Embarrassing autopilot series: capital’s now divided

liu, tempo Date: 2021-07-15 10:40:11 From:ozmca.com
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At present, autonomous driving is in an awkward position: on the one hand, autonomous driving is a cutting-edge technology. Whoever takes the lead will gain social recognition for his innovation ability; on the other hand, because it cannot be implemented, the economic benefits brought by it are naturally limited. This article analyzes from the perspective of financing.

1. The hidden worries behind the boom

In recent years, the topic of autonomous driving has become more and more popular. Both new forces and traditional car companies are actively investing in and deploying autonomous driving. During the 2021 Shanghai Auto Show, Huawei, Xiaomi and major auto companies have successively developed autonomous driving. At present, the self-driving industry includes the sons of technology giants such as Baidu Apollo and Waymo, as well as self-driving startups such as Xiaoma Zhixing and AutoX, as well as century-old car companies.

Industry is the appearance, and capital is the driving force. In 2021, the autonomous driving industry will usher in a new round of financing boom. Companies such as Didi, Pony, Momenta, Wenyuan, Zhijia, Tucson Future, Yingche, Uisee, and Horizon have all received financing, and 9 companies within 5 months A total of US$3.4 billion was raised, and many participants began to launch new sprints in the capital market.

The financing of foreign companies is also good. Waymo has received two rounds of investment including Google’s parent company Alphabet and other investment institutions, raising a total of 4.75 billion US dollars. Cruise, a self-driving car company supported by General Motors, has also received attention from the capital market. In April, Cruise received additional investment from Wal-Mart and other companies in the latest round of financing, raising a total of US$2.75 billion.

The valuation of autonomous driving companies is also rising. The latest valuation of Pony.ai reached 5.3 billion US dollars. Wenyuan Zhixing raised RMB 2 billion in Series C financing, with a valuation of over RMB 20 billion. Didi Autonomous Driving has completed three rounds of financing of more than 1.1 billion U.S. dollars, and the latest valuation is about 6 billion U.S. dollars. Originally, with the official listing of Didi, the pressure on autonomous driving R&D investment will also be reduced accordingly, but the state is currently conducting research on it. The data security verification has brought variables to its autonomous driving.

Once, everyone thought that autonomous driving would have a huge future-even with a small income, the market value could be in the tens of billions of dollars; in 2017, the capital can be financed with a resume. By 2019, the industry will cool down, and in 2021, there is a wave of financing.

But behind this financing boom, there are hidden worries. Some financial investment institutions are quietly changing their attitudes towards autonomous driving. They are at the point of transition from full support to attitude differentiation. Investment institutions are becoming more and more rational, and the choice of capital market will become more critical. The thinking of driving gradually returns to the origin of technology, and the judgment of its commercial value is more calm and pragmatic.

There are many and complicated routes in the field of autonomous driving technology, and it is difficult to determine which technology will become the mainstream in the future, which also brings a lot of confusion to investors.

The actual situation is not optimistic. In the past five years, major institutions have invested a lot of money, but with little effect. Baidu’s self-driving vehicle, once highly anticipated, can hardly be a scene of colorful flowers. In March of this year, after Baidu announced the establishment of Jidu Auto, it chose to list in Hong Kong for a second time. Unfortunately, the stock price suffered a break on the first day.

On April 15, Tucson, a self-driving truck company, landed on Nasdaq in the future, but on the day of listing, it suffered a break. As of April 19, its total market value fell from approximately US$8.5 billion to US$7.414 billion.

The situation of foreign autopilot companies is also not very optimistic. The US investment bank Morgan Stanley once lowered its estimated valuation of Waymo from US$175 billion to US$105 billion. Another example is ATG, Uber’s autonomous driving division. Its revenue in 2019 was US$42 million, but its loss was US$500 million.

Because of this, Uber and Lyft are unable to continue to support the self-driving technology research and development funds that are difficult to fill, and choose to sell the self-driving business at a price far below the valuation. In the past five years, many companies have left the market for various reasons.

In the long run, autonomous driving is a blue ocean in a blue ocean, with a trillion-level application market, which will surely break many rules and boundaries of the traditional automotive industry and trigger the restructuring of the automotive value chain. This is undoubtedly a good thing for investors.

What’s more, there is the support of political support. The European Union plans to enter a fully autonomous driving society in 2030. Germany has passed a bill that will allow L4 highly autonomous vehicles to appear on public roads from 2022.

This is a technology that can completely change human beings. Everyone has very high expectations for autonomous driving, but it is not easy to land. It is destined to be a money-burning track, and there is no end in sight.

autonomous driving
2. A very money-burning track

As we all know, the research and development of autonomous driving requires long-term and large amounts of financial support, and even US$100 million to US$300 million in financing can’t do much. For self-driving companies, this industry is too money-consuming, and the improvement of technology requires sufficient funds and ammunition.

Some people say that autonomous driving requires investment like a bottomless pit of real money. There is some truth to this. The competition of autonomous driving is a marathon of financing.

