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Recently, WeRide, a domestic autonomous driving technology company, announced its plan to go public in the United States. After submitting its prospectus to Nasdaq, it was labeled as "the first Robotaxi stock" and "the first general autonomous driving stock" by the market, attracting widespread attention.

As a company that has been deeply engaged in the field of autonomous driving for many years, WeRide's IPO marks that the application of its autonomous driving technology has matured.

According to Frost & Sullivan data, the market size of China's taxi and shared travel will be 368 billion yuan and 354.7 billion yuan respectively in 2023, and are expected to increase to 487.6 billion yuan and 751.3 billion yuan respectively by 2028, with annual compound growth rates of 5.79% and 16.2% respectively. These two major markets are potential alternative markets for Robotaxi (driverless taxis), attracting a large number of industry chain companies to enter the market.

Analysis of the background of domestic intelligent driving solution providers shows that they are mainly divided into several factions, including Baidu, Google, Microsoft, Amazon, Intel, and academia. Among them, the Baidu ecosystem is the largest, involving companies such as Pony.ai, WeRide, Yuanrong Qixing, Momenta, China Intelligent Driving, Inceptio Technology, etc., which have a huge influence in China and even the world. It is worth noting that recently, Baidu-affiliated intelligent driving companies have launched IPO plans one after another, and are expected to stand out in the future market competition with the help of capital.

A large number of intelligent driving solution providers rushed into the capital market

Robotaxi is just one of the application scenarios of high-level autonomous driving. Robobus (driverless bus), Robovan (autonomous driving truck), Robosweeper (autonomous driving sanitation vehicle), etc. also have broad market demand. Among them, Robotaxi has the largest market size and the most players, and is highly sought after by the industry chain.

Recently, thanks to the breakthrough operation of Baidu Apollo's Carousel in Wuhan, the industry has once again set off a high-end intelligent driving craze. It is worth noting that along with it, a large number of companies in the intelligent driving industry chain have successively entered the capital market, and some companies have successfully listed. Some industry insiders said that 2024 will be the IPO year for intelligent driving companies.

Analysis found that Chinese smart driving industry chain companies are mainly seeking to list on the Hong Kong Stock Exchange or the U.S. securities market.

Among them, platform operators and smart driving supply chain companies prefer the Hong Kong Stock Exchange, such as travel platforms such as Didi Chuxing, Ruqi Travel, and Cao Cao Travel, parts manufacturers or solution providers such as Youjia Innovation, Zhixing Technology, Boya Internet of Vehicles, and Zongmu Technology, and component suppliers such as Heizhima Intelligent, Horizon Robotics, Jinko Electronics, and RoboSense. In addition, industry chain companies such as Fuertech, Momentum Travel, Xiangdao Travel, T3 Travel, and Xinchi Technology are also interested in impacting the Hong Kong Stock Exchange.

However, solution providers with high-level autonomous driving R&D capabilities prefer to list on the U.S. stock market. Among them, WeRide has recently submitted a filing to the U.S. Securities and Exchange Commission, with an estimated valuation of US$5 billion. Another local solution provider, Pony.ai, also plans to list on Nasdaq or the NYSE. It is currently valued at US$8.5 billion and is considered one of the most valuable autonomous driving companies in the world. According to information disclosed by the China Securities Regulatory Commission, Pony.ai completed its U.S. stock IPO filing in the first half of this year, and there are reports that the company is expected to go public in September. In addition, Momenta, which has received investment from SAIC Group, has also recently completed its overseas listing filing, and there are reports that the company will complete its U.S. IPO in the second half of this year or the first half of next year.

Unlike Hong Kong stocks, there are not many intelligent driving parts companies planning to list in the United States. Recently, only Hesai Technology has successfully IPOed. It is still unknown whether CoreEngine Technology will follow Ecarx Technology and eventually choose to go public in the United States. Since terminating its U.S. IPO in 2021, PlusAI has not announced a timetable for restarting its IPO.

