[ad_1]
As the first self-driving taxi service provider, WeRide aims to be valued at US$5 billion, but it also faces a series of challenges.
On August 9, Chinese autonomous driving startup WeRide announced plans to go public on the Nasdaq in the United States, with a valuation of $5.02 billion. The company, known for its driverless taxis, trucks, buses and street sweepers, aims to raise $119.4 million through its IPO, issuing 6.45 million deposit shares at a price of $15.5 to $18.5.
In addition, some investors have agreed to purchase WeRide shares worth $320.5 million in a concurrent private placement. These include Alliance Ventures B, the venture capital fund of Renault-Nissan-Mitsubishi Alliance, and JSC International Investment Fund SPC. German automotive supplier Robert Bosch has also expressed interest in purchasing approximately $100 million of WeRide shares in the IPO.
WeRide, which is targeting a valuation of $5 billion, is a startup that was founded only seven years ago. The company was founded in 2017 by Han Xu, former chief engineer of Baidu’s autonomous driving car division, and a team of artificial intelligence experts. They focus on developing autonomous driving car solutions for major cities in China.
WeRide WeRide stands out in the industry by developing Level 4 (L4) autonomous driving technology that complies with the SAE International global standard. To make it easier to understand, most smart cars in China are classified as L2 or L2+, which requires the driver to remain alert and ready to intervene at any time.
At Level 3, the driver can take their hands off the steering wheel and their eyes off the road in certain traffic conditions. At Level 4, the vehicle can operate without human intervention in most situations.
Passengers use a robot taxi service in Beijing. Image: WeiTeng
In November 2018, WeRide, which had just celebrated its first anniversary, launched China’s first self-driving taxi (robotaxi) in cooperation with Guangzhou Baiyun Taxi Group. In 2019, the country’s first commercial Robotaxi service officially welcomed customers in Guangzhou. WeRide then expanded to more cities and began testing the self-driving functions of buses, trucks and even street sweepers.
To use WeRide’s robot taxi service, customers can book a car through the app and find out the fare in advance. When the robot taxi arrives at the pick-up point, passengers need to verify their identity by scanning a QR code before getting on the car. The car can carry 1-3 passengers at a time and operates from 9:00 am to 5:00 pm, traveling to and from popular destinations such as subway stations, residential areas, shopping malls, and office buildings.
WeRide is in a leading position in the industry. In June 2021, when WeRide first tested Robotaxi in Guangzhou and Zhengzhou, WeRide received a $310 million investment from the Renault-Nissan-Mitsubishi Alliance and the China System Reform Fund, with a valuation of $3.3 billion. Subsequently, it received additional strategic investment from GAC.
To date, the startup is testing and piloting commercial operations in 30 cities across 7 countries. Their main international market is the UAE. In November 2021, they launched their robotaxi service on Yas Island and Saadiyat Island in Abu Dhabi. By the end of last year, the service had completed nearly 20,000 flights.
In early July 2024, the UAE Prime Minister issued the UAE’s first autonomous vehicle testing license to WeRide. This is the first national autonomous vehicle service license in the Middle East and even the world. So far, the startup has obtained autonomous driving licenses in mainland China, the United States, the UAE and Singapore.
However, WeRide’s development path has not been smooth. So far, Chinese self-driving car companies have been losing money. WeRide itself admitted this in its prospectus. Due to high R&D costs, they had a net loss of RMB 1.9 billion ($262 million) last year, up from a loss of RMB 1.3 billion in 2022. Revenues reached RMB 401.8 million last year, down 24% from 2022.
In the first half of this year, revenue continued to decline and losses continued to expand. Specifically, the company reported revenue of RMB 150.3 million for the six months, compared with RMB 182.9 million in the same period. Net losses increased to RMB 881.7 million ($123.04 million) from RMB 723.1 million in the same period.
WeRide’s revenue mainly comes from the sales of L4 vehicles, as well as L4 support services and advanced driver assistance services. YicaiFounder Tony Han said that he will continue to make technological breakthroughs and expand the market to enhance investor confidence and mobilize capital.
“Secondly, it is important to achieve (cash) self-sufficiency. This includes maintaining customer value, positive cash flow, focusing on capital gains and ensuring profitable growth,” he said.
The next challenge is legal. The company warned in its prospectus that it faces “many legal and operational risks and uncertainties” in mainland China. Foreign markets won’t be easy to conquer, either.
While China has given the green light for robotaxi trials, the Biden administration is expected to propose a ban on the use of Chinese software in self-driving cars in the U.S. The country is also wary of the service, revoking the license of General Motors’ robotaxi unit last year.
Singapore Prime Minister Lee Hsien Loong and WeRide founder and CEO Tony Han riding in the company’s self-driving bus. Image: WeiTeng
Tony Han admitted that no mode of transportation is 100% safe. He said it takes time to be accepted, just like the transition from horse-drawn carriages to cars. Initially, cars were considered less safe, but this was ultimately proven not to be the case.
“We should compare the accident rates of human-driven cars and self-driving cars. Preliminary data shows that self-driving cars are safer. We are at a turning point for self-driving cars,” said Tony Han, who expects the service to be more acceptable between 2025 and 2028.
It’s not just regulatory issues that are causing headaches. WeRide in particular faces stiff competition from a range of Chinese rivals. At least 19 cities in the country are testing robot taxis and self-driving buses (robobus). Among them, seven cities have approved L4 pilots for at least five industry leaders, including WeRide, Apollo Go, Pony.ai, AutoX, and SAIC.
These are all startups with major backing. AutoX is backed by Alibaba and operates in cities including Beijing and Shanghai. Apollo Go announced in May that it plans to deploy 1,000 robotaxis in Wuhan by the end of the year. Pony, backed by Toyota, operates 300 robotaxis and plans to add 1,000 more by 2026.
Augustin Wegscheid, CEO of consulting firm Boston Consulting Group, said the licensing rate for robotaxis in China is growing rapidly. In the United States, only Alphabet’s Waymo is the only company operating commercial robot taxis, with about 700 vehicles in San Francisco, Los Angeles, Phoenix and Austin, Texas.
But the rapid development of Robotaxi in China also faces some concerns about social and employment issues. Currently, there are 7 million drivers registered to drive service vehicles in the country, compared with 4.4 million two years ago. In difficult economic times, the driving profession has saved some people, but robot taxis can “take away” their jobs.
Last month, job losses caused by robotaxis became a hot topic on social networks, with people asking the question “Will driverless cars take away taxi drivers’ jobs?” In Wuhan, driver Liu called self-driving taxi company Apollo Go “stupid carrots” – a joke on the local brand name – and said it caused traffic jams. Driver Wang Guoqiang, 63, believes that drivers are the lowest level of jobs. “If the industry is destroyed, what else can they do?” he said.
Still, economists say automation could benefit China in the long run as its population shrinks. Mr. Han is even optimistic about WeRide’s central role in the vision of self-driving cars serving humanity.
“I envision a future where self-driving cars become ubiquitous. At that point, driving might become a skill, like horse riding or calligraphy today – a hobby rather than a necessity. It could free up time for individuals and improve people’s lives,” he said.
Bian An （According to Reuters. South China Morning Post, China Business News)
[ad_2]
Source link
