Apollo, Baidu’s autonomous driving division, was founded in 2013. Since the beginning, the strategy to create Apollo as a multi-directional autonomous driving platform was to gain scale and data advantage. Baidu has partnered with OEMs to provide driving software, created a JV with Geely to manufacture smart cars by 2024, and unleashed robotaxis in five cities.
Management estimates by 2025, total cost of robotaxi miles will be lower than a taxi driven by a human. In June, Baidu introduced its fifth generation robotaxi, Apollo Moon, at an estimated cost of $75,000, one third the cost of competitor vehicles. Apollo Moon reduced the cost per mile by 60% from the previous generation and an average decrease of 62% in the first four prior generations.
By 2025, the intersection between the cost of manned vehicle and robotaxi will see an acceleration of robotaxis on the streets.
We continue to work very hard to drive down the cost of the robotaxi vehicles. It has just come down 60% for our fifth generation vehicle. And in the meantime, we are running more testing miles and taking more orders to learn from all kinds of cases and to improve our technology.
Based on our current projection, I think that by the year of 2025, we will cross the line, which means that the total cost of robotaxi ride hailing will be lower than manned vehicle ride hailing. And after that, I think that the scale will be able to grow much larger than it is today. And I think around that time, we should be able to report in a separate line. - Q2 2021 Earnings Call
China is filled with self-driving companies like AutoX backed by Alibaba, Didi, Pony.ai, and WeRide competing to get ahead. Baidu is still number one in autonomous driving in China and that is not reflected in its share price today.
TAM for robotaxi ride hailing in China will reach $224 billion by 2025. Baidu plans to roll out Apollo Go to 30 cities within the next two to three years and is currently operating in five cities today.
“The total addressable market for robotaxi ride hailing will reach US$224 billion in China by 2025, according to China Insights Consultancy, a market research and consulting company” - Q1 2021 Press Release
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