The self-driving company Waymo has relied on blood transfusions from its parent company Google for a long period of time. As of 2015, Waymo has spent a total of US$1.1 billion on Google. It has burned money for 12 consecutive years, and it is as powerful as Google and overwhelmed. Google released its financing control over Waymo for the first time in 2019, allowing Waymo to seek external funds. Take Huawei as an example, the team in the field of autonomous driving invests about 1 billion U.S. dollars a year.

The technical requirements of autonomous driving with extremely low tolerance for trial and error, as well as the invisible R&D investment, may cause startups to get into trouble. Therefore, autonomous driving is not an easy place, a little carelessness or loss of everything.

Autonomous driving has always been a very money-burning track. At present, it has begun to focus on top players. The Matthew effect is more obvious, and it is easier for top companies to get capital. Capital is trying to intensify the reshuffle and stratification of the industry, and continue to widen the gap between the first-line and the second-line (team). However, for the industry to differentiate, continuous investment is required.

Autonomous driving is an entrepreneurial competition with expensive tickets. After a short period of financing, how to land to achieve self-blood formation is the fundamental way to solve the funding problem. However, the actual situation is that it has been in the R&D and testing stage, and there will be no real scale of user value before the real commercial operation.

To achieve relatively large results in any scenario of autonomous driving, it takes a long time to invest. For autonomous driving companies, the biggest challenge is to get the money to spend.

In the cycle, there are only two ways to withdraw the capital invested in the early stage: either the invested company IPOs, or the company accelerates mass production, creates a hot environment, and new investors come in to take over. The latter is far away, which is also the main reason why autonomous driving companies are anxious to go public.

Behind the listing is the consumption of funds for autonomous driving. Self-driving companies seek to go public, one is to obtain a higher market valuation. The secondary market can raise funds through fixed increase, issuance of shares, and issuance of bonds. In fact, there are more diversified financing options.

How to achieve industrialization breakthroughs or open up financing channels in the secondary market through IPOs before capital is in a hurry has become the direction for autonomous driving companies to focus their efforts.

3. Admission of industrial capital

Today in 2021, almost every powerful car company has decided to develop its own autonomous driving system. This is a long list. In addition to Tesla, it also includes most “car companies” such as Volkswagen, Toyota, Ford, GM, Xiaopeng, Ideal, Weilai, Baidu, and Xiaomi.

In January 2021, Weilai Automobile released the company’s first pure electric car Weilai ET7. According to the company’s CEO Li Bin, the hardware capabilities of this model will support L4 autonomous driving. After electrification, other OEMs will accelerate the integration of autonomous driving, such as Mercedes and Hyundai.

With the addition of industrial capital, there are not only established car companies, but also cross-border companies such as DJI’s innovation of drones, officially announced its entry into autonomous driving. The first official announcement is the delivery. Under the name of DJI, it will provide intelligent driving services-involving the research and development, production, and sales of intelligent driving systems and their core components divided by the role of the automotive field, that is, Tier supplier.

With the addition of industrial capital, the cost of autonomous driving hardware systems is being greatly reduced by economies of scale. In 2015, the price of a lidar was about 70,000 U.S. dollars, and the cost of an autonomous driving hardware system is usually calculated at 1 million yuan. In 2021, the price of a high-performance lidar is approaching $1,000, and the hardware cost of the entire autopilot system is being controlled at around 70,000 yuan.

Industrial capital not only ends up personally, but also increases investment in autonomous driving technology companies. In this round of financing, car companies have assumed a more important role. In the recent financing, Pony.ai received a strategic investment from FAW, the “son of the Republic”; Yutong Automobile, China’s largest bus company, invested US$200 million in Wenyuan; momenta.ai was blessed by SAIC, Toyota and Bosch; and Horizon was awarded by BYD and Great Wall Motors. , Changjiang Automotive Electronics, Dongfeng Assets, Sunny Optical, Xingyu Co., Ltd. and other automotive upstream and downstream companies; In Zhijia’s recent financing, the lead investors include Wanxiang Automotive Technology Venture Capital-Wanxiang Group is China’s largest automotive retailer One of the component suppliers; CATL announced that it will invest in the upstream and downstream with a cap of 19.1 billion yuan, and led the investment in truck autonomous driving in November 2020. Leading investors in the recent financing of Uisee Technology include the China Development Bank Manufacturing Transformation and Upgrade Fund .

Technological autonomous driving companies have also taken the initiative to develop close cooperation with upstream and downstream automotive companies. Technology companies such as Baidu Apollo, Wenyuan Zhixing, and AutoX have recently cooperated with OEMs to jointly develop or produce unmanned vehicles to reduce the cost of unmanned fleets. In May of this year, Didi Autonomous Driving reached a cooperation with car company GAC Aian.

Cooperation with the government is also underway. In March of this year, Mushroom Car Alliance and the Hengyang Municipal Government reached a strategic cooperation. The two sides launched in-depth cooperation in the fields of smart terminals, vehicle-road coordination, autonomous driving and smart transportation, and promoted the large-scale implementation and commercial operation of city-level autonomous driving. It is understood that the total investment of the project is about 500 million yuan.

In short, whether industrial capital is personally going off the market or taking the lead in investing in autonomous driving companies is good news in the industry. It not only makes up for the lack of venture capital, but also has rich scenarios and long-term plans.


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