China maneuvers for pole position in robotaxi race
Summary
China’s growing support for autonomous driving is giving robotaxi pioneers a leg up in some of the country’s biggest cities. Soon, these Chinese firms could be global leaders in a market potentially worth more than $100 billion.
China’s growing support for autonomous driving is giving robotaxi pioneers a leg up in some of the country’s biggest cities. Soon, these Chinese firms could be global leaders in a market potentially worth more than $100 billion, analysts say.
In recent weeks, the cities of Beijing, Shanghai and Guangzhou have moved to usher in the age of autonomous driving, inviting unsupervised driverless taxis onto their streets, extending testing zones, or issuing detailed proposals to build infrastructure and regulation for the budding industry. Shenyang on Saturday became the first city in China’s northeast Dongbei province to pledge to build new roads specially for driverless vehicles.
China now has more than 32,000 kilometers, or nearly 20,000 miles, of roadway open to a first generation of robotaxis, part of a push to invest in “new productive forces"—a catchphrase referring to high-tech industries—to drive growth at a time when business activity is lagging in the wake of a property sector collapse and other pressures.
That’s helping companies ranging from internet giant Baidu to local startups WeRide, Pony.ai and a dozen others bring driverless vehicles to China’s streets and onto stock exchanges from Shanghai to New York.
“It’s a turning point for China’s robotaxi industry," Bocom International analyst Angus Chan said, citing a “speeding up" of government policies and efforts to develop and commercialize robotaxis this year.
The technology isn’t ready for prime time, and some experts caution that investors are getting ahead of themselves in fueling gains in a handful of industry stocks in recent months. But the pace of policy change and China’s relatively high rate of electric vehicles—which are better suited to autonomous driving systems than traditional vehicles—have spurred optimism about the sector. Goldman Sachs recently estimated that the global autonomous driving industry could be worth more than $100 billion by 2030.
Goldman Sachs analysts think the wide-scale adoption of autonomous-driving tech is still “at least a few years away," but that commercial adoption, including in the form of robotaxis, could come sooner. “A global fleet of a few million commercial autonomous vehicles used for rideshare could be on the road in 2030," they wrote in a recent research note.
Baidu has a lead in large operations and consumer reach. The company’s testing grounds in the city of Wuhan are the largest such operation in China. There, its Apollo Go unit has a fleet of more than 400 driverless robotaxis that it plans to grow to 1,000 by the end of the year. Baidu is among a small group of listed companies, including Chinese state-backed Desay SV, AI giant Nvidia, Intel-owned Mobileye, Japan’s Renesas Electronics and Taiwan’s Quanta Computer, that Goldman Sachs recommends in the autonomous driving space.
More are on the way. Homegrown startup Pony.ai, which has nearly 300 robotaxis in China’s four biggest cities, in April got Chinese regulators’ approval to list in the U.S., while WeRide, which is testing cars in multiple cities in China, plans to raise up to $119 million in a New York offering. BYD-backed Horizon Robotics, which was valued at nearly $9 billion in its latest funding round, recently won Chinese regulatory approval to list in Hong Kong, where system-on-a-chip specialist Black Sesame recently raised about $122 million in an IPO.
Analysts say Chinese autonomous driving technology isn’t as advanced than Tesla’s self-driving system, which uses AI to train from videos and other inputs, whereas many others use traditional coding and programming. China has other advantages though, including the world’s largest EV marketplace.
EVs and hybrids typically come with advanced software that can integrate with autonomous driving tech more easily than traditional cars can, featuring electronic architecture that needs less wiring and makes over-the-air updates possible.
Chinese policymakers have been pushing an initiative to develop cars, roads and cloud services to facilitate autonomous driving. Building roadside sensors and using unified cloud systems to help cars make better decisions can cut costs for robotaxi makers, and help bridge the gap with more sophisticated vehicle technologies.
Analysts say the efforts could soon start bearing fruit. China last month named 20 cities for a pilot program to build infrastructure in support of autonomous driving, coming as companies’ vehicles racked up more than 120 million kilometers of testing experience.
John Zeng, director of Asian forecasting at consulting firm GlobalData Automotive, said Chinese companies are poised to take a global lead in driverless autos thanks to policy support, infrastructure building and the high prevalence of EVs.
“China has an advantage in pushing autonomous driving technologies faster than other countries," he said.
Write to Jiahui Huang at jiahui.huang@wsj.com
