Author | Liang Changjun
Operations Editor | Wang Yiqing
WeRide, a competitor to Baidu Radish Run, which has recently sparked controversy, is about to go public.
Recently, the autonomous driving unicorn with a valuation of 37 billion yuan submitted a prospectus in the United States and plans to be listed on the NASDAQ.
With the boom of autonomous driving, WeRide has become the object of capital pursuit, but commercialization is still a problem. According to the prospectus, WeRide's total revenue in the past three years reached 1.068 billion yuan, and 150 million yuan in the first half of this year.
However, there is still no hope of profitability, with a total loss of 4.254 billion yuan in the past three years, and a loss of 882 million yuan in the first half of this year alone.
In the past few years, the company has relied almost entirely on external financing for its development, so autonomous driving is also seen as a cash-burning capital game. With the acceleration of technology iteration and the intensification of industry competition, listing has become a last resort.
The service business carries the banner of revenue
Robotaxi has not yet been commercialized on a large scale
WeRide was previously regarded as a star company in the autonomous driving track, and has directly aimed at L4 autonomous driving to carry out technology research and development and business development since its establishment.
However, with the difficulty of commercializing high-level autonomous driving and the acceleration of vehicle intelligence, WeRide has begun to explore L2 downward since 2022, forming L2-L4 autonomous driving solutions covering mobility, environmental sanitation, logistics and transportation, and other fields.
Based on the developed universal driving platform WeRide One, WeRide can use this expandable base to develop autonomous vehicles for different scenarios, thereby saving costs and improving R&D efficiency.
According to the prospectus, WeRide is the first company in the world to offer L4 paid Robotaxi services to the public, and the first company to launch driverless minibus services to the public on open roads.
At present, WeRide carries out autonomous driving testing and operation in 30 cities in seven countries around the world, including Beijing, Shanghai, Guangzhou, Shenzhen and other places, and is the only company that has autonomous driving licenses in China, United States, U.A.E. and Singapore.
WeRide says it has the world's largest fleet of public-facing paid robotaxis and has completed 1,700 days of safe commercial operation on open roads in China and the Middle East since November 2019. However, WeRide did not disclose the current size of the robotaxi fleet.
At present, WeRide is not able to rely on Robotaxi to achieve large-scale commercialization, and its revenue mainly comes from two aspects. The first is the sale of Level 4 autonomous driving hardware products, including self-driving taxis, autonomous minibuses, autonomous cargo vehicles, autonomous sanitation vehicles, and related sensor kits.
The second is to provide L4 autonomous driving and advanced driver assistance systems (ADAS) services, including autonomous driving operations, technical support services, and ADAS R&D services.
In the past few years, due to the economic environment and industry environment, WeRide has not grown steadily. From 2021 to 2023, the revenue will be 138 million yuan, 528 million yuan, and 402 million yuan respectively, and the revenue in the first half of this year will be 150 million yuan, a year-on-year decrease of 18%, while a year-on-year decrease of 24% last year.
This was mainly dragged down by the services business. In the first half of the year, service revenue decreased by 21 percent year-on-year due to a decrease in revenue from the company's customized R&D services to Bosch, as well as a decrease in operating and technical support services for robotaxis and vans, which impacted the overall performance.
At the same time, WeRide's revenue structure has also reversed, with service revenue increasing from RMB37 million in 2021 to RMB348 million last year, accounting for 86% of the total. Product revenue shrank, from 101 million yuan to 54 million yuan.
This shows that WeRide's autonomous driving products are not selling well. According to the prospectus, the company's sales of self-driving taxis fell from 11 to 3 last year, and sales of self-driving buses fell from 90 to 19.
WeRide said this is due to the overall economic environment, and the company's potential partners are prioritizing spending their budgets elsewhere. According to the CIC report, the purchase of new buses in China last year decreased by about a quarter compared with the previous year.
In addition, WeRide's service business has a good momentum of development. On the one hand, this is due to the rapid growth of its ADAS customized R&D services for Bosch, which is behind the continuous improvement of the level of automotive intelligence.
