Is it okay to get cold in 2022?

When capital tends to be rational, self-driving players have shed layers of gorgeous coats, and are ushering in the torture of their own physique in the cold;

Under the chill, autonomous driving players have successively adjusted their autonomous driving strategy, shifting their focus from Robotaxi to mass production ADAS;

In the face of the upcoming "mass production era" of high-end assisted driving, autonomous driving players still need to return to the essence of business and settle down with mass production.

The autonomous driving industry in 2022 can be described as "cold".

In the capital market, the performance of autonomous driving can be called "tragic". More than a dozen self-driving companies that have gone public worldwide have seen their stock prices fall by an average of more than 80% in 2022, with self-driving truck developer Embark, lidar technology companies Velodyne Lidar and QuanEnergy all falling by more than 95%.

When the cold wave hit, some autonomous driving companies that did not have sufficient hematopoietic capacity were listed at a discount, and some simply disappeared.

Lucky ones such as Mobileye, ringing the bell on the NASDAQ on October 26, 2022. Although the market capitalization is far less than the expected $50 billion in June 2022, and the listing "bleeds" at an issue price of $21 per share, with the commercial autonomous driving system Mobileye Drive, Mobileye rose more than 37% on the first day of listing, reaching a market value of $23 billion.

In contrast, Argo AI is not so good. The self-driving star startups that once relied on the two world auto giants, Ford in the United States and Volkswagen in Germany, have burned a lot of money but failed to implement substantial technology due to the slow progress of self-driving projects.

When faced with the popularity of L2+ and L3 systems, Ford and Volkswagen, which were unable to protect themselves, immediately chose to break their wrists and announced the closure of Argo AI on October 27, along with the cumulative financing of up to $2.6 billion.

A series of bearish news led hedge fund TCI to directly call on Google's parent company Alphabet to cut costs, especially in long-term investments such as its self-driving car company Waymo.

According to Sohu Auto's incomplete statistics, there will be 136 investment events related to autonomous driving in 2022, although the number is almost the same as 144 in 2021, but the financing scale will only exceed 20 billion yuan, nearly 80% from 93.2 billion yuan in 2021.

According to the statistics of Yiou data, a total of 230 financing events occurred in China's smart electric vehicle industry in 2022, with a total financing amount of 90.18 billion yuan, which is almost the same as the scale of autonomous driving financing in 2021.

When the capital market as a whole was cold, solutions/chips became the largest and most favored first-class track by capital, with a total of 42 investment and financing events. In contrast, the intelligent driving track received only 26 financings, and the intelligent network league road received 13 financings.

When capital tends to be rational and Buff blessings are no longer available, self-driving players shed layers of gorgeous coats and ushered in the torture of their own physique in the cold.

To stay alive, self-driving players must come up with something real in 2023.

01 "The chill reaches everyone"

Away from the grass on the plain, one year old and one withered. Organisms as simple as weeds flourish and wither, and corporations, a huge organism in the economic world, can hardly rise and fall independently of the environment.

In 2022, the global economy will slow down, and the cold winter will spread to the field of autonomous driving almost "as scheduled".

On August 22, 2022, Ren Zhengfei published an article entitled "The Company's Business Policy Should Shift from the Pursuit of Scale to the Pursuit of Profit and Cash Flow" at Huawei's internal forum, pointing out that the global economy will continue to decline in the next decade, and the survival base should be centered on cash flow and real profits. He even bluntly said, "Tell stories to deceive companies, and losses will be deducted from your food packets." ”

Although Ren Zhengfei intends to wake up Huawei and optimize its internal strategic approach, the universality of his views not only makes this article quickly out of the loop, but also accurately hits the bloodthirsty industry of the capital market represented by autonomous driving, so that it successfully "transmits the cold to everyone".

After all, "there's still a long way to go to build massively profitable fully autonomous vehicles." Ford Chief Financial Officer John Lawler said publicly.

Because the technological sophistication of autonomous driving above level 4 is not only difficult to predict in terms of technology implementation, its commercialization is only based on logical self-consistency, and lacks realistic basis.

