Will you please welcome on stage the global head of automotive research for Bloomberg Intelligence, Michael Dean, and the CEO of Pony.ai, it's James Peng.
Where are you at? You are here. You okay there, James?
Well, James, nice to see you again. Yeah, it's been 12 months. So, a lot's happened in that 12 months. Also, it's great timing because Bloomberg Intelligence has just launched its global robotaxis reports. And really, you know, one of the key questions from investors now is how do robotaxis scale in a profitable way? So, I'm just wondering, can you set the scene for us? Where is Pony.ai in terms of robotaxis on the road, cities that you're actually operational in, and how has that changed over the past 12 months?
Sure. So, currently, actually last year, let me dial back the time a bit. We actually launched our generation 7 autonomous driving vehicles collaborating with Beijing Auto, Guangzhou Auto, and Toyota. So, we have three exact the same version with the same autonomous driving kit. So, we have already launched fully driverless commercial usage in four tier one cities in China, in Beijing, Guangzhou, Shenzhen, and Shanghai. So, those are fully driverless. Those are with paid customers, and they we do 24/7 services. And the current fleet size is approaching 2,000. So, the experience of the fully driverless robotaxi is exactly like a ride-hailing or taxi services. Similarly, we also launched global trials and the commercial usages in Singapore, in Middle East, in Dubai, in Doha, in Seoul, South Korea. And of course, in Europe as well. Last year, I think in the I This is a third Move conference consecutively for me. And the last two times we I talked about our trial in Luxembourg. And I was 2 days ago I was in Luxembourg and we actually have the service running from last year. We also launched our commercial the first European commercial robotaxi services, although still with a safety driver for the time being because of the regulation in Zagreb, Croatia. I was there 5 days ago. And the service actually running through the downtown area of the Zagreb and also the south of the river with the new development. And from the airport and all that. So we definitely have seen that the robotaxi is there and it's enjoyed by many customers.
Yeah, so unlike our previous speakers, you actually have paying customers. How do you scale that 2,000 up to say I think your medium to long-term objective is 50,000. What are the bottlenecks in stopping you from getting to that 50,000?
Well, I mean robotaxi is such a complex systems, all right? Technology is just one thing, right? We I think over the last 10 years we really get the technology right. We have close to 100 million kilometers of autonomous driving running on the road with impeccable safety track record. So that proves that the technology itself is right. And then on the cost side, we really really really I think this is probably where the best in the world is to optimize on the cost side. The total cost of the vehicle, the bomb cost, of course there's tariff and everything on top of it. But the raw material cost for the car and everything on top is 35,000 USD. So that kind of cost we get cost right. And operation we operate a fleet of 2,000 vehicles. Of course, we talk about 50,000. That's different from 2,000. But we gain the experience and everything. I think the biggest hurdle probably now is on the regulation side. That's part of the reason and I'm having the European trip, have the Middle Eastern trip to talk to the regulators to prove that it's our safe. And once the regulations there, I think the scalability path will be exponential.
So do you actually have commercial full service production of your vehicles, say with Toyota in China? Is that where you're at at this stage?
Yes, but it's a partial series production. Meaning we are as assembly line, but we are not fully integrated yet. Actually, majority of the integrate the modification of the vehicle is done on the assembly line, but we have we added a small line at the tail end of the assembly line of the vehicles to put some more sensors on the top. So it is series production. I think for our next version coming mid next year, it will be fully integrated with the assembly line.
Okay, so would that be the Gen 8 version of your technology? So you had massive improvements in terms of costs with Gen 7. Can you talk about the jump from Gen 7 to Gen 8 in terms of costs and maybe technology as well?
I think just from the cost itself, we are looking for another 20 to 30% reduction. But I think what's more important is a fully integrated with the assembly line. That means our production capacity will be massively bigger than the previous version. That means production will no longer be a limiting factor.
Okay, and can you maybe talk about the Middle East? So, that's a big growth area. I assume the crisis has had an impact on that growth. Can you just talk about maybe the main cities you're focusing on? And is are you focusing there because of the regulation, or is this a real commercial opportunity for you?
Both reasons. I think they're both regulation and their potential market size play the important role in our decision-making. Currently, our focus is in Dubai and Doha, but certainly we'll expand into other cities in that region. Because the regulation is actually progressing really fast in that region. And the demand it's a tourist attraction, so there's actually a lot of demand for shared mobility.
And you know, one of the key battlegrounds for robotaxis is the US. You still have testing there. Where does the US sit in terms of your sort of long-term objectives?
I think to minimize the potential geopolitical risk, we kept our operation in the US as testing and R&D for now, and we'll see how it goes.
Okay, so there's still a potential opportunity there at some point.
And in terms of your customers, I mean, you've got 2,000 robotaxis, you've got many signed up in China. You're now on WeChat, which means gives you huge exposure. How do you weigh up having customer wait times and fulfilling customer expectations with such a small fleet?
No, that's a very important question is that for shared mobility, wait time is because it's directly related with the user experience. That's why currently we try to keep the density relatively high. In order to do so, we sacrifice the coverage, meaning that in the city for give Shenzhen as example, we are more focusing on the most populous and high commercial value districts in the Nanshan and Bao'an districts. So, we're not covering the whole city yet. Precisely because we want a good density and in turn reducing the wait time. Actually, our average wait time in Shenzhen is already off-peak time probably 5 minutes, peak season peak peak time rush hours 10 minutes. So, we were already giving getting like 20 to 25 rides per vehicle per day. So, that gives you a sense of how high utilized our vehicles are.
And then also in terms of the customer experience, I was using a Waymo taxi in Miami a couple of weeks ago. It was fantastic. It was very bold in its decision-making. You know, the technology clearly works, but when it went to drop me off, it couldn't really find a suitable stopping place. So, I ended up 200 m down the road from where I wanted to go. Is this an experience that you're having with your customers and how do you get over that?
Actually, we don't have a much of problem with dropping off because I think that we have we can randomly drop off is easy. It's a pick up that's actually challenging and that's one thing I think autonomous driving probably will improve, but can never be on par with a human driver is that I mean, typically when our vehicles arrived, the passengers are not there yet and at many places we can't wait for too long. So, of course we have a lot of system to improve to remind the riders to come right away, but in generally pick up we ask the riders to walk a little bit to the place where we actually can stop for 5 minutes.
Okay. So, can you just talk a bit more about your expansion into Europe? So, you originally started in Luxembourg. You now have a testing facility in Croatia. What are your plans for Europe? And how quickly can you scale up here?
No, I think the European market first and foremost, I think is a very interesting market. It's a market with more than 500 million people and economically very booming. But the I think the deciding factor at least there are two factors. One is regulation, right? I think over the last year there's a EU testbed regulations. There's certainly compared with last trips, this year definitely I see there's more discussions and many more cities has a waiting list to have the autonomous driving trials. But regulation still remains to be a uncertainty. And the second is partnership. We're definitely not going to come to Europe alone by ourselves. We have we'll heavily rely on our partners for ground support, for user acquisition, for the government relationships. So, I mean, could be many more cities coming, but definitely the gauging factor are those two.
Yeah, you've mentioned partnerships are important. You've chosen Stellantis in Europe. We've just had them speaking earlier. Can you talk about you know, why Stellantis? Why are they perfect partner for you in this region?
