Robin Li, the CEO of Chinese search giant Baidu, revealed in an interview last week that the company intends to eventually spin out its self-driving car project into a stand-alone business unit.
With this move, the company hopes to attract investors, engineers, and developers so it could meet its goal of bringing a fully autonomous car to market in 2018 and reaching mass production of vehicles by 2021.
It's likely the spin-off will mimic Waymo's separation from parent-company Alphabet. Waymo, introduced as a stand-alone company last year, partnered with Fiat-Chrysler to specially modify Chrysler vehicles with Waymo’s self-driving systems. Bloomberg reports these modified vehicles will be part of Waymo's autonomous ride-hailing fleet. While Li didn't elaborate on Baidu’s exact business model, it's likely the company's strategy will resemble Waymo’s.
There’s a large opportunity for autonomous ride-hailing in China, something Baidu might be trying to leverage. China has a number of cities, notably Beijing and Shanghai, that are concentrated with low- to middle-income individuals. These consumers may not be wealthy enough to own their own vehicles, and could consequently opt to rely on an autonomous ride-hailing service for mobility. A 2015 World Economic Forum study found that 75% of Chinese consumers said they were likely or very likely to be willing to ride in a self-driving car, meaning there could be a large market for an autonomous taxi service.
While Baidu brings significant resources to the table in this market, it's on a collision course with ride-hailing giant Didi Chuxing. As a massive search company, Baidu can leverage its background in AI, machine learning, and mapping, which are necessary components of self-driving vehicles. The company's name recognition could also help it to attract customers. On the other hand, it will be a challenge for Baidu to take on Didi Chuxing, which is one of the world’s largest ride-hailing companies that’s also aggressively developing self-driving cars for the Chinese market.
The self-driving car is no longer a futuristic fantasy. Consumers can already buy vehicles that, within a few years time, will get software updates enabling them to hit the road without the need for a driver.
This autonomous revolution will upend the automotive sector and disrupt huge swaths of the economy, while radically improving energy efficiency and changing the way people approach transport around the world.
Automakers and tech companies are racing to develop the technology that will power self-driving cars in the coming years. That tech is advancing, but leaves observers with a bigger question: will consumers trust driverless car tech, and will they want to use autonomous cars?
Peter Newman, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on self-driving cars that analyzes the market, and forecasts vehicle shipments and market penetration. It also profiles the players expected to take on a prominent role in the autonomous future, examines the barriers to autonomous car development and adoption, and reviews developments in technology, regulation, and consumer sentiment. Finally, it analyzes the impact the introduction of autonomy will have on various industries and transport trends.
Here are some of the key takeaways from the report:
- Self-driving cars are coming; there will be fully autonomous cars on the roads in the US in 2018, and adoption will just take off from there.
- The technology is developing swiftly to allow fully self-driving vehicles, while the regulatory environment is adapting to the anticipated changes that this new technology will bring.
- We conducted a survey asking our exclusive BI Insiders panel about their thoughts on self-driving cars, the future of the automotive industry, and the impact autonomous vehicles will have on their purchasing habits moving forward. The results provide a picture of consumer sentiment at the precipice of the autonomous era.
In full, the report:
- Sizes the current and future self-driving car market, forecasting shipments and projecting installed base.
- Explains the current state of technology, regulation, and consumer perception.
- Analyzes how the development of autonomous cars will impact employment and the economy.
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