Self-Driving Cars: Apple-Backed DiDi Gets a License



Apple-backed (AAPL) DiDi Chuxing has received a license to operate a fleet of self-driving cars on a pilot basis in part of the Jiading district in Shanghai, China. Besides DiDi, SAIC and BMW also received permits at the World Autonomous Vehicle Ecosystem Conference on September 16.

Apple invested about $1 billion in DiDi in 2016. The investment was expected to boost both companies’ efforts in product research and development in the auto industry.

Article continues below advertisement

DiDi gets a license for self-driving cars

The license will initially allow DiDi to run up to 50 self-driving cars, which can be scaled up after an incident-free first six months. However, a driver will be required to be present in the vehicle. The self-driving car will be able to transport goods as well as passengers. Volunteers from the public, who will also be insured, will be allowed to ride in these vehicles.

These licenses are a significant boost to the autonomous car industry in China. Shanghai aims to expedite the commercial launch of autonomous vehicles, and the issuance of the permits is a step in that direction. According to a McKinsey report, the autonomous vehicle market will account for 66% of total passenger kilometers in China by 2040. The major players in the market, including NIO (NIO), Baidu (BIDU), and SAIC, are already making huge strides.

Last year, Shanghai awarded a license to NIO to test its autonomous vehicles on the road. To learn more about NIO, read Could NIO Be a Better Buy than Tesla? Baidu, another industry player, has a fleet of 300 Level 4 self-driving vehicles, which have already traveled 2 million kilometers across 13 cities. The company has a T4 road test license.

Article continues below advertisement

Apple’s self-driving car segment

Apple’s investment in DiDi showed its interest in the burgeoning auto industry in the world’s biggest market, China. On the investment front, DiDi’s founder and CEO, Cheng Wei, said, “The endorsement from Apple is an enormous encouragement and inspiration for our four-year-old company. Didi will work hard with our drivers, riders and global partners, to make available to every citizen flexible and reliable mobility choices, and help cities solve transportation, environmental and employment challenges.”

Apple’s efforts at home also seem to be yielding results. Recently, its autonomous vehicle segment got a boost via the acquisition of Drive.ai, which ran a fleet of autonomous test vehicles. The acquisition magnified Apple’s research team and technology capabilities.

The company’s open secret, Project Titan, also seems to be progressing well after initial hiccups. Though Apple geared the project toward the development of an autonomous system for various products, it might have had a team working on research and development for a self-driving car segment. The company recently tested its sensor technology in its self-driving car.

Peers in the robotaxi segment

Like DiDi in China, Waymo (GOOGL) (GOOG), Tesla (TSLA), General Motors (GM), and Ford (F) are all set to launch their fleets of robotaxis in the US.

Waymo has already started pilot runs of its self-driving cars in two places: Phoenix and Silicon Valley. The company has completed over 10,000 trips, with the majority being highly rated. The company expects to launch as many as 20,000 I-Pace vehicles in Waymo’s fleet of robotaxis in the first two years of production.

With its Model 3, Tesla is all set to launch its robotaxi fleet by 2020. These will be high-performance self-driving cars with minimal operating costs and high mileage. Owners will also be able to place their vehicles in Tesla’s ride-sharing network.

Honda has also invested in GM Cruise, which is planning to launch its fleet of self-driving vehicles. Moreover, Ford will launch geofenced self-driving cars with Ford Smart Mobility by 2021. The company has invested heavily in the segment and expects to lead the autonomous vehicle industry.

Recently, Voyage, a small start-up that runs a ride-sharing service in retirement communities, raised funds. To learn more, read Robotaxis: Voyage versus Ford, Waymo, and Tesla.


More From Market Realist