2024-07-10 12:53:28
A fully autonomous robotaxi that operates without a driver. For a while, it seemed like a distant dream as major companies continued to reduce their businesses along with criticism that it was a ‘bubble’. Recently, news of business expansion has been coming in one after another. There is also a big event scheduled for August 8th, when Tesla will unveil its robotaxi.
Could it be that the robotaxi industry is currently in a period of darkness before dawn? If so, who will be the winner when the market opens? Today The robotaxi market that seems to be opening up but not yetLet’s take a look.
*This article is the online version of the Deep Dive newsletter published on the 9th. Subscribe to Deep Dive, the ‘economic news that you’ll get hooked on as you read’ newsletter.
What Waymo has accomplished in 15 years
Now America In San Francisco, anyone can take a ride in a Waymo robotaxi. That’s because the service, which was previously available only to a limited number of users, has been open to everyone since late last month. It’s been 15 years since Waymo, which started as a Google division in 2009, first successfully drove a self-driving car on the streets of Palo Alto, near San Francisco. The fare is similar to that of ride-sharing services like Uber. The news has drawn mixed reactions: “The robotaxi market is finally starting to open up,” vs. “Are we only just getting here?” Frankly, it’s been taking much longer than expected. “There was a lot of hype in the 2010s,” Waymo product chief Chris Ludwig told Bloomberg. “People were disappointed because they said[robotaxis]would be here by 2014 and they never came. We realized there were a lot of problems, and we’ve solved them now.”
The lack of autonomous driving technology and the resulting large and small accidents, the high vehicle prices and operating costs, and the public’s resistance that is difficult to overcome. Due to a combination of factors, the robotaxi industry had to remain in a long period of stagnation for a while. As a result, many players have scaled back their businesses or closed down completely in the past few years. Here are just a few of the long list.
UberAfter suffering a fatal accident in 2018, the company sold its autonomous driving division to startup Aurora in 2020.
A self-driving startup jointly established by Ford and Volkswagen with a $3.6 billion investment Argo AIwent out of business in 2022.
china AlibabaDamo Academy, a global research institute, disbanded its autonomous driving team last year.
Apple disbanded its Special Projects Group, which had been researching self-driving electric vehicles for 10 years, in February of this year. Apple Car development haltedI did.
General Motors (GM) has a robotaxi division Cruise spending to be cut by about $1 billion by 2024Cruise Robotaxi had a series of accidents last year, leading to the CEO stepping down and the company being forced to suspend operations for a while.
When on earth will I make money?
Ultimately, the biggest issue is money. Before the robotaxi business can see the light, it must be able to afford the huge investment costs. McKinsey said in a report last year: In the case of the US market, net profit will not be positive until after 2031, when an investment of 66.5 billion dollars (approximately 92 trillion won) will be poured in.In other words, it is difficult for this business to avoid deficits for a considerable period of time.
This is precisely why skepticism about robotaxis becoming a “bottomless bucket” is growing. Last year, Wang Chuanfu, the founder and chairman of China’s largest electric car company BYD, disparaged robotaxis by saying, “(Robotaxis) are ridiculous. They are the ‘Emperor with No Clothes.’”
The case of Cruise shows how much investment is required in the robotaxi business. GM Cruise operates 400 fully autonomous Chevrolet Bolt vehicles. According to the New York Times, One unit costs between $150,000 and $200,000 (about 200 million to 280 million won).It’s me. It’s because it requires a lot of expensive equipment, including LiDAR (a sensor that uses laser light to detect the surroundings). Also, An average of 1.5 employees per vehicle remotely supporting unmanned autonomous drivingThey say that when they receive a signal that there is a problem with the vehicle, they control it remotely. The biggest advantage of robotaxis, which is that they can greatly reduce labor costs by not needing a driver, becomes meaningless. Cruise Last year, there was a deficit of 3.48 billion dollars (about 4.8 trillion won).was recorded.
Of course, if the parent company is a big tech company that makes a lot of money and can afford these costs, it’s worth a try. That’s why Google’s Waymo and Amazon’s Zoox are still able to survive. However, considering that even Waymo laid off employees last year, it’s clear that the cost pressure is serious.
Baidu: “We will be in the black starting next year”
Here’s a company that deserves attention: Baidu, the Chinese search giant. Baidu jumped into the development of autonomous driving technology early on, in 2013. Under the brand name “Luobo Kuaipao (萝卜快跑)” (which translates to “carrot run” in Korean), it has been operating a robotaxi service in 11 major cities, including Beijing, since 2021. In particular, Wuhan, a central city with a population of 11 million, is its largest base. Baidu’s research and development expenses have skyrocketed since it jumped into autonomous driving technology development. It is said that it has poured 150 billion yuan (about 28.5 trillion won) into research and development over the past 10 years. Despite this, in May of last year, when criticism continued that the future of autonomous driving was still unclear and that it was far from turning a profit, Baidu announced the following when announcing its performance: “Luobo Kuaipao is expected to break even in Wuhan by the end of 2024 and enter the fully profitable phase in 2025.”
Will we break even within this year? Let’s take a look at how that is possible. The key is cost reductionBaidu plans to deploy 1,000 new sixth-generation unmanned autonomous vehicles in Wuhan by the end of this year. The price of the new car is only 204,600 yuan (about 38 million won), which is 60% cheaper than the existing model (480,000 yuan).They say it is done.