At the same time, WeRide's L4 autonomous driving service operation and technical support services have gradually entered the harvest period. Last year, the company's revenue from operating and technical support services for self-driving buses, taxis and robot vacuums increased by 52.6 million yuan, and the robotaxi mobility services provided through WeRide Go contributed a small amount of revenue.
WeRide said it plans to start commercial production of robotaxis this year and next year, and is ready for large-scale commercialization. As the L4 autonomous vehicle fleet continues to grow, it is expected that operating and technical support services revenue as a percentage of total revenue will continue to rise.
In the past three and a half years, the loss has exceeded 5 billion yuan
Since its establishment, it has raised 8 billion yuan
Although the overall revenue has increased, WeRide is still deeply in the red, and the loss is increasing.
From 2021 to the first half of this year, the company's net losses were 1.007 billion yuan, 1.298 billion yuan, 1.949 billion yuan, and 882 million yuan respectively, with a cumulative loss of more than 5.1 billion yuan in three and a half years. After deducting non-business factors such as the loss of preferred shares, WeRide's total loss during the aforementioned period still reached 1.6 billion yuan.
WeRide's continuous losses are not due to high operating costs, but its gross profit margin has turned positive and shown an increasing trend, increasing from 37.4% to 45.7% from 2021 to 2023.
Behind the high losses are WeRide's high-intensity business operating costs, such as R&D investment. From 2021 to 2023, the company's R&D expenses will be 443 million yuan, 759 million yuan, and 1.058 billion yuan respectively, accounting for 321%, 144%, and 285% of the corresponding annual revenue, respectively. In the first half of this year, R&D expenditure was 517 million yuan, accounting for 344%.
WeRide said that in the future, R&D investment will focus on testing, trials and commercialization of autonomous driving technology, expand the R&D team and invest more resources to improve technical capabilities, and R&D expenses will continue to increase to expand the business, adding that these investments may not translate into revenue growth in a timely or full manner.
According to the prospectus, 91% of WeRide's team of 2,227 employees are R&D personnel, including top AI scientists and autonomous driving engineers, and the majority of R&D investment is also used to pay the salaries of these R&D personnel.
"The autonomous driving industry is a promising market, and technology is a key factor in competition." WeRide emphasized that the company's business largely depends on its ability to maintain its technological leadership.
Therefore, in the future, WeRide still needs a lot of capital to promote the R&D and iteration of autonomous driving technology platforms, attract and retain top talents, and maintain and expand the fleet size to achieve scale, but also need to find a commercial balance between cost and cost.
Since its establishment in 2017, WeRide has quickly become an industry star with the pursuit of capital. The company has previously completed 10 rounds of financing, with investors including IDG Capital, Sinovation Ventures, China Growth Capital, Qiming Venture Partners, Cornerstone Capital, as well as SenseTime, GAC Group, NVIDIA, Bosch and other production and investment. After the last round of D+ round of financing, WeRide was valued at more than $5 billion.
It is worth mentioning that WeRide has a lot of connections with Baidu, and its predecessor, JingChi Technology, was founded by Wang Jin, the founder of Baidu's autonomous driving division, which subsequently triggered Baidu's commercial lawsuits. After Wang Jin was forced to quit, Han Xu, who served as Baidu's chief scientist for autonomous driving, became the founder and CEO, and now holds 7.6% of the shares and has 31% of the voting rights.
Now, the company, founded by former Baidu executives, has become one of Baidu Carrot Run's strongest rivals in China, and another star unicorn, Pony.ai, has also been rumored to be listed. With the slow progress of commercialization, these autonomous driving companies urgently need to go to market for blood transfusions.
WeRide is very optimistic about the future of autonomous driving. According to the prospectus, the global and Chinese mainland autonomous driving markets will be US$10 billion and US$2 billion respectively in 2022, and are expected to reach US$1.745 trillion and US$639 billion respectively in 2030.
Self-driving taxis and autonomous vans are the most important markets, with the global and Chinese mainland robotaxi markets reaching US$545 billion and US$201 billion, respectively, by 2030, while autonomous vans will reach US$784 billion and US$294 billion, respectively.
However, with the recent controversy caused by Carrot Run, these companies must also think about how to maintain a balance with the development of society and humanity in the process of technological development. Of course, it is also important to stay alive until we see the dawn of commercialization at scale.