Baidu (BIDU) and self-driving startup Pony.ai can proceed and launch paid driverless robotaxi services in Beijing. According to a report published by Reuters, the two companies have secured the approval to deploy not more than 100 vehicles in the city. Shares of BIDU rose 0.60% to close at $151.39 on November 25.
Baidu is a Chinese Internet company that offers Internet-related services and online marketing solutions. It operates through the Baidu Core and iQIYI segments.
Baidu Driverless Taxi
The approval paves the way for Baidu’s first commercial deployment of the Apollo Global service on open roads. As part of the service, customers in the city will be able to hail one of the 67 cars available at more than 600 pick-ups and drop points. The driverless robotaxi service will be available at a fee similar to the level of premium ride-hailing services in the country.
In May, Baidu launched the driverless robotaxi service in a much smaller 2.7 kilometers area in Shougang Park, Beijing. Following the approval for commercial deployment, the company intends to launch the service in 65 cities by 2025 and 100 cities by 2030. (See Top Smart Score Stocks on TipRanks)
Baidu and Pony.ai approval comes on the heels of vehicle start-up AutoX, backed by Alibaba, also confirming the expansion of its robotaxi zone in Shenzhen. Expansion to 65 square miles or 168 square kilometers makes it the largest fully driverless robotaxi zone in the country.
This week, Susquehanna analyst Shyam Patil reiterated a Buy rating on Baidu and cut his price target to $175 from $200, implying 15.60% upside potential to current levels.
According to the analyst, the company is well-positioned to be a key player in the search and in the feeds market. He also expects the company to be a clear market leader in AI applications.
Consensus among analysts is a Strong Buy based on 13 Buys and 1 Hold. The average Baidu price target of $245.23 implies 61.99% upside potential to current levels