Commercialization Attempts to Continue Based on Technological Symbolism and Winner-Take-All Characteristics
Technology Development Delays, Funding Shortage, and Social Acceptance Issues Remain

While the robotaxi industry landscape is shifting due to technology development delays and deteriorating financial conditions, a report has been published indicating that the fundamental momentum of the industry is likely to be maintained.

Jeon Hyun-ju, a senior researcher at the Korea Automotive Research Institute (KARI) Industrial Analysis Division, published an industry analysis report on the 28th with the theme of "Current Status and Major Challenges of Robotaxi."

The report states that robotaxi, which has the potential to lead social change as a transportation service, is experiencing changes in the industry landscape due to delays in autonomous driving technology development and funding issues, but the fundamental momentum of the industry will be maintained.

According to technological symbolism and winner-take-all characteristics, robotaxi companies' research and development and commercialization attempts are expected to continue.

Based on network effects where additional costs decrease and value increases as users grow, competition among major companies to capture market share and become a handful of suppliers that maximize market share is expected to continue.

Complete vehicle manufacturers can expand into autonomous driving-based service businesses, and big tech companies and ride-sharing firms have advantages in business diversification, such as monetizing autonomous driving systems themselves, which has garnered interest from many companies.

The United States and China have implemented robotaxi operating permit systems where safety personnel are not required to be onboard by establishing regulations. Notably, Waymo and Cruise have obtained operating permits in California, and Baidu has obtained permits in Wuhan, Chongqing, and Beijing.

Major companies are attempting to respond to unverified operating revenues through platformization of robotaxi vehicles and supply chain efficiency improvements.

According to the report, Baidu has reduced the cost of Apollo from 960,000 yuan (estimated 4th generation price) to 250,000 yuan (estimated 6th generation price), and Cruise produces Origin as an electric vehicle-exclusive platform.

Robotaxi, which seemed destined for rapid growth, is experiencing rapid industry landscape changes due to delays in autonomous driving technology development and deteriorating financial conditions, which are essential preconditions.

While significant investments have been made in autonomous driving technology development and robotaxi demonstration projects, progress has been slower than initially expected due to technology complexity, safety concerns, and high costs associated with individual system configurations.

In December 2020, Uber sold its autonomous driving division to Aurora, and Ford and Volkswagen liquidated autonomous driving startup Argo AI in October last year, showing signs of industry contraction.

BCG Consulting forecasts that approximately 59 trillion won in research and development costs will be necessary to realize fully autonomous driving by 2035, indicating that astronomical budgets will need to be invested going forward.

Ride-sharing companies are focusing on Level 2 and 3 technologies or engaging in M&A and joint venture establishments with various purposes with complete vehicle manufacturers and big tech companies to reduce development risks due to delays in Level 4 and above technology commercialization.

Amazon and Woven Planet (Toyota subsidiary) acquired Zoox (2020.6) and Lyft (2021.5), respectively, and Hyundai Motor established a joint venture Motional with software solutions company Aptiv (2020.3) and acquired autonomous driving startup 42dot (2022.8).

The report also states that commercialization of robotaxi services requires advancement of autonomous driving technology, cost realization, and clear presentation of consumer and social value.

Errors can occur in the recognition, judgment, and control processes of autonomous driving systems in response to various road conditions, and it is difficult to determine responsibility in case of accidents involving the system, manufacturer, and communication.

In reality, autonomous driving is showing instability, with two injuries resulting from a Cruise robotaxi accident in San Francisco in June last year.

Growing consumer distrust in autonomous driving remains an important issue that needs to be addressed.

According to a survey by the American Automobile Association, consumer distrust of autonomous vehicles has increased from 55% in 2022 to 68% in 2023 due to consumers confusing the meaning of ADAS and autonomous driving.

Senior Researcher Jeon stated at the end of the report that it is necessary to provide opportunities for education and experience to improve consumer understanding and secure social support for robotaxi development.