The first batch of pilot licenses for unmanned vehicles commercialization is here. Yesterday, Baidu and Pony.ai successively announced that they had received the first batch of pilot notices for the commercialization of "unmanned in the car and remote outside the car" travel services for passenger cars in the Beijing Intelligent Connected Vehicle Policy Pilot Zone, and were allowed to start charging for the in-car unmanned autonomous driving travel service (Robotaxi) in Yizhuang, Beijing. They will subsequently carry out commercial pilot charging for fully unmanned autonomous driving in the pilot area.
So, how many hurdles do companies need to overcome if they operate through this business model?
How difficult is it to make a return on operations?
In fact, in the past two years, pilot work on the commercialization of autonomous driving has made progress. As early as November 2021, the Beijing Intelligent Connected Vehicle Policy Pilot Zone released the "Implementation Rules for the Commercialization Pilot Management of Autonomous Driving Travel Services in the Beijing Intelligent Connected Vehicle Policy Pilot Zone (Trial)" and issued the first batch of domestic autonomous vehicle charging notices to some companies, starting the commercial operation charging pilot work in the domestic autonomous driving industry for the first time.
At that time, Baidu Apollo received China’s first autonomous driving charging order. In the following years, Shanghai, Guangzhou, Shenzhen, Wuhan and other places have successively launched pilot trials for commercial charging of autonomous driving.
Among them, Beijing has carried out several self-driving pilot toll operation licensing activities for different pilot areas and companies. Baidu, Pony.ai and other companies have received self-driving commercial licenses many times. On July 7 this year, the Beijing Autonomous Driving Office also announced that it would open a commercial pilot for "no one in the car" for intelligent connected passenger cars in Beijing, officially entering a new stage of commercial pilot for "no one in the car" for autonomous driving.
According to previous announcements, companies can provide regular self-driving paid travel services to the public in Beijing's high-level self-driving demonstration zones after meeting the corresponding requirements. Today, with Baidu and Pony.ai announcing that they have officially obtained the first batch of commercial pilot licenses for driverless autonomous driving in Beijing, the road to commercialization of autonomous driving has taken another step forward.
However, being approved to carry out fully unmanned autonomous driving pilot charging does not mean the arrival of the era of large-scale commercialization of fully unmanned autonomous driving.
In a self-driving ride experience survey initiated by Sina Technology, 55% of the users who participated in the vote said they would not ride in self-driving cars in the short term. Even among users who have already ridden autonomous driving, more than 36% of users have weak willingness to ride autonomous driving again and cannot fully accept this mode of travel.
This shows that in the process of promoting the commercialization of autonomous driving, user acceptance and changes in usage habits are still a major factor limiting the commercial development of autonomous driving.
In addition, at the technical level, due to scenario limitations, although the cost of autonomous driving technology has dropped to close to forming a commercial closed loop in subdivided scenarios, such as unmanned sweepers and unmanned driving in mining areas, L2+++ scenarios represented by high-speed NOA functions, and urban NOA etc., have also been implemented since the end of last year. However, because the implementation of autonomous driving in urban areas is facing higher complexity and more accidents, currently the autonomous driving road test permissions in core urban areas across the country have not been opened. Commercial implementation in these areas will also be further elusive.
In the communication with Sina Technology, Hong Zexin, an excellent respondent on Zhihu Autonomous Driving, commented that "further policies to allow commercialization may not necessarily be a good thing for some autonomous driving companies. Because whether it is a mule or a horse, you will know it now."
Hong Zexin pointed out that in terms of cost, the current cost of mass production of 10,000 units of Baidu's sixth-generation unmanned vehicles is 250,000. This is a node that can support large-scale operations. In other words, only by applying a density of 10,000 units of unmanned taxis can it be profitable.
However, the hardware costs of the self-driving models currently in operation in the domestic market are still between RMB 500,000 and RMB 600,000 (excluding license plates and insurance). It is difficult to recover the cost through operation in the short term. Moreover, in terms of user needs, if self-driving positioning unmanned taxis can actually only operate within a region, it will definitely not be able to fully meet user needs. After all, it will still be a long time before self-driving operating vehicles reach the scale of 10,000 units.
(Drawing: Sina Technology Note: Statistics are as of August 30, 2023)
Small abacus for getting together for listing
It is undeniable that since the Beijing Autonomous Driving Demonstration Zone promulgated a policy in 2021 to allow autonomous vehicles to provide travel services to the public, after more than two years of development, the autonomous driving industry has experienced three stages: "the main driver is occupied - the main driver is unmanned, and the co-driver is occupied - there is no one in the front row - there is no one in the car". Now it has reached the fully unmanned autonomous driving stage at the commercial exploration level.
"Autonomous driving travel services have initially opened up the closed loop of the fully unmanned commercial business model, and have begun to truly demonstrate the commercial value of autonomous driving to the society. This is the opening of the closed loop of the autonomous driving business model." Unfortunately, large-scale commercialization of autonomous driving is far more than just allowing pilot commercial use.
What’s even more serious is that at a time when large-scale commercialization of autonomous driving is far away, the global autonomous driving industry is currently entering a new stage of difficulty in survival.
Since 2022, commercial implementation has been difficult due to the difficulty in solving the "long tail problem" of autonomous driving. Investors lost interest and financing shrank significantly. According to public statistics, the disclosed financing amount has dropped sharply from 159.19 billion yuan in 2021 to 20.5 billion yuan, directly reduced to 13% of the original, and the industry has entered a cold winter.
Globally, ArgoAI, an autonomous driving unicorn with a valuation of US$7.3 billion, declared bankruptcy in October last year, and Tesla and Google's autonomous driving company Waymo have also launched multiple rounds of layoffs. Domestically, according to previous industry statistics, in the first half of 2023 alone, there were as many as 16 resignations of high-level personnel related to autonomous driving, including many senior autonomous driving business executives of well-known companies such as Huawei, Baidu, and Xpeng Motors.
Under the cold winter, most autonomous driving companies have set their sights on the secondary market and begun preparations for IPOs.
According to incomplete statistics from Sina Technology, as of August 30, 2023, 12 domestic autonomous driving and related industry chain companies have made clear or plan to launch listing plans. Among them, three companies submitted prospectuses or signed listing guidance agreements in August, two companies submitted prospectuses in June, and one company clearly submitted a prospectus in March, April, and May. In addition, Pony.ai, Momenta and Horizon, three unicorn companies in the field of autonomous driving, have all reported listing news this year, but have not received final confirmation from the companies.
It is worth noting that among the many autonomous driving companies that have started or are starting to go public, the vast majority are loss-making companies. Among the 12 companies counted by Sina Technology, there are 7 companies with clear financial report data showing losses, 3 companies that have not disclosed financial reports and unknown losses, and only 2 companies that have achieved profitability are Hitronics Optoelectronics and Sinan Navigation. Moreover, the main business of these two profitable companies does not exclusively serve the field of autonomous driving.
The commercial pilot work of fully unmanned autonomous driving has already begun, but for more autonomous driving companies, can the commercial revenue in the pilot area really be a drop in the bucket, and can it really solve the industry's financing difficulties and serious corporate losses?