The Autonomous Driving Dilemma

Xie Yingjie, Investor Network

In December, on a street in Zhuzhou, Hunan Province, a vehicle emblazoned with the words "Hello Autonomous Driving" was parked by the roadside. Citizens and police officers teamed up to lift the vehicle and rescue an injured person trapped beneath—a scene quickly captured and shared by passersby. The Hunan Provincial Traditional Chinese Medicine Hospital later confirmed that the accident resulted in injuries to two pedestrians, who remain under observation in the ICU, with their specific conditions undisclosed.

As of December 10, the local traffic police department had not yet announced the determination of responsibility, and Hello had not disclosed technical details. However, the operation of Robotaxi in Zhuzhou's urban area has been quietly suspended.

Hello Robotaxi Hits and Injures Pedestrian

For this "latecomer" that only entered the autonomous driving race with a massive investment of 3 billion yuan six months ago, the first "injury penalty" came too swiftly. Public information reveals that Hello was originally a leading operator of shared bicycles and announced its entry into the Robotaxi sector in June 2025. Hello disclosed at the time that the company, along with Ant Group and CATL, jointly established "Shanghai Zaofu Intelligent Technology Co., Ltd." through their investment entities, focusing on L4-level autonomous driving. The three parties initially invested a total of over 3 billion yuan. Subsequently, Hello's Robotaxi business received strategic investment from Alibaba.

According to the standards set by the International Society of Automotive Engineers, automotive autonomous driving technology is categorized into six levels, ranging from L0 to L5. L1 to L2 are assisted driving technologies, while L3 and above are considered autonomous driving. L4 refers to a level where, in most scenarios, the vehicle can achieve autonomous driving without human driver intervention, with Robotaxi being one of its typical applications.

In September, Hello and Dongfang Qichen collaborated to launch the pre-installed mass-produced Robotaxi—the HR1. Each vehicle is equipped with 4 medium-to-long-range lidars, 4 blind spot radars, 6 millimeter-wave radars, and 12 ultrasonic radars. Horizon Robotics provides the core L4-level autonomous driving hardware and software system. Commercial toll operations commenced simultaneously in Zhuzhou, Hunan, and Liyang, Jiangsu, with intensive road testing in Shanghai, Guangzhou, Changsha, and other locations—an expansion pace described as "rapid."

However, the cost of this high-speed sprint (chōng cī, 'sprint') was a rapid dilution of safety redundancy. Industry insiders revealed that the accident occurred on a road that had been watered for several consecutive days, making the ground slippery. The pedestrian was suspected of slipping while riding, and the vehicle failed to identify the fallen target, directly running over them.

The responsibility for the accident remains to be clarified by the police, but the legal community generally holds that Hello, as the operator, is responsible. Current regulations treat autonomous vehicles as "products," applying the product liability provisions of the Civil Code. The operator must first bear civil compensation and then seek reimbursement from the technology provider. If there is evidence of knowingly operating with algorithmic defects, criminal liability may be involved.

According to the pilot requirements of four ministries and commissions, each Robotaxi must be insured with third-party liability insurance of no less than 5 million yuan, and Hello must "compensate first and explain later." In response, Hello Travel stated that it is actively cooperating with the relevant authorities in the investigation and that the operation of unmanned vehicles in the area has been suspended.

The Policy Environment Cools Down Again

Robotaxi is a typical industry that is "highly dependent on policies." In recent years, policies focusing on fully driverless autonomous driving have been intensively (mì jí, 'intensively') released, with top-level frameworks and local regulations continuously advancing. The once-dormant Robotaxi sector has thus become active again and rapidly moved into the spotlight.

Autonomous vehicles do not require drivers, can operate stably 24 hours a day, and can leverage external factors such as "vehicle-to-vehicle connectivity" and "vehicle-to-infrastructure coordination" to enhance urban road traffic safety and efficiency. The widespread adoption of autonomous driving can boost the overall economic vitality of cities. Citigroup predicts that from 2025 to 2030, the compound annual growth rate of China's Robotaxi fleet will reach 169%, exceeding 538,000 vehicles by 2030.

The enormous market potential has attracted numerous players. Baidu's Luobo Kuaipao is fiercely competing with Google's Waymo for the industry's leading position. WeRide and Pony.ai, known as the "Robotaxi duo," listed on Nasdaq in 2024 and simultaneously on the Hong Kong Stock Exchange this November. Cao Cao Travel announced on December 3 that it is upgrading its Robotaxi strategy, proposing a global strategic goal of "ten years, a hundred cities, and a hundred billion yuan."

In contrast to the fierce competition in the industry, the capital market's response has been relatively lukewarm. Taking WeRide and Pony.ai's Hong Kong listings as examples, their stock prices fell by 9.96% and 9.28%, respectively, on their first trading day.

The latest accident has once again cooled the policy environment that had just warmed up for the entire Robotaxi industry.

Rewinding to 2024, Baidu's "Luobo Kuaipao" launched on a large scale in Wuhan, triggering protests from taxi drivers and leading to a "policy cooling-off period" in various regions. In early 2025, Beijing, Shenzhen, and Guangzhou successively issued a new round of driverless licenses. The industry believed that the regulatory window had reopened, but now it has to collectively "catch up"—regulators have required all operators to submit risk self-inspection reports and reassess the algorithm's coverage of rare scenarios.

Looking back over the past three years, the Robotaxi sector has repeatedly gone through cycles of "accident - suspension - reopening":

In 2024, Baidu's autonomous driving ride-hailing platform, "Luobo Kuaipao," had a minor contact with a pedestrian who ran a red light on a street in Wuhan. In August of this year, a Luobo Kuaipao driverless taxi fell into a municipal construction trench on Neihuan East Road in Yongchuan District, Chongqing. The female passenger eventually climbed out of the window using a ladder. Additionally, Pony.ai's Robotaxi vehicle experienced an abnormal driving state and caught fire, but fortunately, there were no passengers inside at the time.

In October 2023, Cruise, a subsidiary of General Motors focused on the Robotaxi business, encountered a similar accident in San Francisco. At the time, a pedestrian was violently struck by another manned vehicle and then fell in front of a Cruise autonomous vehicle. Although the Cruise vehicle braked quickly, the injured person was already under the vehicle. After detecting the collision, the Cruise vehicle chose to "pull over," dragging the injured person several meters and worsening their injuries.

Subsequently, General Motors announced that it would abandon the driverless taxi business. Tesla CEO Elon Musk commented on social media that achieving a universal solution for autonomous driving—one that does not require separate training for each city—is extremely difficult, especially while ensuring that vehicle costs do not become prohibitively expensive.

But Robotaxi companies cannot afford to wait. After several rounds of industry reshuffling, few companies remain in the fully driverless sector. Each is persevering, hoping to hold on until better days arrive.

More significantly, China's largest insurance brokerage issued an internal notice to increase Robotaxi insurance premiums per vehicle by 20% to 50% and add an "algorithm defect exclusion clause," directly raising operational costs. Industry insiders believe that once insurance premiums and regulatory compliance costs both rise, the asset-light "platform + contract manufacturing" model will face barriers from the asset-heavy "vehicle manufacturing + insurance" model, making it difficult for latecomers to achieve an overtaking on a curve (wān dào chāo chē, 'overtaking on a curve') story. (Produced by Thinker Finance) ■

Source: Investor Network