SHANGHAI — Chinese tech company Baidu announced on Wednesday that its Apollo Go robotaxi division expects to achieve profitability by next year. This optimistic projection aligns with CEO Elon Musk’s heightened focus on expanding Tesla’s robotaxi initiatives amid a dip in revenue.
Baidu stands out as a prominent player in China’s burgeoning robotaxi sector. The company gained significant traction when a Beijing city district granted it permission to start charging fares in November 2021. This milestone marked the beginning of a new era in the autonomous vehicle market in China.
Initially, most of Baidu’s robotaxis operated with a human staff member on board for safety reasons. However, progress accelerated when the same Beijing district authorized Baidu and start-up Pony.ai to charge fares for completely driverless rides in September 2023. This regulatory approval was a significant step toward fully autonomous transportation.
According to Baidu’s latest earnings report, Apollo Go provided approximately 839,000 rides in the last quarter of 2023. This figure demonstrates substantial growth and increasing consumer acceptance of robotaxi services.
Baidu has reported a notable increase in the proportion of fully driverless rides. In the fourth quarter of 2023, around 45% of the orders in Wuhan were fully driverless, up from 40% in the previous quarter. This upward trend reflects the company’s successful efforts to enhance the safety and reliability of its autonomous vehicles.
In addition to improving safety and operational efficiency, Baidu is also focusing on reducing the costs associated with its robotaxi services. The company announced that the sixth generation of its Apollo robotaxi will be priced at approximately 200,000 yuan ($28,169). This cost is less than half of the previous generation, making the new vehicles more economically viable.
This year, Baidu plans to deploy 1,000 of these sixth-generation robotaxis in Wuhan, where it already operates several vehicles without any human staff. This deployment aims to further reduce labor costs and improve the overall economics of its robotaxi operations.
Baidu’s strategic initiatives and cost-cutting measures are expected to bring Apollo Go’s unit economics close to break-even. The company anticipates achieving balance in the fourth quarter of 2024 and turning profitable by 2025. This projection is based on the increasing number of orders and decreasing costs per ride.
| Metric | Value |
|---|---|
| Rides in Q4 2023 | 839,000 |
| Proportion of Fully Driverless Rides in Wuhan (Q4 2023) | 45% |
| Cost of 6th Generation Robotaxi | 200,000 yuan ($28,169) |
| Deployment Plan for 2024 | 1,000 6th generation robotaxis in Wuhan |
| Projected Break-Even | Q4 2024 |
| Expected Profitability | 2025 |
While Baidu is making significant strides, its competitors are also advancing their robotaxi operations. Pony.ai, a notable rival in the autonomous vehicle market, is preparing for a listing outside mainland China, according to the China Securities Regulatory Commission’s website in late April. This move indicates Pony.ai’s ambitions to expand its market presence and attract international investors.
Despite the progress made by Baidu and Pony.ai, other players in the auto industry remain cautious about the prospects of fully driverless cars. Xpeng Vice Chairman Brian Gu expressed skepticism, stating last month that he does not expect robotaxis to become a real business for at least five years. This sentiment reflects the broader industry’s concerns about regulatory hurdles and the technological challenges associated with achieving full autonomy.
Highlights of Baidu’s Robotaxi Expansion
- Regulatory Approval: Baidu received permission to charge fares for robotaxi rides in Beijing in November 2021.
- Driverless Operations: In September 2023, Baidu was authorized to offer fully driverless rides in Beijing.
- Operational Scale: Apollo Go provided 839,000 rides in Q4 2023, with 45% of rides in Wuhan being fully driverless.
- Cost Reduction: The sixth generation Apollo robotaxi is priced at 200,000 yuan, significantly reducing costs.
- Future Deployment: Baidu plans to deploy 1,000 new robotaxis in Wuhan in 2024.
Baidu’s Apollo Go division is poised to become a leader in the autonomous vehicle market with its strategic focus on cost reduction, operational efficiency, and regulatory compliance. As the company progresses towards profitability, it sets a benchmark for other players in the industry, navigating the complex landscape of autonomous transportation.
With increasing adoption and technological advancements, the future of robotaxis looks promising. However, the journey towards widespread acceptance and profitability will require continuous innovation, regulatory support, and a commitment to safety and reliability.
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Featured Image courtesy of Tech Times