# China's first Robotaxi service provider, Pony.ai, was listed on the U.S. Nasdaq on Nov. 27 (local time). Founded in 2016, Pony.ai obtained its first autonomous driving permits in places like Beijing, Guangzhou, and Shenzhen in 2018. Another Chinese Robotaxi company, WeRide, was also listed on Nasdaq on Oct. 25.
# "Elon Musk, CEO of Tesla, and Donald Trump, the president-elect of the United States, could provide significant support for Musk's wager on autonomous vehicles." This was part of an article released by The Washington Post after Trump's election was confirmed following the U.S. presidential election on Nov. 5. Additionally, a Bloomberg report in mid-November indicated that the incoming Trump administration is prioritizing deregulation of fully autonomous vehicles within the Department of Transportation. Previously, Musk revealed the Robotaxi 'CyberCab,' which has neither a steering wheel nor pedals, on Oct. 10, describing it as a combination of Airbnb and Uber, stating it could provide taxi services when not in use.
The Robotaxi, which is expected to change the concept of land transportation for humanity by liberating driving, shows recent examples of accelerating its development. While previous mobility revolutions were driven by energy sources, this one is led by changes in driving agents, specifically the emergence of autonomous vehicles. Autonomous vehicles replace the need for human observation and judgment with mechanical devices and software. Various sensors, such as LiDAR, radar, cameras, and ultrasonic sensors, that function as the eyes of a human, collect numerous pieces of information from the road. This information is interpreted and analyzed by artificial intelligence semiconductors, which autonomously determine how to move and command the various parts of the vehicle.
The benefits of liberated driving are substantial. By utilizing time spent driving for various productivity enhancements, it can reduce social expenses by preventing accidents and traffic congestion caused by human errors. The automobile space is innovating to provide entertainment functions.
'Economy Chosun' examined the increasing expectations for Robotaxis due to the Trump administration's deregulation policies and the series of initial public offerings. It also explored the changes in daily life that Robotaxis are expected to bring.
Collaboration amidst competition between traditional vehicles and big tech
Traditional automobile manufacturers and the new mainstream big tech companies are engaged in a competitive struggle for supremacy in the autonomous driving industry, which is emerging as a game-changer. In particular, as autonomous driving requires a seamless blend of hardware (cars) and software (autonomous driving systems), we also see a trend of alliances between automotive and IT industries.
The U.S. Robotaxi market is taking shape as dominated by big tech companies. Waymo, the autonomous driving service subsidiary of Google's parent company Alphabet, is currently operating paid Robotaxis in cities such as San Francisco and Los Angeles in California, as well as Phoenix in Texas. It has completed over 20 billion miles (about 32 billion kilometers) of testing in order to expand its services to more cities. The data collected by Waymo Robotaxis enhances predictive capabilities regarding road users' behaviors and improves decision-making abilities of autonomous vehicles, thereby enhancing safety. Waymo has accumulated a total investment of $11 billion (about 15.72 trillion won).
On Oct. 10 at the 'We, Robot' event held at Warner Bros. Studio in Los Angeles, Musk, the CEO of Tesla, announced plans to launch a Robotaxi service in California and Texas starting in 2025. Tesla has projected mass production of the Robotaxi CyberCab by 2026, with a price set at below $30,000 (about 42.87 million won).
Uber developed its own technology in 2016 and partnered with Volvo, but abandoned its self-development after a fatal accident in 2018. It has since been providing delivery services through Robotaxis with Waymo in Arizona.
General Motors (GM) appears to be taking a step back. On Dec. 10, the company announced its plan to integrate its autonomous driving subsidiary, Cruise, with the GM technology team. Having ranked 3rd in the world in autonomous driving technology in 2023, GM seems to have withdrawn from the Robotaxi business.
