Thursday, November 30, 2023
Self-DrivingGAC Boosts Investment in Didi’s Auto Driving Venture with up to $1.49...

GAC Boosts Investment in Didi’s Auto Driving Venture with up to $1.49 Billion

According to China’s, Guangzhou Auto Group (GAC) announced on October 12th that its board of directors has approved an investment of up to $1.49 billion in Didi’s autonomous driving company. This investment is made through GAC Capital and Guangzhou Development District Investment Group in the form of a special fund, with each contributing equally to its establishment.

GAC’s contribution to GAC Capital will not exceed $0.75 billion, and this capital injection will support Didi’s continuous research and development efforts in autonomous driving technology, accelerating product applications and fostering open collaboration within the industry.

Not the first GAC-DiDi collaboration

In May 2021, GAC Aion and Didi’s autonomous driving company announced their joint effort to develop a mass-market, self-driving electric vehicle. In May 2023, they deepened their collaboration with the “AIDI Project,” marking the establishment of a joint venture. This initiative is a groundbreaking move towards the large-scale production of self-driving, new-energy vehicles in China.

The first mass-produced model, based on GAC Aion’s AEP3.0 high-end electric vehicle platform, will integrate Didi’s autonomous driving L4 urban generalized engine, as well as its self-driving technology for ride-hailing services. By 2025, these vehicles are expected to join Didi’s shared mobility network, facilitating 24/7, large-scale autonomous ride-hailing services and speeding up the commercialization of L4 autonomous driving.

Apart from the investment in Didi’s autonomous driving company, GAC has made various moves in the autonomous driving field. In August this year, GAC’s ride-hailing app platform “Ruqi” submitted its prospectus to the Hong Kong Stock Exchange, making its mark as the first autonomous driving operation technology company to go public.

Next Stop for China’s Robotaxi

Robotaxi is a pivotal scenario likely to lead the commercialization of autonomous driving before widespread adoption. GAC’s “Ruqi” has been actively pushing forward the commercialization of Robotaxi and autonomous driving technology over the past two years.

Robotaxi started the development and commercialization in 2021. In October 2022, a hybrid operation combining human-driven ride-hailing and Robotaxi service was launched in Guangzhou. In April 2023, Ruqi obtained the Intelligent Connected Vehicle Demonstration Operation Qualification in Guangzhou’s Nansha District, becoming the first domestic autonomous driving service platform in China to demonstrate operations with a self-developed Robotaxi fleet.

The fundraising from the prospectus submission is intended to be used primarily for the research and development of autonomous driving and Robotaxi operational services (about 40% of the funds) and product upgrades and operational efficiency improvements of mobility services (about 20% of the funds).

Path to Commercializing Autonomous Taxis in China

With the impetus from new players like Tesla, car manufacturers typically follow two paths in autonomous driving development: self-research and collaboration with suppliers. In the new trend, the outreach of automotive suppliers is expanding, as seen in the strategic investments by SAIC Group, General Motors in Momenta, Toyota’s investment in, and GAC’s strategic investment in WeRide

Some high-ranking executives in the autonomous driving industry believe that four key elements are required for the technology’s success: a shared mobility network, autonomous driving technology, support from automotive manufacturers and Tier 1 suppliers, and substantial capital support.

Era of Auto-Driving Is Coming                        

UBS Group predicts that by 2030, the global market for autonomous ride-hailing services may exceed $2 trillion, with China being a major force. IHS Markit has also predicted that by 2030, the total market size for shared mobility in China will reach $2.25 trillion, with a compound annual growth rate ranging from 20% to 28%. In this scenario, Robotaxi is expected to account for 60% of the market, with a size of $1.3 trillion, signifying a shift in the future of the ride-hailing market toward autonomous vehicle services.

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