Baidu’s robotaxi unit expects to turn profitable next year

Shanghai — The Apollo Go robotaxi division of Chinese internet giant Baidu announced on Wednesday that it plans to generate a profit in 2019.

The estimate is made at a time when Elon Musk has made it clear that, in spite of declining sales, he intends to expand Tesla’s robotaxi endeavors.

One of the leading companies in China’s emerging robotaxi business, Baidu, has been granted permission by a district in Beijing to start collecting fares in November 2021.

In September 2023, the same Beijing district officially allowed Baidu and startup Pony.ai to charge rates for robotaxi rides without staff members inside the vehicle, even if the majority of the cars still had human staff workers inside for safety.

In the final three months of 2023, Apollo Go conducted approximately 839,000 rides, according per Baidu’s most recent earnings report. On Thursday, the business is expected to report its quarterly results.

According to the business, almost 45% of Wuhan’s orders in the fourth quarter were entirely driverless, up from 40% in the previous quarter.

Baidu is lowering the cost of the automobiles in addition to increasing utilization and decreasing labor costs each ride.

Apollo’s sixth generation robotaxi, which Baidu launched on Wednesday, will cost about 200,000 yuan ($28,169), which is less than half of the previous iteration’s price, the company claimed.

Baidu intends to roll out 1,000 of those sixth-generation robotaxis in Wuhan this year. The business now runs several vehicles in Wuhan without the need for human personnel.

In a news release, Baidu stated, “With declining costs and rising orders, Apollo Go’s unit economics (UE) is approaching break-even, anticipated to achieve balance in the fourth quarter of 2024 and turn profitable by 2025.”

On the website of the China Securities Regulatory Commission in late April, rival robotaxi provider Pony.ai stated that it was getting ready to go public outside of mainland China.

Some in the auto industry are still less convinced about fully autonomous vehicles, which need widespread governmental approval to run.

According to Xpeng Vice Chairman Brian Gu, the robotaxis industry won’t become a viable business for at least five years, he told reporters last month.