China's Robotaxi Ventures Overseas: A Global Market Race Filled with Challenges and Opportunities

China's Robotaxi Ventures Overseas: A Global Market Race Filled with Challenges and OpportunitiesIn Japan, high taxi fares and service quality issues stemming from an aging driver population highlight the urgent need for autonomous driving technology. Compared to the convenient and low-cost ride-hailing service in mainland China (around $0

China's Robotaxi Ventures Overseas: A Global Market Race Filled with Challenges and Opportunities

In 2023, Elon Musk unveiled CyberCab at Warner Bros. Studios, hoping for a Hollywood-style showcase of his autonomous driving technology. However, Tesla's stock plummeted 8 points after the launch, a stark contrast to the booming development of Chinese Robotaxi companies. WeRide (Robotaxi) not only launched the world's only mass-produced L4 autonomous vehicle, but its self-driving cars have also expanded to over a dozen major cities in China and are actively targeting overseas markets. Recently, WeRide secured Hong Kong's first autonomous driving pilot license, paving the way for its entry into the right-hand drive market, which accounts for one-third of the global market share. The enormous potential of the global Robotaxi market, projected to reach 834.9 billion yuan (approximately $115 billion USD) by 2030 equivalent to six Ubers or four Didis has already attracted the attention of numerous Chinese players.

End-to-End Technology Leads Autonomous Driving into the L4 Era

In Japan, high taxi fares and service quality issues stemming from an aging driver population highlight the urgent need for autonomous driving technology. Compared to the convenient and low-cost ride-hailing service in mainland China (around $0.35/km), taxi fares in Hong Kong reach $1.28/km and are often hampered by traffic congestion. This situation creates a much higher demand for Robotaxis in overseas markets than in mainland China. Autonomous driving technology can not only address driver shortages and high costs but also effectively mitigate traffic congestion through intelligent route planning.

However, despite strong overseas demand, the development of domestic technology faces numerous challenges. The implementation of intelligent driving technology relies on the perfect combination of "software + chips/consumer electronics + mechanical manufacturing." Historically, America's leadership in the PC internet and smartphone eras led to a certain degree of backwardness in computer talent, consumer electronics supply chains, and some areas of mechanical manufacturing in regions like Europe and Japan.

The bankruptcy filing of Northvolt, a European electric vehicle battery manufacturer, highlights the shortcomings of Europe's battery industry in production experience and skilled workers. It's reported that only about 100 outsourced workers from China and South Korea in its Swedish factory truly possess core technologies. This has resulted in an electric vehicle penetration rate of around 20% in Europe, significantly lower than China's 40%+, and its intelligent driving technology development is equally lagging. Compared to the rapid development of L3 autonomous driving technology in China, Europe still struggles with L2 technology. Mercedes-Benz's L2+ assisted driving system has a top speed of only 64.4 km/h and cannot automatically change lanes, a significant gap compared to domestic models like the Li Auto L9.

However, the introduction of "end-to-end" technology has ushered in a "ChatGPT moment" for the autonomous driving field. End-to-end technology can infinitely approach the level of human driving and boasts faster computing speeds, pushing autonomous driving technology into the L4 era. China and the US, as hubs for autonomous driving giants, hold a leading position in technology and application.

Operational Deployment Becomes a New Focus of Competition for Automakers

Robin Li, CEO of Baidu, points out that behind end-to-end autonomous driving technology lies large-model technology. Through widespread deployment, covering more driving scenarios and various abnormal and extreme conditions, the end-to-end system can continuously learn and optimize, ultimately achieving higher versatility and stability, creating a virtuous cycle of technology and application. Therefore, expansion becomes a top priority for autonomous driving companies, aligning well with the market needs of highly urbanized regions with well-developed road infrastructure, such as Europe, Japan, Singapore, and Thailand.

These regions possess a certain foundation in the automotive and electronic component supply chains, facilitating local cooperation and procurement. Furthermore, their regulations related to autonomous driving are relatively well-established. For instance, Germany's ATM system has achieved automated control; Sweden plans to build the world's first permanent electrified road by 2025, facilitating visual recognition and charging processes for autonomous driving. These factors provide favorable conditions for the implementation of autonomous driving technology. In the latter half of the year, both China and the US have launched a "city-opening battle," deploying and implementing applications in multiple regions and countries outside their home markets.

Robotaxi's Overseas Expansion: Challenges and Opportunities Coexist

Expanding Robotaxi services overseas is not without its challenges. Directly deploying vehicles to right-hand drive regions without adaptation can lead to issues such as abnormal braking pedal vibrations or stalling. This is because right-hand drive regions are mostly located in humid and warm coastal areas, where salt spray from sea winds can corrode electronic components and accelerate vehicle wear. Therefore, overseas companies need to develop self-cleaning systems to adapt to the complex local climate and road conditions.

For Chinese Robotaxi companies, hardware isn't the biggest challenge, as the domestic autonomous driving industry chain is becoming increasingly mature, with some components already leading the world. However, software system customization is the real difficulty. Overseas users have different driving habits from those in China. For example, domestic users prefer stronger safety alert signals, while European users are accustomed to a quieter driving environment. Furthermore, the autonomous driving system needs to learn and adapt to different regional traffic regulations.

Europeans have a higher proportion of suburban residents, and their commutes often involve highways, which are often unrestricted, placing higher demands on the perception, planning, and control capabilities of the autonomous driving system. Higher-resolution cameras and more powerful computing power are needed to process more images and information per second. These increased underlying technical requirements make the implementation of autonomous driving exceptionally difficult. For example, Germany, one of the earliest countries to legislate on autonomous driving, requires drivers to remain seated and ready to take over the vehicle at all times.

New Opportunities Brought by L4 Autonomous Driving

The emergence of L4 autonomous driving technology presents new opportunities for Robotaxi's overseas expansion. L4 autonomous vehicles can drive completely independently without human supervision, possessing strong safety and generalization capabilities. WeRide's 100% driverless ride-hailing service in Wuhan, and its successful implementation in multiple cities, fully demonstrate the maturity and reliability of L4 autonomous driving technology. The redundant design of L4 autonomous driving technology allows it to better handle stricter traffic regulations and more complex road conditions overseas. The addition of an end-to-end autonomous driving large model enables the system to continuously learn, quickly adapt to the traffic rules of different countries and regions, and continuously improve algorithm capabilities. The accumulation of autonomous driving mileage and the increase in covered cities will bring clear technological advantages to companies.

Cost Control and Market Access: Key Factors for Overseas Expansion

The large-scale overseas expansion of Robotaxi will be a "money-burning" game, as the new energy infrastructure in most overseas regions is relatively underdeveloped. For example, the proportion of electric vehicles in Hong Kong is only 11.2%, with insufficient supporting facilities. Overseas companies must have the ability to reduce the cost of vehicle mass production and operation to ensure sustainable development. Currently, the mass production cost of autonomous vehicles has dropped to the 200,000 yuan level (approximately $27,500 USD), and Robotaxi companies are prepared for a tough battle.

Conclusion: The Realization of Long-Term Vision

In 2013, Robin Li envisioned the future of AI. Now, with the automotive intelligent transformation fully entering the L4 stage, the "long-term vision" is coming to fruition. As Chinese companies like WeRide enter overseas markets, Chinese players will have more opportunities in the global Robotaxi market and a chance to define the future of the industry. The next one or two years will be a crucial period for determining the fate of Robotaxi companies.

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