Baidu has secured a permit to operate China’s first-ever licensed fully driverless robo-taxi, taking an early lead in the race to launch self-driving cars in the country.
The internet group said on Monday it would be able to operate its Apollo Go cars without an onboard safety supervisor in the Chinese cities of Wuhan and Chongqing.
Winning the permit gave Baidu, the operator of China’s largest search engine, an edge over rivals including Pony.ai, WeRide and AutoX, which are striving to develop fully autonomous driving software systems .
The permit would allow the company to carry out more tests on its vehicles, said Charlie Chai, self-driving analyst at Shanghai-based 86 Research.
“My best guess is that significant revenue-generating commercialization is still two to three years away,” he said. “Technically, the leaders are Pony.ai and [Baidu’s] Apollo, but in terms of scale and field testing, Baidu’s deployment is ahead.
The service will be available in the central city of Wuhan from 9 a.m. to 5 p.m. and in the southwest municipality of Chongqing from 9:30 a.m. to 4:30 p.m., with five robotaxis deployed in each city, the company said. The designated service areas will cover 13 km2 in Wuhan and 30 km2 in Chongqing.
In April, Baidu and Pony.ai won approval to move the safety driver from the steering wheel to the front passenger seat for part of their robotaxi business in Beijing. In July, Beijing regulators allowed the two companies to collect fees for driverless rides in a 60 km2 suburban area of the capital.
Baidu struggled in the first quarter, with its search and video streaming platforms – traditionally the company’s cash cows – seeing steady growth as China’s economy slowed. The company is betting on the driverless car sector to shore up its revenue going forward.
Baidu posted a net loss of Rmb 885 million ($131 million) for the first three months of the year, compared to the previous year’s profit of Rmb 25.65 billion, research and development expenses increasing by 10% year on year.
But Chai said the longer timeframe for commercializing self-driving was a dilemma for shareholders.
The research and growth of IQIYI, the streaming platform in which Baidu has a majority stake, has been weak this year, he said. “The company lacks a good narrative. . . it only attracts patient investors who are willing to wait,” Chai said.
Robin Li, chief executive of Baidu, said the company’s business had been hit by the resurgence of Covid-19 in China since mid-March, but remained confident its artificial intelligence business could drive growth at long term of the Internet group.
According to analysts, autonomous vehicles have become a new arena of competition between the United States and China.
“China and the United States are now starting from the same starting line,” said Owen Chen, analyst at S&P Global Mobility. “It’s not just about technology competition between companies, but also about competition between countries and regional governments in policy support for the industry.”