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WeRide, which passed the China Securities Regulatory Commission's overseas listing filing on August 25, 2023, submitted a prospectus to the SEC (U.S. Securities and Exchange Commission) on July 27, 2024, Beijing time. In terms of the most concerned performance, WeRide's revenue in 2021-2023 was 138 million yuan, 528 million yuan, and 402 million yuan, respectively, and its adjusted net losses were 427 million yuan, 402 million yuan, and 502 million yuan, respectively. Revenue in the first half of 2024 was 150 million yuan, a year-on-year decrease of 17.8%; the adjusted net loss was 316 million yuan, a year-on-year increase of 36.6%. "We have not been profitable since our inception, and this situation may continue in the future," WeRide reminded in its prospectus, "We rely on a small number of customers. In the first half of 2024, the two customers with the largest revenue contributed 52.4% of revenue."

Net loss widens

On July 27, WeRide submitted an application to the SEC to be listed on the Nasdaq. This was less than a week after the rumor that WeRide would be listed in the United States at the end of August this year (2024) was exposed, and one month before the China Securities Regulatory Commission's overseas listing registration notice expired.

In April 2017, WeRide was founded in Silicon Valley, USA, and completed the open road driverless test two months later. That year, Intel acquired Mobileye for $15.3 billion, Baidu established the Intelligent Driving Business Group, and autonomous driving became a hot topic in the technology circle.

Seven years later, WeRide's business has expanded to five sectors: Robotaxi (autonomous driving taxi), Robobus (autonomous driving minibus), Robovan (autonomous driving freight truck), Robosweeper (autonomous driving sanitation vehicle), and ADAS (advanced intelligence) solutions.

From 2021 to 2023, WeRide's revenue increased from 138 million yuan to 528 million yuan, and then fell to 402 million yuan; the adjusted net loss narrowed from 427 million yuan to 402 million yuan, and then expanded to 502 million yuan. In the first half of 2024, WeRide continued this trend, with revenue continuing to decline, down 17.8% year-on-year; the adjusted net loss expanded again, with a loss of 84.623 million yuan more than in the first half of 2023.

Regarding the expansion of net losses in the first half of the year, WeRide explained to the Beijing Business Daily reporter, "The company's R&D investment increased in the first half of 2024, with personnel cost investment increasing by 35% compared with the first half of 2023. It takes a certain period from R&D investment to commercial application, and it will not be immediately reflected in commercial revenue in the same period, but it will provide support for the company's future business development."

According to the prospectus, WeRide's R&D expenses are mainly composed of personnel expenses related to engineers responsible for designing, developing and testing autonomous vehicles. From 2021 to 2023, the R&D expenses are 443 million yuan, 759 million yuan and 1.058 billion yuan respectively. In the first half of 2024, the R&D expenses are 517 million yuan.

Sold 9 Robobuses in half a year

As WeRide said, the growth in R&D expenses did not drive revenue in real time.

The prospectus shows that WeRide's revenue comes from two aspects: sales of L4 autonomous driving vehicles, mainly including Robobus, Robotaxi and Robosweeper and related sensor kits; providing L4 autonomous driving and ADAS services, including L4 autonomous driving operation and technical support services and ADAS R&D services. The above two parts are referred to as products and services.

In 2021-2022, WeRide's product revenue contributed more, accounting for 73.5% and 64% of the total revenue respectively; in 2023, service business became the main source of revenue, contributing 348 million yuan, accounting for 86.5% of the total revenue; in the first half of 2024, service revenue accounted for 86%.

WeRide stated in its prospectus that product revenue in the first half of 2024 increased by 13.4% year-on-year to 21 million yuan, mainly due to the increase in Robobus sales from 4 in the same period last year to 9, during which 4 Robosweepers were also sold. This growth was partially offset by the decline in Robotaxi sales. Service revenue in the first half of 2024 increased by 21.3% year-on-year to 129 million yuan, mainly due to a decrease of 43.9 million yuan in ADAS R&D service revenue due to the company's reduced revenue from customized R&D services for Bosch, and a decrease of 17.2 million yuan in Robotaxi and Robovan operations and technical support services, which was partially offset by an increase of 26 million yuan in Robobus and Robosweeper operations and technical support service revenue.

WeRide also told the Beijing Business Daily reporter, "The company's intelligent driving business increased in 2023 and the first half of 2024, and the intelligent driving business belongs to services, so the proportion of overall service revenue has increased."

"WeRide is in a stage of adjustment from selling products to selling services," said Li Jinqing, an analyst at Bida. "One objective fact is that competition among smart driving companies is fierce, and many of them have backgrounds in OEMs."

The revenue from the two major customers accounts for more than 50%

In the prospectus, WeRide also listed risk factors, "We rely on a small number of customers, including certain shareholders of the company, to generate the vast majority of our revenue. In 2021, our six largest customers accounted for 89.8% of our total revenue in the same year. In 2022 and 2023, our five largest customers accounted for 72% and 77.5% of our respective annual total revenue. In the first half of 2024, our top two customers accounted for 52.4% of our total revenue."

"The business model has not yet been verified" also appears in the risk factors section of the prospectus. "We are in the early stages of commercialization and plan to start commercial production of Robotaxi in 2024 and 2025, respectively, and prepare for large-scale commercialization. We expect that revenue from the Robotaxi business will increase after achieving these commercialization milestones."

When communicating with the Beijing Business Daily reporter, Zhang Ning, vice president of Pony.ai, also emphasized scale, saying, "2024-2026 is the key to commercialization for Pony.ai and the entire industry. Running a closed loop of commercialization means reducing costs and increasing efficiency based on scale." Like WeRide, Pony.ai is also an autonomous driving company that entered the Robotaxi track early on.

Currently, WeRide is conducting autonomous driving R&D, testing and operations in 30 cities in 7 countries around the world. Specifically in China, it provides services in cities such as Beijing and Guangzhou. Due to its early deployment of Robotaxi, the outside world's impression of WeRide is more at the level of Robotaxi service provider.

A Beijing Business Daily reporter logged into the WeRide Go App operated by WeRide and found that users can call Robotaxi and Robobus through the app. Specifically in Guangzhou, the Robotaxi fee includes the base price + renewal price. The base price is 12 yuan for the first 3 kilometers; the renewal price is 2.6 yuan per kilometer for 3-15 kilometers; 20% surcharge for 15-25 kilometers; and 50% surcharge for more than 25 kilometers.

With both intelligent driving business for B (enterprises) and Robotaxi business for C (users), where will WeRide make money in the future? Zhang Xiang, Secretary General of the International Association for Intelligent Transportation Technology, told the Beijing Business Daily reporter, "The Robotaxi industry is not yet mature. WeRide will not be able to make money from users' money through Robotaxi in 3-5 years. I think it wants to showcase its technology through services such as Robotaxi and Robobus, and ultimately attract car companies to buy autonomous driving solutions."

Beijing Business Daily reporter Wei Wei