Baidu's Robotaxi Division Anticipates Profitability in the Coming Year

Baidu Apollo Go, a significant player in China's nascent robotaxi market, has projected that it will become profitable next year.

This announcement comes at a time when major car industry player, Tesla’s CEO Elon Musk, is emphasizing plans to boost the company's robotaxi expansion as its revenue experiences a decline. According to the latest earnings report from Baidu, Apollo Go facilitated around 839,000 rides in the last quarter of 2023.

Currently, most of the robotaxis operated by Apollo Go still house a human staff worker for safety precautions. However, since September 2023, Apollo Go and start-up company Pony.ai have been allowed by a Beijing district to charge fares for robotaxi rides with no in-vehicle staff. About 45% of orders during the fourth quarter in Wuhan were completely driverless, marking an increase from 40% in the previous quarter. On top of increased usage and reduced labour costs per ride, Baidu is also working to decrease the costs of the cars themselves. The sixth generation of Apollo’s robotaxi has been announced to cost around 200,000 yuan ($28,169) – less than half the price of its previous generation.

This year, Baidu has plans to release 1,000 of these vehicles in Wuhan, where a considerable number of vehicles already operate completely driver-free. Baidu stated in a press release: "With decreasing costs and increasing orders, Apollo Go's unit economics (UE) is nearing break-even, expected to achieve balance in the fourth quarter of 2024 and turn profitable by 2025." Meanwhile, rival robotaxi operator Pony.ai is preparing for a listing outside mainland China. There remains skepticism about fully driverless cars within the auto industry, which requires widespread regulatory approval for operation.