On Friday, the U.S. stock market staged an annual drama of polar reversal. While Tesla closed down nearly 9%, wiping out nearly 100 billion in market value, Uber closed up nearly 11% to hit an all-time high, and Lyft surged over 9%. Meanwhile, Google and Baidu, which have been operating Waymo and ApolloGO for years, did not reap the benefits, with Google edging up 0.72% and Baidu closing down 0.26%.

As everyone knows, the fuse for this drama was Musk's "We, Robot" event and his Robotaxi announcement.

Musk, who had just two days ago claimed that this would "go down in history," probably didn't expect such a market reaction. However, the plunge in Tesla's stock price was actually anticipated by many. After all, the much-anticipated black technology did not materialize as expected, with safety, technical details, and mass production still a year away, and commercialization nowhere in sight.

It all seemed like a bad check.

In this way, from the proposal of autonomous driving to the announcement of the Cybercab, Tesla's greatest contribution appears to have been successfully instilling the concept of the commercial viability of autonomous driving in global consumers.

And the fruits of this event were ultimately plucked by Uber, while Baidu, one of the three giants in autonomous driving, unfortunately got caught in the crossfire.

Did Tesla go from 'threat' to 'assist,' allowing Uber to reap the benefits?

Originally, Tesla's Robotaxi concept was seen as a major threat to Uber, but the final result seems to be the opposite.

Ultimately, this is because Tesla is still a long way from commercialization. In contrast, Uber has a clear landing scenario and leads the way in commercial applications.

Moreover, the existence and development of autonomous driving are likely to expand the available market size for ride-hailing services like Uber, as the increase in shared mobility vehicles means an increase in supply, which will directly drive down the operating costs of autonomous vehicles and ultimately expand the application scenarios for shared mobility.

On the surface, Uber is the biggest beneficiary, as it is the world's largest ride-hailing company.

In contrast, while Tesla is committed to independently developing its Robotaxi fleet without partnering with existing ride-hailing platforms, it may have underestimated the difficulties and obstacles of expanding its own fleet. Without demand channels provided by companies like Uber or Lyft, achieving scale in the ride-hailing market will be challenging.

Therefore, returning to the original question, it seems that partnering with ride-hailing platforms rather than independently operating a fleet is the best option for autonomous driving developers.

Not only that, but Uber also has unique advantages in the ride-hailing space, such as helping autonomous driving developers achieve sustainable growth by optimizing logistics, providing fleet management experience, and navigating local regulations.

In this way, Uber has an unbeatable position in the long-term development of autonomous driving. If autonomous driving is fully realized, Uber, as the world's largest ride-hailing company, can fully capitalize on the positive incentives brought about by technological progress. Even if autonomous driving technology stagnates in the short term, Uber can still explore breakthroughs with autonomous driving developers as a partner.

In September this year, Uber and Waymo, Google's autonomous driving subsidiary, jointly announced that they would jointly launch autonomous vehicles in Austin and Atlanta, the two largest cities in the United States, in early 2025. Uber will manage Waymo's autonomous fleet, including providing vehicle cleaning and maintenance, while Waymo will continue to be responsible for testing and operating the autonomous vehicles.

From two perspectives, this cooperation not only heralds a major change in the ride-hailing industry but also marks a significant step forward in the commercialization of autonomous driving technology. Moreover, on the day the news was announced, Uber's share price surged 6.45%.

Overall, the reason why Uber was able to unexpectedly reap the fruits this time is that when the market was expecting a real breakthrough in autonomous driving, the answer provided was still vague, and behind this vague answer lies another prerequisite - ride-hailing.

Google and Baidu remain calm, but what are the new considerations in the market?

Compared to Tesla's plunge and Uber's surge, Google and Baidu experienced modest gains and losses, respectively. Behind this apparent calm lies both good and bad news.

Most notably, Google and Baidu are already ahead of Tesla in the commercialization of autonomous driving.

Taking ApolloGO in China as an example, Baidu's sixth-generation ApolloGO, launched in 2022, is already a steering wheel- and accelerator-free autonomous prototype vehicle, two years ahead of Tesla. Moreover, the sixth-generation ApolloGO Echi 06 has a price tag of just 204,600 yuan, compared to the Cybercab's $30,000. ApolloGO also has an advantage in manufacturing costs.

In May of this year, at the Apollo Day event, Baidu launched ADFM (Autonomous Driving Foundation Model), the world's first large model supporting L4 autonomous driving. According to the official introduction, the model can balance technical safety and generalization, achieving a safety level more than 10 times higher than that of human drivers.

