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Baidu’s autonomous taxi division anticipates becoming profitable in the coming year.

Chinese tech company Baidu announced that its Apollo Go robotaxi arm is expected to turn profitable in the coming year. This projection comes as Tesla’s Elon Musk intensifies efforts in the robotaxi sector, aiming to bolster Tesla’s standing amidst revenue declines. Baidu is a key player in China’s emerging robotaxi market, having received approval from a Beijing district to begin charging fares in November 2021.

A driverless robotaxi autonomous vehicle developed by Baidu Apollo is shown driving along a street in Beijing.

Jade Gao | Afp | Getty Images

While most vehicles currently have a human safety operator onboard, Baidu and start-up Pony.ai were officially permitted by a Beijing district to charge fares for fully autonomous robotaxi rides in September 2023. In the last three months of 2023, Apollo Go facilitated approximately 839,000 rides, with 45% of orders in Wuhan being fully driverless by the end of the year.

Baidu’s efforts are focused on increasing usage, reducing labor costs per ride, and driving down the cost of the vehicles. The company recently unveiled the 6th generation of its Apollo robotaxi, priced at around 200,000 yuan ($28,169) — less than half the cost of the previous iteration. Baidu plans to deploy 1,000 of these 6th generation robotaxis in Wuhan this year, where it already operates several driverless vehicles.

In a press release, Baidu stated that with decreasing costs and rising orders, Apollo Go’s unit economics (UE) are approaching breakeven, with profitability expected by 2025. In contrast, competitor Pony.ai is gearing up for a listing outside mainland China, as reported by the China Securities Regulatory Commission website in April.

Despite advancements, some voices in the auto industry, like Xpeng Vice Chairman Brian Gu, remain cautious about fully autonomous vehicles, citing the need for extensive regulatory approvals for operation. Gu recently indicated that he does not anticipate robotaxis becoming a substantial business for at least another five years.

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