On the other hand, Mobileye, which will be successfully listed in 2022, as a representative of the gradual development route, its significance can be described as far-reaching.

In April 2021, Mobileye announced the commercialization of the autonomous driving system Mobileye Drive, and in December of the same year, MobileyeEyeQ system-on-chip (SoC) shipments exceeded 100 million. On December 20, 2021, Mobileye announced a partnership with RATP Group, the world's third-largest public transport operator, and qualified for autonomous driving testing, to launch its first robotaxi service in Paris.

Although Mobileye's chip computing power still lags behind NVIDIA, and the black box solution (ADAS solution) provided by Mobileye has also been criticized, these cannot deny the substantial progress of Mobileye's business.

Compared with many "burning money" but not landing on the ground, Mobileye earned $879 million, $967 million in 2020 and $1.4 billion in revenue in 2021. In Mobileye's first earnings report since going public, Mobileye's third-quarter revenue was $450 million, up 38% year-over-year, although it is still in the red.

According to Yiou Automobile, in order to gain a competitive advantage in products, Mobileye is developing next-generation ADAS products, including new features of the SuperVision system and navigation assistance driving.

Under the chill, autonomous driving players who have frequently acted in the capital market in the past, such as Qingzhou Zhihang, WeRide Zhixing, Pony.ai, etc.ai, have also successively adjusted their autonomous driving strategies, shifting their focus from Robotaxi to the field of mass production ADAS.

02 "Desperate commercialization"

Looking at the present, the most frequently mentioned hot word in the autonomous driving ecosystem is probably "commercialization".

Xu Xianjie, founder and CEO of Sotorian, said bluntly: "This has set the main tone of the autonomous driving industry in 2022, everyone is desperately looking for business opportunities and landing scenarios, and this process is really eight immortals crossing the sea, each showing their talents." ”

In the view of Qiu Chun, CMO of Zhixing Technology, the basis for the maturity of market application is to achieve a commercial closed loop, but the autonomous driving industry above level 4 is far from forming a commercial closed loop, and some models are even taken for granted.

Currently, some self-driving companies choose to put solutions on their vehicles in an attempt to sell them to end customers. However, this kind of "smart car" may not have too many users pay, and many autonomous driving companies have to set up operating companies to prove that autonomous driving can reduce costs and increase efficiency through sales capacity.

"Unless you have logistics channels, it will be more difficult to just sell cars, which is in the logistics field. Autonomous driving at level 4 and above in passenger cars will be more difficult. Qiu Chun said bluntly.

In order to achieve the goal of commercialization, advanced assisted driving has begun to become a track for autonomous driving companies.

"Advanced assisted driving has become the focus of everyone in the autonomous driving industry." Huo Jing, vice president of ecological market & public relations of Qingzhou Smart Navigation, said firmly.

The autonomous driving industry is becoming more and more pragmatic and more commercial closed-loop, and everyone's goals are gradually focused, from the earliest L5 to L4, to the current more grounded L2+, promoting the gradual landing of functions such as high-speed NOA and urban NOA.

Based on the goal of high-end assisted driving, Qingzhouzhihang released the "dual engine" (power engine and innovation engine) strategy in May 2022, and cooperated with car companies to carry out front-loading and mass production of high-end assisted driving, broaden the width of the scene, and feed back the improvement of technology.

Huo Jing pointed out that the dual-engine strategy of Qingzhou Smart Navigation is intended to balance technology and business - on the one hand, to increase revenue capacity, on the other hand, through the large-scale landing of pre-installed mass production, so that the technology can be applied and verified in more scenarios, further consolidate the core technical capabilities of L4, and pave the way for the eventual realization of large-scale unmanned driving.

Like Qingzhou Zhihang, the autopilot player who opens his arms to high-level assistant driving, and Pony.ai, who once "unrequited" the pure unmanned route.

Dai Dunfeng, head of public relations for Pony.ai China, told Yiou Auto that at present, Pony.ai is simultaneously laying out three front-end business segments: autonomous driving service (Robotaxi), autonomous truck (Robotruck) and passenger car assisted driving business (POV).

As the demand for advanced assisted driving technology from end users increases, the market begins to explode, and POV business will become one of the core development drivers of Pony.ai in the future.

