Apollo Robotaxi is moving to Shougang Park while Baidu launches China’s first unmanned taxi service in the city on May 2, 2021 in Beijing, China.

He Rays Qianlong.com | Visual China Group | Getty Images

For years, Alphabet’s Waymo and other leaders have promised that autonomous vehicles are just around the corner. But that future has not yet come. Why not?

“In short, it’s a complication,” said James Peng, CEO and co-founder of Pony.ai, an autonomous vehicle company. “Every time there is a technical breakthrough, there are challenges. We have artificial intelligence, fast computer chips, sensors. Everything is solvable by smooth assembly of all parts. 99.9% are not good enough to improve technology. “

Despite promises of life-saving, climate change-friendly and cost-effective driving, the reality is that “autonomous vehicle nirvana is in 10 years,” said Michael Dunn, chief executive of ZoZoGo, an automotive consulting firm. “Although it is not impossible to get there, even the most modern technologies are not yet there and are used mainly in limited areas where things are predictable. We are far, far from universal acceptance.

Not only that, but “the business model is more challenging than technology,” he said.

Self-driving vehicles without steering wheels or brake pedals are slowly increasing and are seen by many as a novelty. Additional road tests are needed to detect technical problems. Provisions for authorizing driverless vehicles are still being developed by city, state and state. High prices over $ 100,000 for a car equipped with AV are a disadvantage of individual purchases for most buyers. Commercialization is still ongoing. Safety concerns remain, especially after a fatal crash in March 2018 involving one of Uber’s vehicles in Tempe, Arizona, and a number of accidents involving Teslas operating in self-driving mode.

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However, market leaders are betting heavily on smarter transport technology and testing its viability by recording thousands of miles to train self-driving algorithms and AI sensors to drive better than humans in all weathers and unpredictable conditions. Technology giants, automakers and startups, including GM’s Cruise, Waymo, Baidu and others, have invested billions of dollars and years of research and development in this emerging market, which is set to reach 12% of new car registrations worldwide until 2030. Meanwhile, Tesla continues its work on its semi-autonomous autopilot and self-steering systems.

Promising future for robotaxis, robo-supplies

Now, after a decade and some awkward starts, robots powered by robots and autonomous trucks are emerging as the most promising money makers on the market.

“Travel is a bad business model with unhappy drivers and problems with urban mobility. The next great thing could be robotics parks,” said Eric Gordon, a professor at the University of Michigan who focuses on entrepreneurship and technology. It provides for city streets without accidents, signals, traffic jams and separate lanes for self-driving vehicles.

In this next phase of passenger and road tests, technical complexities are increasing with unpredictable traffic patterns and meteorological factors such as fog and rain, plus ongoing problems with social awareness and acceptance.

“It will still take considerable time to commercialize autonomous driving on a large scale,” said Dong Wei, vice president and chief operating officer for safety at Baidu Intelligent Driving Business Group in Beijing.

Paid passenger tickets in a completely robot-free driver could be the next step in the commercial development of this transforming market.

Pony.ai, which is ranked Number 10 on CNBC Disruptor 50 for 2022, along with Baidu in Beijing, is leading the industry in launching billing robots to the public in China. The two companies began charging fares last November in Beijing for their robotics services, which have a driver who monitors the trip. In addition, Pony.ai launched a paid taxi service this May, including 100 AVs as traditional taxis in the Nansha district of Guangzhou. Both also tested AV and robotaxis in the United States, although Pony.ai’s driverless tests were stopped in California after a vehicle hit a lane divider and a street sign in Fremont.

China is focusing on smart transport as a national growth strategy and has identified several sections of major cities for testing. “If you’re looking for the perfect place to test autonomous driving, it’s hard to beat China for its ambitions,” Dunn said.

While China and US markets are developing closely in parallel, given increased US-China competition in technology innovation and restrictions on cross-border investment, a plausible scenario is “two global ecosystems, one led by China and one , which is led by the United States with its respective systems and governments, “Dunn said.” China does not want American companies to collect data, and Chinese tests in the United States face the same problem. Chinese AV companies are likely to support research and development in the United States but will be implemented in China for China. “

In the United States, industry leaders Waymo and Cruise expect to launch their own paid driverless taxi in San Francisco soon after several months of test trips with employees. In addition, Waymo plans to extend its driverless fees to downtown Phoenix after pilots in late 2018 for paying customers in suburban Chandler.

Argo AI starts driverless operations in Miami and Austin.

Courtesy: Argo AI

Supported by Ford and VW Argo-AI began working with autonomous test vehicles without a driver for safety in Miami and Austin, Texas, moving around employees. Argo is testing its technology for self-driving on the streets of eight cities in the United States and Europe, with some of its vehicles, with a safety driver, used by passengers in Miami Beach, Florida, through Lyft’s travel sharing network. Lyft has about a 2.5% stake in the company.