This is not much different from the price of most electric vehicles without autonomous driving functions. It is an incredible price for an autonomous vehicle equipped with a total of 38 sensors, including a lidar mounted on the roof. Baidu explains that this price is possible thanks to the rapid development of China’s electric vehicle and autonomous driving supply chain.
The introduction of half-price driverless cars will lead to lower fares. In Wuhan, China, Baidu’s RoboTaxi (LuoboKuaipao) fares are already 4-16 yuan per 10 km, cheaper than regular taxis (18-30 yuan), causing taxi drivers to cry. If the price can be lowered even further, the number of users could explode.
It is still doubtful, but what if Baidu really turns a profit in Wuhan next year as it boasts? This is not only for Baidu, It will be a turning point that gives hope to the entire robotaxi industry, which has been in a slump. Maybe everyone will start following that success model.
Consumers who are afraid of autonomous driving
Of course, significantly reducing costs is a key to the success of robotaxis, but money is not the only obstacle to this industry. There are many issues to be resolved, including government regulations and insurance overhauls. One in particular seems difficult to overcome. Consumer resistanceno see.
In fact, robotaxis have many advantages over human drivers. They don’t get distracted, sleepy, or talk on the phone while driving. They don’t drink or do drugs. And you don’t have to worry about mistakenly hitting the accelerator pedal for the brake.
Studies have shown that robotaxis cause fewer accidents than the average human driver. For example, a joint study last year by Waymo and reinsurance company Swiss Re found that Waymo’s autonomous vehicles resulted in only a quarter as many property damage claims as human drivers (0.78 per million miles for autonomous vehicles, compared to 3.26 for human drivers) and one-seventh as many personal injury accidents (0.41 per million miles for autonomous vehicles, compared to 2.78 for human drivers).
That doesn’t mean there’s zero chance of a fatal accident. Last October in San Francisco, a Cruise robotaxi crashed into a female pedestrian who had been hit by another vehicle and then was dragged 6 meters further, seriously injuring her. No matter how low the accident rate, when a robotaxi crash happens, the news is widely reported and social media becomes a hot topic. Amnon Shashua, CEO of Israeli autonomous driving company Mobileye, said about this, “Each accident is like a person biting a dog.” “(The accident) has drawn so much attention that it has become a stumbling block to wider expansion (of autonomous driving technology).”It is.
These kinds of accidents, big and small, affect trust in robotaxis. According to a poll released by the American Automobile Association in March, 66% of Americans said they were afraid of self-driving cars, and 25% said they were uncertain. How many people said they trusted self-driving cars? Only 9%. This is a worsening of public opinion compared to last year.
In February, a Waymo robotaxi was attacked and set on fire by a crowd in San Francisco’s Chinatown. It may have been an aberration for some, but it was a symbolic incident that showed how much resistance there is to unfamiliar, driverless taxis. “Autonomous driving is definitely safer than human driving,” says Chao Chun-ming, a professor at the State University of New York. “But acceptance is a matter of consumer psychology. How safe does technology have to be for the public to accept it?”
But let’s be a little bit more pessimistic. In 1896, a 45-year-old woman, Mrs. Driscoll, was hit and killed by a motor coach traveling at 4 miles per hour in a park in England. It was the world’s first fatal automobile accident. The coroner at the time said, “I hope that something like this will never happen again.” But now, 130 years later, 1.19 million people die in automobile accidents worldwide each year. It’s amazing that humans have come to accept this number of deaths as normal.
But if there really is a technology that can significantly reduce traffic fatalities, isn’t it natural to pursue it? Isn’t the most powerful way to do it to remove the incompetent human driver from the vehicle? It’s scary and unfamiliar, but it’s a reason to support the development of robotaxis. By. Deep Dive
The robotaxi industry, which had been in a slump for a while after the Cruise accident and Apple Car went out of business, has been gradually gaining momentum recently. I think the interest has increased due to Tesla’s announcement. Let’s wait a month to see if there will be a surprise announcement that meets market expectations. To summarize the main points,
– Huge investment costs, uncertain commercialization schedule. The robotaxi market has been in a difficult situation with major players leaving one after another. The only progress that has been made is that Waymo, the industry leader that has held on, recently expanded its service to be available to anyone in San Francisco.
– The robotaxi industry is expected to inevitably run into large deficits for the next few years due to the high cost of vehicles and excessive labor costs. Will it only make money in 7-10 years?
– However, in this situation, there is a company that has released a forecast that it will reach the break-even point by the end of this year. It is China’s Baidu. It is said that this is because they have newly developed a low-cost autonomous vehicle with a 60% lower price. After all, cost reduction is the only way to survive. It is still doubtful, but if they really turn a profit, it will be a huge success.
– Of course, consumer resistance to autonomous driving technology is also a challenge that must be overcome. There are many other capitalistic reasons, but isn’t the urgency to reduce traffic fatalities the biggest reason to move forward with this technology?
*This article is the online version of the Deep Dive newsletter published on the 9th. Subscribe to Deep Dive, the ‘economic news that you’ll get hooked on as you read’ newsletter.
Reporter Han Ae-ran [email protected]
2024-07-10 12:53:28