In fact, as players rush into the high-end assisted driving track, traditional automotive supplier giant Bosch also enters the new track with its keen sense of smell. In May 2022, Bosch and WeRide reached an in-depth cooperation to mass-produce L2/L3 high-end assisted driving products in 2023.

Xu Daquan, Executive Vice President of Bosch (China), told Yiou Auto that the market is the fundamental driving force for technological development. For the development of the market, a large-scale company like Bosch must make technical reserves and cannot miss key technologies.

It is foreseeable that in 2023, the high-end assisted driving track will become extremely hot under the gathering of various bulls, ghosts, snakes and gods. Although every self-driving company has had a dream of technology heroes, self-driving companies that do not want to be suppliers are not responsible entrepreneurs.

03 Technical decentralization, poison or antidote?

Although high-end assisted driving has become a definite development trend at this stage, Yiou Auto believes that autonomous driving is a long-term potential development technology, and it is difficult to make a profit in the short term.

First of all, for manufacturers, the basis for hematopoietic ability is to obtain profits, not revenue. As Xu Daquan said, although Bosch has obtained the L2/L3 high-end assisted driving project at this stage, it is impossible to earn back all the research and development costs through the project. Autonomous driving is Bosch's future-oriented investment, not a profitable pillar industry for Bosch today.

On the other hand, some autonomous driving companies regard high-end assisted driving as an important means to achieve commercial closed-loop, and the preliminary running through commercial logic is worthy of recognition, but if you want to achieve "hematopoiesis" and supply "whole body", it is still debatable.

Second, for start-up autonomous driving companies, decentralizing L4 and above technology to L2, although it can be reused technically, is really not cost-effective.

Qiu Chun pointed out that just like the mystery of La Mer, although it is very useful, but freshly graduated college students do not necessarily have to spend a lot of money, use it in every link to maintain, only need to match according to their skin type; Similarly, the large computing power platform of dual Orin does have good performance, but in L2 high-end assisted driving scenarios, it will also be a great challenge for startups in terms of cost.

Homogenization competition in the field of assisted driving is more intense. Zhang Gaonan, managing partner of China Imaging Capital, told Yiou Auto that in the field of assisted driving, the threshold for players, including the main engine car factory, is not high, and the current homogenization competition is relatively serious, and the gap cannot be opened, and the improvement of perception and decision-making technologies will gradually converge. From the perspective of commercialization, the cost of assisted driving realization will be lower and lower, and there will be hundreds of schools of thought in the future.

For example, Bosch chooses a company with massive road data and toolchain advantages and mature AI technology in the field of high-end assisted driving, which is a more cost-effective development model for quickly entering emerging fields while controlling costs to the greatest extent.

It must be admitted that the commercial mass production landing is the basis for the survival of autonomous driving, so no matter what form, autonomous driving companies must find their own scenarios to land, Zhang Gaonan said bluntly.

In the face of the upcoming "mass production era" of high-end assisted driving, the use of driverless technology to decentralize to high-end assisted driving may be an emergency strategy for enterprises to achieve positive cash flow in the short term. But to achieve long-term development, self-driving players need to return to the essence of business and speak with three accounting statements.

04 Conclusion

Technology, capital, talents, market, the development of an industry has never been driven by a single policy.

From technological breakthroughs to talent competition to the hot capital market, the autonomous driving industry has solved the bottleneck of development at different stages at different times, although this winter is still a little cold.

In the past 2022, Beijing, Shanghai, Shenzhen, Wuhan, Chongqing and other cities have successively introduced support policies related to autonomous driving, allowing relevant vehicles to test, demonstrate application, demonstration operation, commercial operation and other innovative application activities on some roads when no one is in the car.

Yiou Auto believes that with the maturity of technology and the recovery of the economic cycle, autonomous driving will also gain a new round of development. At that time, the industry will also correct the pain points in the development process, and let the truly valuable players stand out under the choice of historical experience and market environment.

Author丨Liu Huiying, Editor丨Hao Qiuhui, this article is produced by Yiou Automobile, please do not reprint without permission.