The "new game" of Robotaxi has already begun

In August, in the summer heat of Wuhan. In this vibrant commercial hub, the RoboTaxi has seamlessly integrated into the bustling traffic, driving quietly and steadily. They glide across the Yangtze River Bridge with a calm and precise demeanor, blending into the daily commute. For most citizens, this has become a common sight.

However, in the eyes of industry observers, this tranquility signals a profound transformation.

Gong Min, head of China automotive industry research at UBS Investment Bank, revealed a key fact during an online sharing session on August 27: "Baidu announced that in the second quarter in Wuhan, they have been able to achieve profitability on a per-vehicle basis."

This is a milestone signal for an industry that has long been "burning cash." It marks a historic shift in the story of Robotaxi, moving from a distant technological vision to a commercially viable blueprint that can be seriously examined.

The turning point for the Robotaxi industry may have arrived.

For a long time, the core issue hindering the commercialization of Robotaxi, aside from policy factors, has been an economic one: can the operating revenue of an autonomous vehicle cover its high manufacturing costs, research and development, and operational expenses?

In the past, the answer was unclear. But by 2025, the situation has undergone a qualitative change.

"In the second half of this year, the cost of autonomous taxis can almost be pushed below 300,000 RMB," Gong Min pointed out, "half of which is the cost of the vehicle itself, and the other half belongs to the autonomous driving suite."

Crossing this "300,000 cost line" means that the unit economics of Robotaxi finally has the potential to be established. Behind this is the significant cost optimization brought about by China's strong industrial chain.

Gong Min cited an example: the cost of LiDAR, a key sensor for autonomous driving, was around 5,000 RMB in 2022, but today "can be achieved at below 200 USD, approximately 1,300 RMB." It is this extreme pursuit of efficiency that has paved the way for Wuhan's profitability story.

The decrease in costs lays the foundation for scaled expansion. According to public information, leading players have defined 2025 as the "year of scaling," planning to expand their operational fleets to over a thousand vehicles by the end of the year.

In July, Shanghai announced a significant expansion of the Robotaxi operating area, extending services for the first time to the core area near the Lujiazui financial district, with Baidu and Pony.ai among the companies permitted to conduct fully autonomous commercial operations. Thus, all first-tier cities in China have opened the door to fully autonomous commercial Robotaxi.

UBS predicts that when technology reaches a critical point, it may usher in accelerated development. They project that by the early 2030s, only first-tier cities in China could form a Robotaxi fleet of 300,000 vehicles, with the final nationwide market demand potentially reaching 4 million. If this prediction comes true, China will create a new industry worth up to 183 billion USD, enough to attract global capital's attention If the decline in costs solves the question of whether Robotaxi can be profitable, then data and policy determine how far it can go and how fast it can run.

The essence of autonomous driving is a race for data. Algorithm iteration, model optimization, and extreme scenario handling capabilities all rely on massive amounts of real-world driving data. In this race, China undoubtedly has a unique advantage.

Earlier commercialization means that players can accumulate data at a faster pace, driving the "data flywheel" to spin faster. As vehicles move from remote testing areas into urban core areas and expand from daytime operations to 24-hour all-weather services, the quality and value of the collected data also grow exponentially. This data-driven barrier, once formed, is extremely difficult to overcome and will quickly consolidate the market position of the leaders.

At the same time, China's policy support also provides momentum for this race. From central to local levels, a series of regulations and standards aimed at promoting the development of smart vehicles have been introduced. On April 1 of this year, Beijing officially implemented new autonomous driving regulations, providing a clear legal framework for the operation of L3 and higher-level autonomous vehicles. Cities like Shenzhen and Guangzhou have also established mutual recognition mechanisms for testing permits, greatly reducing the testing costs and time for companies.

Gong Min emphasized the pragmatism and balance shown by the Chinese government in promoting this emerging phenomenon. On one hand, it requires technology companies to cooperate with local taxi companies to mitigate the impact of new technologies on traditional industries; on the other hand, it views the development of Robotaxi as a key link in achieving "new productive forces" and overcoming the "middle-income trap." This combination of "top-level design" and "market vitality" creates a favorable environment for the rapid development of Robotaxi in China.

When we shift our focus from current operational data and policy documents, a larger question emerges: What is the ultimate goal of Robotaxi?

It is certainly not as simple as "replacing drivers with machines."

According to UBS, Robotaxi and Advanced Driver Assistance Systems (ADAS) for mass-produced vehicles are currently two parallel development paths, but in the long run, they will inevitably converge. As the operational range of Robotaxi expands from urban core areas to the entire city and even intercity travel; as the autonomous driving capabilities of private cars are sufficient to free drivers, the entire social structure will be reshaped.

Elon Musk once predicted that the distinction between cars in the future will be more about intelligence. This is not only a judgment on business competition but also an insight into the future urban lifestyle. When travel costs are significantly reduced due to automation, and commuting time can be used for work or entertainment, the physical boundaries of cities will be redefined.

This is why the competition in the Robotaxi field is not only unfolding in China but is also heating up globally. From Waymo and Cruise in the United States to Baidu and Pony.ai in China, and Tesla entering the fray with FSD, this has become a competition among global tech giants concerning the future. This is not only a competition between companies but also a struggle for the definition of the next generation of urban infrastructure, transportation standards, and lifestyles Once the wheels of history start to turn, they will not easily stop. The self-driving cars smoothly cruising the streets of Wuhan carry not only passengers but also a nation's strategic ambitions and the firm steps of an entire industry moving from vision to reality. When the dawn of profitability first shines into the financial statements, its era truly begins