Off to a flying start: how Baidu stands to lose the NEV race

Surrounded by blood thirsty enemies, Baidu – for a long time the only tech guy in the marketplace – might not have what it takes to prosper when the knives are out.

Photo from CFP

Photo from CFP

By KE Xiaobin


As Baidu stunned the Shanghai auto show with the idea that R&D for autonomous driving would be complete within six months, Huawei, which had repeatedly stated that it would never build cars, unveiled a car.

Autonomous driving  is the only game in town, both for the tech guys and the capital market. According to the Chinese Entrepreneur, from November to March, nine companies raised a total of US$3.4 billion (22.08 billion yuan) in EV projects.

When robots rule the streets

To win the unmanned-driving race, Huawei and Baidu followed the same line: work with automakers, gather data and improve the system. Then Baidu decided to build cars.

Cars filled with passengers, routinely zooming around the streets of Shanghai at rush hour without drivers, still seems a lot further than six months away. Could Baidu, one of the first off the grid in this race, already be around the bend and out of sight?

Baidu has put in 10 million hard kilometers of test driving, according to LI Zhenyu, head of Baidu’s intelligent driving group (IDG). Autonomous vehicles are already in Beijing, Shanghai, and Guangzhou. Baidu Apollo predicts a mass production peak in the second half of this year, and a new car to be launched every month. According to Li, within the year, the smart driving area will include 20 cities, rising to 100 next year.

In 2017, the IDG came up with Apollo. Apollo GO is a worldwide travel service with more than 200,000 passengers. Baidu plans to open Apollo GO self-driving taxis in Beijing and Changsha, expanding to another 30 cities in the next three years. At least 3,000 self-driving taxis will carry 30 million passengers.

During the Shanghai International Automobile Industry Exhibition this year, the latest versions of Apollo's modularized Lego-style products were on display. Carmakers can freely combine off-the-shelf units to customize their intelligent driving systems. Apollo has struck deals with 70 automobile brands, and more than 600 models are equipped with Apollo tech.

Autonomous driving relies on sensors such as radar and cameras, backed up with algorithms, maps, and online resources. Baidu has intensively invested heavily in a number of companies, including Velodyne LiDAR, vision specialist Zhongke Huiyan and WM Motors. These investments show Baidu is still investigating different sensing paths such as "pure vision" and "lidar."

A few days ago, Wang Yunpeng, Baidu's autonomous driving boss, said in an interview that the company understands lidar best, but the system is still a long way from mass production and consequently very expensive. "The price cannot be increased by 100,000 yuan (US$15,400) just because of lidar," he said.

Does Huawei dream of electric cars?

In recent years, Baidu's market value has not prospered, perhaps due to the costs of developing robot cars. But the most difficult times are perhaps behind them. It wasn't until last year that other Internet companies decided to shackle themselves to this millstone and huge costs lie ahead for them all.

Nevertheless, Baidu suddenly faces grim-faced competition into booting it from the marketplace. Huawei, Didi, and Xiaomi are all signed up for their own electric car dreams and for a long time in the future, it looks like Huawei and Baidu will be at each other's throats.

When Baidu was growing up, the NEV market was all green fields where harmless boffins frolicked. It seems highly unlikely that a company that grew up in this benign environment will emerge as the chosen one when the bloodletting is tough. Only the lucky and strong will survive.