSimple Co-Founder Cites CEO Pay and Autonomy as Reasons for Departure

TuSimple’s chairman and CEO, Hou Quanjian, wrote on LinkedIn that he believes the company’s investigation was retaliation for his disagreements over several decisions. According to Hou, this includes disagreements over the company’s direction and an alleged refusal to invest in new technologies. Hou claims that TuSimple’s chairman and CEO initiated the investigation as a way to silence him.

In response to ongoing accusations of poaching, Hou said he has not begun another venture and that it is illogical to accuse him of doing so.

Hou was elected by acclamation as the next chairman and CEO of TuSimple, after rumors of internal unrest surfaced. Hou’s election is a sign that the company is committed to stabilizing its operations and rebuilding relationships with employees. In his statement, Hou emphasized that he remains committed to his family at TuSimple, even while holding leadership positions in multiple businesses.

Hou alleges that TuSimple’s management has been harassing and threatening certain employees in their investigations into the company. Hou says that the intimidation tactics have forced some employees to leave the company, and preventing others from speaking out against TuSimple could have a disastrous impact on its reputation.

Prior to his resignation, Hou said that he was angry and frustrated over Cheng Lu’s “lucrative” compensation package, which was awarded to the executive within days of layoffs that wiped 25% of the company’s workforce. This payout caused many employees who had been laid off to feel devalued and betrayed by their former employer.

If fired without cause or if there is a change in control of the company, Lu would receive $15 million in severance pay.

The source claims that the company’s new board members, Wendy Hayes and Michael Mosier, joined the board after Lu and Chen changed the company’s governance in a way that would allow them to circumvent Hou’s vote against Lu’s compensation package. Hou was no longer on the board, so he wasn’t able to block it. This resulted in a $193,000 pay increase for Lu over what was originally agreed upon.

Hou believes that the shift in focus from level 4 autonomous driving to level 2 assisted driving is a mistake. He argues that level 4 autonomy is the ultimate goal and should be the focus of companies working on this technology.

Level 4 autonomy is one step closer to robots driving us around, but still requires the supervision of a human. It allows the system to drive itself within a geofenced area, but requires that the driver be aware enough to take back control if needed. Advanced driver assistance systems (ADAS) represent level 2 autonomy and allow for some automated tasks like lane assist and cruise control, but require that the human driver maintain most of the control over the vehicle. Level 3 autonomy is when a car can operate fully on its own with no input from a human, but has not yet been fully tested in real-world conditions.

TuSimple would require a massive upgrade in its systems if it ever decides to shift to Level 2, and this would likely put the company out of business.

TuSimple’s failure to secure a deal with Navistar leaves the company without a clear path to commercialization for its autonomous semi trucks. This setback could result in TuSimple falling through on its agreement with Navistar and losing the $160 million it had already invested into the project.

Although TuSimple plans to shift its focus away from L4, it is still very much focused on the technology. In May 2022, TuSimple will hold its analyst day presentation which will outline the company’s goal to produce L2+ ADAS in partnership with Nvidia. This indicates that TuSimple is still very much dedicated to developing L4 solutions.