Apollo Robotaxi is operated in Shougang Park as Baidu launches China’s first driverless taxi service on May 2, 2021 in Beijing, China.

It’s Luke | Qianlong.com | China Optical Group | Getty Images

For years, Alphabet’s Waymo and other leaders have promised that self-driving cars are about to turn. But that future has yet to come. why not?

“In a word, it’s complicated,” said James Bing, CEO and co-founder of Pony.ai, an independent car company. “Every time a technology breakthrough happens, there are challenges. We have artificial intelligence, fast computer chips, sensors. It’s all solvable by seamlessly fit all the pieces together. 99.9% is not good enough to master the technology.”

Despite promises of saving lives, combating climate change, and cost-effective driving, the reality is that “the nirvana of the autonomous vehicle is over 10 years old,” said Michael Dunn, CEO of automated technology consultancy ZoZoGo. “While it is not impossible to get there, even the most advanced technologies do not yet exist and are used primarily in confined areas where things can be predicted. We are very 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 have been slow to scale and are seen by many as novelty. Additional road tests are needed to resolve technical issues. Regulations for allowing autonomous vehicles are still evolving by city, state and country. The high price tags hovering above $100,000 for an AV-equipped vehicle are a disadvantage to the individual purchases of most buyers. Marketing is still going on. Safety concerns remain, particularly after a fatal accident in March 2018 involving an Uber in Tempe, Arizona and multiple accidents involving a self-driving Tesla.

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However, market leaders are betting big on smarter transportation technology and testing its applicability, logging thousands of road miles to train autonomous driving algorithms and AI sensors to drive better than humans in all kinds of weather and unpredictable conditions. Tech 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 that is poised to reach 12% of new car registrations globally by 2030. Meanwhile. Same, Tesla continues its work on semi-autonomous autopilot and autonomous driving systems.

A promising future for robotics, automated delivery

Now after a decade and some rough beginnings, robotic engines, robot-driven deliveries, and autonomous trucks are emerging as the most promising money makers in the market.

“The passenger call system is a poor business model with unhappy human drivers and urban mobility problems. The next great thing could be fleets of automated taxis,” said Eric Gordon, a professor at the University of Michigan, where he focuses on entrepreneurship and technology. It envisions urban streets free of accidents, honking, traffic jams, and lanes designated for self-driving cars.

In this next phase of passenger and road testing, technical complexities are increasing with unpredictable traffic patterns and weather factors such as fog and rain, as well as ongoing social awareness and acceptance issues.

“It still takes a significant amount of time for autonomous driving to be widely marketed,” said Dong Wei, vice president and chief safety operations officer for Baidu Intelligent Drive Business Group in Beijing.

Passenger fare paid in driverless automated taxis could be the next step towards the commercial development of this transformative market.

Pony.ai, which ranked No. 10 on the 2022 CNBC Disruptor 50 list, along with Baidu in Beijing, has led the industry in launching automated taxis to the public in China. The two companies began charging last November in Beijing for the services of their bots, which have a secure driver monitoring the flight. In addition, Pony.ai started a paid taxi service in May which includes 100 taxis as traditional taxis within Guangzhou’s Nansha District. Both were also testing self-driving vehicles and robotics in the US, although Pony.ai’s driverless tests were suspended in California after a car crashed into a lane divider and street sign in Fremont.

China is targeting intelligent transportation as a national growth strategy and has designed several departments in major cities for testing. “If you are looking for the perfect place to test autonomous driving, it is hard to beat China for its ambition,” Dunn said.

While the Chinese and American markets are developing closely in parallel, given the increasing competition in technological innovation between the United States and China and restrictions on cross-border investment, one plausible scenario is “two global ecosystems, one led by China and the other by the United States with its own regimes and governments.” “China does not want US companies to dump data and China to test in the US faces the same problem. Chinese AV companies are likely to maintain R&D in the US but they are spreading in China for the benefit of China.”

In the US, industry leaders Waymo and Cruise expect to soon launch their own fully paid driverless automated taxis in San Francisco after several months of testing rides with employees. Additionally, Waymo plans to expand its toll-free, driverless flights to downtown Phoenix after pilots in late 2018 drive customers in suburban Chandler.

Argo AI begins driverless operations in Miami and Austin.

Courtesy: Argo AI

Ford and Volkswagen-backed Argo-AI have begun operating human safety driverless self-test vehicles in Miami and Austin, Texas, and commuting employees. Argo is testing its self-driving technology on the streets of eight cities across the US and Europe, with some of its vehicles, with a human safety driver, being used by commuters in Miami Beach, Florida, through the Lyft ride-sharing network. Lyft owns approximately 2.5% of the stock in the company.

