According to the Smart Finance App, GTJA Securities believes that with mature technology, reduced hardware costs, and improvement in laws and regulations and basic infrastructure, self-driving online car-hailing company Luobo Kuaipao has achieved preliminary success in Wuhan, challenging the taxi industry. This successful business model of Luobo Kuaipao may lead to discussions on structural unemployment of taxi and online car-hailing drivers due to technological advances in the society, which has also been observed in the Baidu search index by the team. In addition, Tesla may release Robotaxi on August 8, which may further catalyze the industry’s development. Self-driving is expected to become the mainline in the market over the next three months.
Investment suggestions: Luobo Kuaipao's successful commercial model in Wuhan is expected to be replicated in other areas. Self-driving may challenge the taxi and online car-hailing industries, with three main investment directions: 1. Internet companies that master self-driving technology; 2. Industry chain companies that produce and supply vehicles, components, or IT services for internet companies; 3. Enterprises related to self-driving infrastructure and car-road-cloud technology. Recommended targets: Tongxingbao, China TransInfo Technology, and benefiting targets: Baidu Group-SW, Jiangling Motors Corporation, VanJee Technology, Shenzhen Genvict Technologies Co., Ltd., Guotong Electric Circuit Co., Ltd., NavInfo Co., Ltd., Shenzhen RoadRover Technology Co., Ltd., Shencheng Jiaotong.
Luobo Kuaipao is expected to achieve profitability in the self-driving online car-hailing business model. Luobo Kuaipao is a self-driving travel service platform under Baidu, which has opened passenger-carrying test operation services in 11 cities and conducted fully driverless test operations in Beijing, Wuhan, Chongqing, Shenzhen, and Shanghai. Compared with those driven by humans, self-driving online car-hailing versions are cheaper in price and better in passenger experience. According to Luobo Kuaipao’s plan, it will achieve full coverage in Wuhan by 2024 and put 1,000 sixth-generation mass-produced self-driving cars into operation. It is expected that the operating cost per car will significantly decrease with the increase of delivery volume in the future, and scale effect may emerge. Luobo Kuaipao is expected to reach break-even in Wuhan by the end of 2024 and become profitable in 2025.
Three mature conditions have been met for self-driving to change the taxi industry. GTJA Securities believes that the three mature conditions for self-driving to change the taxi industry at this stage are: 1. Mature technology. On May 15, 2024, Baidu released the world's first large-scale autonomous driving framework that supports L4 level, which is considered safer than human driving with over 10 times higher safety than human drivers and can cover complex citywide scenes. 2. Reduced per car cost. The sixth-generation self-driving car is priced at only 0.2 million yuan, which may provide opportunities for single-car profit by a significant cost reduction. 3. Policy and infrastructure support. The “Notice on Pilot Work for Smart Networked Vehicle Access and Road Testing” issued at the end of 2023 provides policy protection, and the construction of the car-road-cloud infrastructure in recent years provides infrastructure support for self-driving. With these three favorable conditions, self-driving is theoretically applicable to challenge the car rental industry.
The society is paying attention to self-driving as the primary line. GTJA Securities believes that social attention is needed to upgrade a topic to the primary line. ChatGPT was released in October 2022 and the AI market did not take off until media coverage in February 2023. Luobo Kuaipao's successful commercial model in Wuhan is expected to trigger discussions on structural unemployment caused by technological advances in the society among taxi and online car-hailing drivers. GTJA Securities has also observed this phenomenon in the Baidu search index. In addition, Tesla may release Robotaxi on August 8, which may further catalyze the industry’s development. Self-driving is expected to become the mainline in the market over the next three months.
Risk warning: The acceptance of self-driving may fall short of expectations, and major safety accidents may occur.