China expands Robotaxis in all directions
Backed by government support, China is transforming itself into the world's largest autonomous driving testing ground. Baidu, China's largest search company, is conducting pilot operations in 11 cities, including Beijing, Shanghai, and Wuhan, through its autonomous driving service, Luobu kuaipao (萝卜快跑, Apollo Go), launched in August 2021. Among these, Wuhan City lifted restrictions on Robotaxi routes in August 2023, expanding the operational range of Apollo Go to the entire city (8494.4㎡). Baidu announced plans to launch Apollo Go outside of China in October 2024.
The internationalization of Chinese autonomous driving companies is accelerating, as seen with Pony.ai and WeRide being listed on Nasdaq. Toyota, which has a capital alliance with Pony.ai, unveiled the bZ4X electric vehicle developed for Robotaxis at the China International Import Expo held in Shanghai on Nov. 5. However, following the Biden administration, the incoming Trump administration has also implemented a policy to prohibit services from Chinese autonomous driving companies in the U.S.
South Korea presents autonomous driving foundry
Hyundai Motor Group is targeting the Robotaxi market through its subsidiary Motional. The Ioniq 5, which embodies Hyundai's electric vehicle technology, will be used as a Robotaxi. Simultaneously, it aims to expand its foundry business, which provides electric vehicles with reduced production costs to autonomous driving developers, and took its first step by signing a strategic partnership with Waymo on Nov. 4. This strategy aims to apply a business model similar to TSMC in semiconductors to autonomous vehicles.
Waymo and Hyundai plan to apply sixth-generation autonomous driving technology to the Ioniq 5, intended for Robotaxi services. This vehicle will be produced at the Hyundai Motor Group Metaplant America (HMGMA) being constructed in Georgia.
Hyundai has also begun discussions with Zoox, Amazon's autonomous driving subsidiary, regarding Robotaxi foundry collaboration. Zoox is reportedly requesting Hyundai to produce purpose-built vehicles.
Regulations and safety concerns pose challenges to Robotaxi expansion
The Trump administration is reportedly set to ease regulations surrounding Robotaxi operations in the United States. Currently, under U.S. federal regulations, fully autonomous vehicles without steering wheels and pedals cannot receive production and operational permits. Furthermore, the National Highway Traffic Safety Administration (NHTSA) under the Department of Transportation restricts the number of Robotaxis that automobile or Robotaxi service providers can deploy to 2,500. The Trump administration plans to lift these regulations.
Concerns over the safety of unmanned autonomous driving also pose obstacles to the expansion of Robotaxis. Philip Kauffman, associate professor at Carnegie Mellon University, noted, "For autonomous driving to be safe, AI must learn to handle rare situations on the road (deep learning), but the autonomous driving industry tends to underestimate the frequency of these unexpected scenarios."
The trend of countries blocking cross-border data transfers may hinder the management of autonomous driving services handled by headquarters abroad.
Plus Point
Can unprofitable Robotaxis continue to run?
Another obstacle hindering the expansion of Robotaxis is 'profitability.' For Tesla to establish itself in the Robotaxi market, competition with companies like Waymo is inevitable, but even Waymo, which has already accumulated considerable driving records, is struggling to achieve profitability.
Unlike traditional taxis, the Robotaxi business requires manufacturers or autonomous driving companies to directly own and manage all vehicles in operation. They must respond to breakdowns or accidents, and also directly provide maintenance, autonomous driving control, and service. According to a Lux Research report, the operating cost per mile (about 1.61 km) for autonomous Robotaxis is $0.42, which is two to three times that of regular cars. Additional costs for insurance, charging infrastructure, and management are also significant.
Motional recorded a deficit amounting to 2 trillion won over the three years from 2021 to 2023. Alphabet faced losses of $2 billion (about 2.86 trillion won) in the first half of 2024 from new ventures, including Waymo.
Zoox attempted to produce its own autonomous vehicles to reduce expenses, but is reportedly revising its plans due to financial strain from development costs. "Building an autonomous driving system, integrating vehicles, collecting data, and developing AI algorithms require immense capital and time," said Jesse Levinson, CTO of Zoox.