Xpeng Motors, a Chinese electric vehicle manufacturer (NYSE: XPEV), has been granted permission to introduce its self-driving technologies in Beijing. The move is made at a moment when the auto industry is struggling with massive losses, and some companies are reconsidering their investments.
Xpeng Motors, for example, has already rolled its self-driving technology out in Shenzhen Guangzhou and Shanghai.
CNBC's translation reveals that Xpeng is allowed to deploy self-driving on 'ring roads' and main high-speed routes'. It's not clear if Xpeng will be able to roll out its service on all roads in Beijing.
Xpeng Motors, a Chinese automaker, has made strides with self-driving technologies. It is the only Chinese manufacturer to offer a self-driving system that is similar to Tesla's.
Tesla, incidentally, does not have the permission to offer full self-driving in Chinese cities. In 2021, China prohibited Tesla cars in some government compounds due to'spying fears', as the cars are fitted with cameras that assist with self driving.
Musk's denial that Tesla cars can be used to spy on people did not go down well with China. Musk even opened a data center in China for the storage of all data collected within China.
Musk visited China recently after admitting that he had 'constraints on his ability to expand its operations in China'.
Xpeng Motors to Launch Self-Driving Vehicles in Beijing
Xpeng Motors' stock soared today in Hong Kong after news that it had been granted permission to launch self-driving cars in Beijing.
Beijing is the first city to adopt ADAS.
City NGP* has been launched in four of the largest cities across the country. It will be expanded to other cities later this year. URL #TechnologyForAll #AutunomousDriving pic.twitter.com/YZ2Ltae7ur
-- XPENG (URL) June 15, 2023
It's an important step for the company but there are some things to keep in mind. A report by Automotive News states that investors have invested $160 billion in self-driving firms over the past 12 years.
Cruise, backed by General Motors lost $500 million during Q2 2022, and $900 in the first half 2022. Last year, its accumulated losses exceeded $5 billion while daily losses were around $5 million.
But so far, none of these companies have been able come up with Level 4 fully autonomous cars.
Ford, for example, has written off its entire investment into Argo AI's autonomous driving startup in October of last year. Argo AI eventually closed its doors.
- GM delays EV launch to '24
Tesla's EV 'competition' is in disarray $TSLA
-- Dillon Loomis (URL) December 7, 2022
The company announced it would also not be focusing on L4 autonomous systems. Jim Farley, Ford's CEO, said that despite companies spending a total of $100 billion on level 4 autonomous cars, none have been able define a business model.
Ford Has Given Up on L4 Self-Driving
Ford's CFO John Lawler stated that Ford believes it does not have to develop fully autonomous technology by itself.
Partnerships in the area of self-driving cars could be a way for automakers to move forward. Tesla, for example, has partnered up with Ford and General Motors in order to share 12,000 Superchargers.
Tesla's CEO has also expressed an interest in sharing its self-driving technology with other automakers. The penetration of L4 self-driving cars is predicted to reach 1% by 2026, and 5% by 2030.
Even Tesla's FSD, which is a fully autonomous car but still in development, is still a long way from becoming fully autonomous.
FSDs have always been controversial, even its name is a source of controversy for US regulators.
After multiple crashes that involved the software, the US National Highway Traffic Safety Administration has also launched a separate investigation into Tesla Autopilot. California Department of Motor Vehicles also accused Elon Musk's company of deceptive marketing practices.
Dawn Project has released a 30-second ad this year criticizing Tesla's 'deceptive' marketing.
Xpeng Motors has Massive Losses
Xpeng Motors is another EV startup that struggles with cash burn and losses.
Gross margins for the company plummeted from 12.2% to just 1.7% during the first quarter 2023.
The company's net losses grew to $327 million, despite revenues of $571.66 million.
The company does provide separate results for its autonomous vehicle segment. Tesla increased the FSD prices by 50% last year to $15,000 and Musk believes the price will eventually reach $100,000.
Cathie Wood is bullish about the self-driving car business of Tesla, too. She believes that Tesla's stock will rise to $2,000 in 2026.
As for Xpeng Motors the markets will wait until it meets the delivery forecasts. It has disappointed the markets in the past two quarters with its financial performance and delivery.