However, it is worth noting that there are hundreds of controllers behind the scenes of ApolloGO's autonomous driving system. While the vast majority of vehicles operate in autonomous mode, human intervention will be required in cases where potential threats to operational safety arise.

This means that ApolloGO's autonomous driving system has not yet reached 100% autonomy, and the widely publicized issue of autonomous driving safety remains unresolved.

In addition, as an internet company, Baidu is neither an automaker nor a ride-hailing service provider. It lacks Tesla's mature production processes for 6 million vehicles and cost control initiatives, as well as Uber's large-scale platform and vast amounts of travel data.

Furthermore, according to data released by the Wuhan Municipal Transportation Bureau in May this year, there are currently only 400+ ApolloGO test vehicles operating in Wuhan, while the city has an average of 29,400 ride-hailing vehicles operating daily, not including traditional taxis. This means that ApolloGO accounts for less than 1% of the market.

At this point, while ApolloGO has taken an early step towards commercialization, it is still too early to form a scale advantage. Solving the issue of autonomous driving safety remains a major concern for Baidu.

Therefore, in this global race for autonomous driving focused on ride-hailing services, Baidu, which lacks manufacturing and platform operation experience, is uncertain about how far it can go based on its current advantages.

This time, benefiting from the faster pace of autonomous driving commercialization, Baidu did not experience a sharp decline in share price along with Tesla on the day of the Tesla event, with a modest decline of less than 1%, performing relatively resiliently. However, as the leading domestic autonomous driving company, Baidu bears a heavy responsibility and is caught in a one-against-many situation, which inevitably attracts more scrutiny and higher expectations.

Actions Speak Louder Than Words in the Sino-U.S. Autonomous Driving Competition

However, industrial competition has always been brutal.

Judging from the attention Tesla's Robotaxi has received, the public's expectations for autonomous driving are unprecedented. It's not just Tesla that wants to take the lead; autonomous driving companies worldwide are working tirelessly to advance, particularly in China and the United States, where a fierce competition is underway.

On October 2, Waymo, a subsidiary of Google's parent company Alphabet, announced that it would soon open its autonomous taxi service to the public in Austin, Texas. On October 9, Baidu announced plans to launch its autonomous taxi service ApolloGO (i.e., ApolloGO) outside of China. The three giants crowded into the beginning of October to send signals.

Moreover, WeRide has already conducted autonomous driving R&D, testing, and operations globally, accumulating over 25 million kilometers of autonomous driving miles as of April 2024. Pony.ai's Robotaxi service has also accumulated over 36 million kilometers of autonomous driving test miles and 4 million kilometers of driverless test miles.

As we all know, the ultimate goal of autonomous driving is to solve safety issues and achieve successful commercialization. Nowadays, not only Baidu's ApolloGO but also companies like WeRide and Pony.ai have started running in China, leading in numbers.

It is particularly noteworthy that, based on the estimated selling price of 204,600 yuan for ApolloGO and an expected usage period of five years, the daily operating cost per vehicle, taking into account depreciation, maintenance, and repairs, is estimated to be around 300 yuan. With a daily peak of over 20 rides and an average fare per ride ranging from 15 to 25 yuan, the daily revenue can reach 300 to 500 yuan, essentially achieving profitability at the operational level.

This signal is undoubtedly a new favorable evidence for the feasibility of commercialization. According to Frost & Sullivan's data analysis, when the cost per kilometer of Robotaxi begins to be lower than that of human-driven ride-hailing services, Robotaxi will enter a period of widespread adoption, which is expected to occur in 2026.

Meanwhile, Tesla's Cybercab has just gone into production. At first glance, the gap between the two in terms of commercialization will widen further.

Moreover, domestic autonomous driving companies are still seizing the time window to further capture overseas markets. Currently, WeRide's autonomous taxis are already cruising the streets of Abu Dhabi, United Arab Emirates, while Pony.ai has signed a memorandum of understanding with taxi operator ComfortDelGro in Singapore.

In terms of cooperation models, both autonomous driving technology and products are exported overseas, including deploying autonomous taxi fleets and services, providing customized autonomous driving solutions for local markets and users, and more.

Compared to Tesla's prototype vehicle just coming off the assembly line and technical demonstrations remaining on paper, domestic companies are clearly more action-oriented, getting on the road first and worrying about the rest later, with technological progress accumulating gradually through practice.

This October, the competition between Chinese and American autonomous driving companies has opened a new perspective for the market. As the two countries with the largest number of autonomous driving companies globally, whoever can be the first to run through the commercial closed loop and successfully build a complete industrial chain will have the initiative to define the race. And the courage and daring of domestic companies is undoubtedly a prerequisite for winning this competition.

Source: HK Stocks Research Institute