Amazon-acquired startup Zoox is custom-testing its cube-like robot in the Gulf, Seattle and Las Vegas area, without initially charging for travel.

Billions are betting by American and Asian automotive, technology giants

In pursuit of the opportunity, equity funding in AV technology companies exceeded $ 12 billion in 2021, more than 50% from 2020, according to CB Insights. Funding in the United States is dominated by Waymo, which reached $ 5.5 billion, including Alphabet, and Cruise, which is backed by $ 10 billion by GM, Honda and other investors, with a $ 5 billion credit line from GM Financial. Pony.ai, co-founder of the former lead developer of Baidu AV Peng in 2016, was funded with $ 1.1 billion, including a $ 400 million investment from Toyota.

AV start-ups have joined major carmakers and car transport services, such as Motional, set up in 2021 through a joint venture with Hyundai and pilots with Lyft. Uber has sold its self-management division, Advanced Technologies Group, to Aurora Innovation after Uber co-founder and former CEO Travis Kalanick highlighted self-driving as a priority. Aurora, invested by Amazon, Hyundai and risky companies Sequoia Capital and Greylock, is working on launching a trading system for robotic trucks by the end of 2023, followed by a robotics project.

Several other market segments are emerging as differentiators from commercial robotics companies. One of the more advanced, as it seeks to diversify from its search and advertising core, Baidu delivers its Apollo Go AV “brains” to robotic buses and other transit vehicles in China, while providing carmakers with solutions for self-driving Apollo. The monthly price of Apollo Go for five years is comparable to the cost of labor of a driver transported to major cities in China, a Baidu spokesman said. The company also sells intelligent transportation solutions with projects in 34 Chinese cities to improve traffic conditions, road safety and air quality. Baidu has also partnered with Geely (Chinese owners of Volvo) to fund its JIDU smart electric vehicle business and mass production of a robot car for marketing in 2023.

The production of robo-vehicles is expensive, but is pursued as another strategy for commercialization of the market. Cruise has partnered with GM and Honda to mass-produce Origin, an all-electric self-driving, shared vehicle that is due to leave GM’s Detroit Factory Zero assembly plant within a few years. Amazon-owned Zoox has built dozens of custom electric, stand-alone robots at its Fremont plant, which are being launched gradually. Waymo is expanding its current fleet of Detroit-made I-Pacers and Chrysler Pacifica hybrids and is working with Chinese carmaker Geely to equip its all-electric, specially designed AVs for American roads in the coming years. Pony.ai recently unveiled its sixth-generation autonomous driving system, expecting to equip a seven-seater Toyota Sienna and begin road tests in China this year with a 2023 robot axle.

Robot-powered delivery services are also emerging as a viable path to commercial scale and profitability. Cruise has partnered with Walmart in the Phoenix region to deliver groceries and plans to expand the service nationwide, said Gil West, Cruise’s chief operating officer. Nuro, an autonomous startup for Silicon Valley robotics, is testing a bot service for Walmart and Kroger customers in several cities and recently added 7-Eleven customers to Mountain View. This month, Uber began pilot food deliveries through sidewalk robots and self-driving cars in Los Angeles.

For Zoox, supplying Amazon with last-mile supplies from its shuttles is a possible scenario. “We haven’t ruled this out as a use case,” said Jesse Levinson, Zoox’s technical director and co-founder. “Our business model is to charge people money to drive. The biggest price of the vehicle to share the trip is the driver. We can depreciate the price of the vehicle with these tariffs for five years. “

It may seem illogical, but the AV space for long-distance trucks is moving perhaps the fastest in this emerging market. Jim Sheinman, founder, managing partner at Maven Ventures and early investor in Cruise, noted that Embark Truck and other AV carriers will help trillions of dollars in the market in many ways. “Not only by maintaining significantly lower transport costs, which will continue to be so important in a world of ongoing supply chain problems and inflation, but also in contributing to labor shortages for long-distance transport. as well as being much greener, ”Sheinman said. “Huge victories for everyone and for the planet,” he added.

One newcomer is the Pittsburgh-based Locomation, a hybrid semi-autonomous technology for two-truck convoys, with the driver of the leading vehicle tracking the journey while another does not work in the next truck and rests. “Looking for freight trucks and a shortage of drivers is helping to solve the problem,” said Cetin Mericley, co-founder of Locomation, which is testing with three national vehicle customers. “This system can double the efficiency of drivers, keep trucks running more often and speed up deliveries,” he said. “In many ways, in 2020, our initial autonomous delivery was a trailer full of TP.”

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