Introduction | Lead

Robotaxi is a popular field at present. Whether it is the local forces represented by Luobokuai, which has already started operations in China, or Tesla's recently released Cybercab in the United States, both indicate that this sector will have significant development potential in the future.

Produced by | Heyan Car Review Studio

Written by | Zhang Dachuan

Edited by | Heyanzi

Total words: 2130

The autonomous driving sector is showing a warming trend.

Recently, Didi Autonomous Driving announced the completion of its Series C funding round, raising a total of $298 million. This round of funding was led by GAC Motor and co-invested by Didi. The funds raised by Didi's autonomous driving team will be used to further increase investment in R&D for autonomous driving technology and promote the mass production of Robotaxi vehicles.

Didi established its autonomous driving technology research and development department as early as 2016, with the goal of achieving L4 autonomous driving technology. In August 2019, Didi announced the upgrade of its autonomous driving technology department into an independent company, focusing on the development of high-level autonomous driving technology and the implementation of related technologies. As a giant in the domestic mobile travel sector, Didi is well aware of the revolutionary changes that autonomous driving technology can bring to its industry. However, at the same time, investments in high-level autonomous driving technology run into the billions. Separating the autonomous driving business can help the company seek more financial support to alleviate Didi's burden and enable cooperation with more strategic partners to create greater synergies.

△ Didi Autonomous Driving has recently completed its Series C funding round, raising $298 million

Robotaxi becomes a new breakthrough for driverless vehicles

There is considerable uncertainty about the future direction of high-level autonomous driving. The difficulty of L4 autonomous driving technology is self-evident. Over the years, many autonomous driving technology companies have collapsed, mainly due to their inability to achieve the commercialization of L4 autonomous driving technology, resulting in limited revenue. On the other hand, companies need to maintain high R&D investments, ultimately leading to financial difficulties.

△ There is considerable uncertainty about the future of high-level autonomous driving

However, compared to the stagnation in the consumer passenger car sector, high-level autonomous driving technology has now found its most suitable new development path – Robotaxi. Unlike consumer users who face many unpredictable long-tail operating conditions, the threshold for B-end Robotaxi is significantly lower. On the one hand, relevant enterprises can gradually expand the operating scope of Robotaxi, opening it up to users once they are very familiar with a particular area. On the other hand, Robotaxi can have an operation and maintenance platform behind it, allowing for remote takeover at any time to minimize the occurrence of problems. More importantly, once Robotaxi models can be deployed in large numbers, relevant enterprises can obtain massive operational data from real-world road scenarios, thereby continuously optimizing their autonomous driving solutions.

△ Robotaxi becomes a new development path for high-level intelligent driving businesses

Didi urgently needs strong support

With the continuous progress of multiple rounds of funding, Didi's autonomous driving business unit will also make a sprint towards IPO. However, if Didi can achieve larger-scale Robotaxi business operations before the IPO, it will have the confidence to secure a higher valuation before going public and raise more funds. The development of autonomous driving businesses is inherently capital-intensive. Globally, companies investing heavily in autonomous driving generally face billions of dollars in losses. Not to mention that Robotaxi itself is an asset-heavy operation project. Without the support of an OEM providing complete vehicle resources, the deployment of Robotaxi intelligent driving companies' fleets will require astronomical investments.

△ The development of Robotaxi businesses requires massive investments

In addition to the significant investment required for purchasing complete vehicles, it is worth mentioning that since Didi has sold its complete vehicle business to Xpeng, becoming the Xpeng MONA 03, Didi itself needs a reliable complete vehicle platform to deploy its autonomous driving system. GAC AION's complete vehicle platform and electrical and electronic architecture are a good choice. Furthermore, considering that AION models account for a significant portion of the domestic ride-hailing market, their reliability and stability have been fully verified.

△ Didi has sold its complete vehicle platform to Xpeng

Why did GAC Motor invest in Didi Autonomous Driving?

From GAC Motor's perspective, its continued investment in Didi Autonomous Driving is primarily based on two considerations:

1. The potential investment returns are considerable. Following the examples of predecessors such as Horizon Robotics, WeRide, and Pony.ai, Didi Autonomous Driving's IPO is only a matter of time. If the share price rises rapidly after listing, GAC Motor's investment will yield considerable returns. However, Robotaxi technology is not yet fully mature. If Didi Autonomous Driving fails to maintain a competitive pace in promoting the commercialization of Robotaxi, its valuation and share price will be significantly impacted, posing a significant risk for GAC Motor and other investors.

△ If Didi Autonomous Driving successfully completes its IPO, GAC Motor will also reap significant profits

2. The cooperation between GAC Motor and Didi will continue to deepen. As early as May 2023, GAC AION and Didi Autonomous Driving announced the establishment of a joint venture and jointly launched the "AIDI Plan," an unmanned new energy mass production vehicle project. In April this year, the joint venture, Andi Technology, obtained its business license, with the next step being the launch of the first mass-produced L4 vehicle in 2025. On a broader level, ride-hailing services already account for a significant portion of GAC AION's business. If Didi's Robotaxi business succeeds, AION will naturally find a new growth point.

△ The cooperation between GAC AION and Didi has already gone deep

Currently, GAC Motor is also investing in the development of high-level autonomous driving, and investing in Didi Autonomous Driving is like buying double insurance for itself. Among domestic OEMs, only Xpeng and NIO have relatively advanced intelligent driving businesses, while traditional OEMs have not made significant progress in smart driving. This is evident from the fact that many traditional automakers have introduced Huawei's ADS intelligent driving platform. The difficulty of developing intelligent driving, especially L4 autonomous driving technology, may have been underestimated by OEMs in the past. Therefore, it is a good choice for OEMs like GAC Motor to forge deep partnerships with reliable autonomous driving technology companies.

△ Deep partnerships between OEMs and intelligent driving technology companies are no longer uncommon in China

Commentary

As competition in the domestic automotive market intensifies, there are increasingly investment and cooperation opportunities between OEMs and core component manufacturers. It is undoubtedly too challenging for OEMs to undertake the full-stack research and development of new mobility technologies alone. Unless they have strong financing capabilities like Li Bin of NIO, the best and most stable solution for OEMs is to cooperate with autonomous driving technology companies. Only by complementing each other's strengths can both parties achieve maximum overall benefits.

(This article is originally created by Heyan Car Review and may not be reproduced without authorization)