China's Robotaxi Market: Penetration Rate Will Rapidly Increase, Single Vehicle Operation Approaching Break-Even, LiDAR is the Key to Cost Reduction

The Chinese Robotaxi (autonomous taxi) industry is reaching a critical turning point.

According to news from the Chasing Wind Trading Desk, Barclays analyst Jiong Shao and his team stated in a report released on the 28th that there are currently about 2,000 Robotaxis in operation nationwide. With the improvement in road coverage and the expansion of operator fleets, the Robotaxi industry is expected to enter a period of accelerated growth in the next five years, with an expected scale deployment of 300,000 to 500,000 units by 2030, with a penetration rate of 5-10%.

The report emphasizes that the manufacturing cost per vehicle for Robotaxis in China has now dropped to $35,000 to $40,000, which is basically in line with the target cost of Tesla's Cybercab. Thanks to the significant decrease in the cost of lidar and the substantial optimization of overall vehicle manufacturing costs, leading companies in the Robotaxi industry are close to breakeven at the operational level per vehicle.

The report predicts that by 2030, the overall vehicle manufacturing cost is expected to decrease by more than 30%, and the operating cost per vehicle is expected to drop by another 60%.

Market penetration is expected to achieve leapfrog growth

The report shows that China's ride-hailing market has over 500 million users, with an annual order volume of about 16 billion, and an annual growth rate of about 10%. In the overall on-demand mobility market, ride-hailing and taxis each account for 50% of the market share.

Robotaxis primarily compete in the on-demand mobility market of first- and second-tier cities, involving a total market size of 4.5 to 5 million vehicles.

Currently, the penetration rate of Robotaxis in the overall accessible market is only 0.05%. Even in Wuhan, considered the "most friendly city" for Robotaxis, the penetration rate is only about 2%.

The report predicts that by 2030, China will deploy 300,000 to 500,000 Robotaxis, with a penetration rate of 5-10% (possibly 7%). Among them, Wuhan will lead with a 30% penetration rate, while Beijing and Shanghai will reach 10%, and Guangzhou and Shenzhen will each reach 12%.

This growth forecast is mainly based on the improvement in road openness.

Barclays believes that the trajectory of Robotaxi adoption will be similar to the development process of the electric vehicle market in China. Currently, the development stage of Robotaxis is comparable to the electric vehicle market in 2015-2016, where technology has matured but large-scale application is still limited by the key bottleneck of insufficient operational area coverage.

The report shows that currently, only about 3% of urban roads in China are approved for Robotaxi operations, with 70% concentrated in four first-tier cities and Wuhan. Wuhan has opened about 68% of its roads for commercial operations, while the opening ratio in other first-tier cities is generally below 20%.

Operating per vehicle is close to breakeven point, and manufacturing costs are expected to drop by another 30% in the next five years

Barclays analysis shows that excluding initial R&D costs, the operating efficiency of Robotaxis in China may be close to or have reached breakeven. For example, Baidu Apollo's operations in Wuhan have achieved profitability at the vehicle level. **

According to the report, the current annual cost of operating a Robotaxi in China is approximately 100,000 yuan, with a per-trip cost of about 18 yuan.

In the cost structure of Robotaxi operations, vehicle depreciation accounts for about 50% of the total cost, labor costs at the operation center account for about 20%, and other operating expenses (charging, insurance, licensing, etc.) account for about 30%.

Among them, cost advantages are a key factor for China's Robotaxi to lead globally. According to the report, over the past five years, the manufacturing cost of Robotaxi has significantly decreased by 80%.

This cost advantage is mainly attributed to the plummeting prices of LiDAR. The report shows that the cost of LiDAR has dropped from a significant share of the total vehicle manufacturing cost in the early days to about 15% currently.

Taking Baidu Apollo's latest RT6 model as an example, its LiDAR cost has dropped sharply from 700,000 yuan five years ago to 4,000 yuan now, with hardware manufacturing costs reduced by about 85% over seven years; the manufacturing cost of XPeng's seventh-generation mass production model is about 300,000 yuan, which is also more than a 70% decrease compared to the sixth-generation model's autonomous driving kit cost.

By 2030, the report predicts that the manufacturing cost of Robotaxi will decrease by more than 30%, with annual operating costs potentially dropping to 80,000 yuan, per-trip costs dropping to 7.3 yuan, and per-kilometer costs dropping to 0.7 yuan, a further reduction of about 60% from current levels.

This cost reduction mainly relies on economies of scale, optimization of dedicated vehicle designs, and increasing the ratio of remote safety controllers from the current 2 people supervising 30 vehicles to 2 people supervising 100 vehicles.