Custom-acquired Amazon-acquired startup Zoox is testing its cube-like robot hub in Bay Area, Seattle and Las Vegas, without charging rides initially.

Billions bet by auto and technology giants in the US and Asia

Looking for opportunity, equity financing in AV technology companies topped $12 billion in 2021, up more than 50% from 2020, according to CB Insights. US funding is dominated by Waymo, which has topped $5.5 billion including from Alphabet, and Cruise, backed by $10 billion from General Motors, Honda and other investors, with a $5 billion line of credit from GM Financial. . Pony.ai, co-founded by former Baidu AV lead developer Peng in 2016, has been funded with $1.1 billion, including a $400 million investment from Toyota.

AV startups rely on major automakers and passenger services, for example, Motional, which was formed in 2021 through a joint venture with Hyundai and pilots with Lyft. Uber has sold its self-driving unit, Advanced Technologies Group, to Aurora Innovation, after Uber co-founder and former CEO Travis Kalanick described self-driving as a priority. Aurora, which has been invested in by Amazon, Hyundai, Sequoia Capital and Greylock, is working to launch a commercial robotic truck system by late 2023, to be followed by the Robotaxy project.

Many other market segments are being carved out as differentiators by companies developing a commercial automated hub. One of the most forward-thinking companies in its quest to diversify from research and advertising, Baidu is supplying the “brains” of Apollo Go AV to robot buses and other transportation in China while providing Apollo self-driving solutions to automakers. A Baidu spokesperson said the monthly price of Apollo Go over five years is comparable to the labor cost of a taxi driver in major cities in China. The company also sells smart transportation solutions with projects in 34 Chinese cities, to improve traffic conditions, road safety and air quality. Baidu has also teamed up with Geely (the Chinese owners of Volvo) to fund its JIDU smart electric car business and produce a robotic car for launch in 2023.

Automated vehicle production is expensive but it is pursued as another market marketing strategy. Cruise has partnered with GM and Honda to mass produce the Origin, a fully self-driving, joint electric vehicle set to roll out within a few years from General Motors’ Factory Zero assembly plant in Detroit. Amazon-owned Zoox has built dozens of custom-designed, electric, and autonomous robot hubs in its Fremont plant, and they are being rolled out gradually. Waymo is expanding its existing fleet of Detroit-made I-Pacers and Chrysler Pacifica hybrid passenger cars and is collaborating with Chinese automaker Geely to get its all-electric, purpose-built vehicles for American roads in the coming years. Pony.ai recently unveiled its sixth-generation self-driving system, and expects to equip the seven-seat Toyota Sienna and begin road testing in China this year with robotaxis in 2023.

Robotic delivery services are also emerging as a viable path towards commercial scale and profitability. Jill West, Cruise’s chief operating officer, said Cruise has partnered with Walmart in the Phoenix area to deliver groceries, and plans to expand the service nationally. Nuro, a robotics startup in Silicon Valley, is testing a bot service for Walmart and Kroger customers in several cities, and recently added 7-Eleven customers in Mountain View. This month, Uber pilots began delivering food via robot docks and self-driving cars in Los Angeles.

For Zoox, providing Amazon with deliveries on the last mile of its shuttles is a possible scenario. “We haven’t discounted this as a use case,” said Jesse Levinson, chief technology officer of Zoox and co-founder. “Our business model is to charge people money to take a ride. The biggest cost for a ride-sharing vehicle is the driver. We can amortize the cost of the car at these prices over five years.”

It may seem counterintuitive, but the long-haul trucking space is moving perhaps the fastest in this evolving market. Jim Scheinman, managing partner at Maven Ventures and senior investor in Cruise, noted that Embark Truck and other AV trucking companies will help the trillion-dollar market in several ways. “Not only by keeping our shipping costs significantly lower which will continue to be extremely important in a world of ongoing supply chain problems and inflation, but also helping with labor shortages in long-distance trucking as well as being more environmentally friendly,” Scheinman said. . “Colossal victories for everyone and the planet,” he added.

One newcomer is Pittsburgh-based Locomation, a semi-autonomous hybrid technology for two-truck caravans in which one driver in the main vehicle watches the ride while another is off duty in the subsidiary truck, and takes a break. “With trucking demand and a shortage of drivers, this helps solve the pain point,” said Cetin Mericli, co-founder of Locomation, which is testing with three local truck customers. “This system can double the efficiency of drivers, keep trucks running more frequently, and speed up deliveries,” he said. “In 2020, the inaugural standalone delivery was a trailer full of TP.”

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