Regarding the reasons why autonomous driving companies prefer to list on the U.S. stock market, some industry insiders believe that although the IPO threshold for Hong Kong stocks is declining, there are disadvantages such as low market capitalization, liquidity concentrated in leading companies, and a high probability of listing underperforming. For example, Heizhima Intelligent's stock price fell 29.96% on the first day; the U.S. stock IPO mechanism is relatively mature and can often obtain larger financing scales, better meet the fundraising needs and long-term development needs of technology companies, and can attract leading intelligent driving companies to go public.

Polarization may accelerate

Behind the IPO plans of smart driving companies is the survival of the fittest, with international companies being the first to be hit. In recent years, well-known companies such as Argo AI, Ghost, Embark, and Location have gone bankrupt. Cruise supported by General Motors, Waymo created by Google, Motional taken over by Hyundai, and TuSimple have also fallen into development difficulties to varying degrees.

Although some domestic intelligent driving companies such as Roadstar, Kingkong Intelligent Card, and Qiangua Technology have been liquidated, the overall survival environment is better than that of international companies. There are still a large number of active intelligent driving companies, such as Deepway, Idriverplus, WeRide, Pony.ai, Yuanrong Qixing, AutoX, Momenta, Didi Woya Technology, Qingzhou Zhihang, Yuse Technology, and PlusAI Technology. TuSimple, which delisted from the US stock market, has also shifted its focus to the Chinese market.

However, as of now, there have been no profitable cases among domestic intelligent driving companies, and the risk of capital chain rupture is increasing. For example, WeRide has accumulated losses of 5.17 billion yuan in the past three and a half years, while its total revenue is only 1.22 billion yuan; TuSimple had a net loss of 221 million US dollars in the first three quarters of 2023, with revenue of only 307,000 US dollars.

Not only that, looking at the entire intelligent driving industry chain, profitable start-ups are rare. Saimu Technology, which focuses on intelligent connected simulation testing, is one of the few companies that have achieved profitability; Guotai Junan predicts that Baidu's Robotaxi operating platform Luobo Kuaipao is also expected to break even within the year.

At the same time, supported by a series of national policies in recent years, smart driving industry chain companies have accelerated their market competition, and capital has become an important competitive means for some leading companies. However, the author found that many of the leading domestic smart driving solution providers have close ties with Baidu.

Among them, among the three intelligent driving companies that went public in the United States, the founders of WeRide and Pony.ai are both from Baidu's intelligent driving team. In addition, the founders or executives of companies such as Kuandeng Technology, Mainline Technology, Mushroom AutoLink, Hodo Technology, China Intelligent Driving, Inceptio Technology, Juefei Technology, Yuanrong Qixing, Momenta, and Jianzhi Robotics are also mostly from Baidu. Zhixingzhe and Deepway have received investment support from Baidu. In addition to the intelligent driving companies, in terms of supply chain, intelligent driving chip supplier Horizon Robotics and lidar provider Tudatong also have deep roots with Baidu, forming a huge Baidu-based intelligent driving ecosystem.

Among the non-Baidu-affiliated intelligent driving companies, TuSimple, PlusAI, and AutoX are academic companies, with founders from Caltech/Nanyang Technological University, Stanford University, and MIT, respectively. Wu Gansha, founder of UISEE, was once the dean of Intel China Research Institute. Momenta belongs to the Microsoft/SenseTime faction, and QINGZHOU Zhihang is the Chinese version of Waymo. Among these companies, only Momenta is currently trying to enter the capital market.

As leading enterprises begin to impact the capital market, some intelligent driving companies that have not yet launched IPOs are facing development obstacles. For example, HoloMatic was recently exposed to the risk of capital chain rupture due to its failure to reorganize with GAC. The company is currently trying to maintain operations by disbanding some core departments and stopping R&D activities. Qingzhou Zhihang has also been reported to delay salary payments and layoffs since the beginning of the year. In addition, many intelligent driving companies are reported to have risks such as financial pressure, loss of orders, and unstable teams. TuSimple's future is also uncertain after delisting.

Industry insiders said that the joining of Chinese intelligent driving industry chain companies into the IPO army will accelerate the polarization of the industry. After listing, leading companies will speed up their efforts to seize the market, resulting in a sharp increase in pressure on latecomers to exit the market. The intelligent driving cold wave that once swept Europe and the United States may enter the Chinese market ahead of schedule.

(Proofread by Deng Qiuxian)