Baidu, Inc. (BIDU - Free Report) has taken another big step in the autonomous driving space.
The ever-growing Chinese internet company revealed that its Apollo Robotaxi fleet of 45 self-driving cars has been released in Changsha, Hunan province in China, to start trial operations in urban road environments.
These taxis will offer passenger rides in a pilot zone, covering a total area of 70 kilometers and 135 kilometers in open roads. The trial operation is expected to cover around 50 kilometers by the end of 2019 and 135 kilometers within first-half 2020.
Deployed with L4 Hongqi EV vehicles, these Apollo Robotaxis can perform important functions that include assessing traffic conditions, changing lanes when required and employing automatic avoidance to encounter aggressive overtaking by other vehicles. Also, a human operator is assigned to each robotaxi, keeping in mind the safety of passengers.
The latest deal is inline with the company’s strategy of accelerating the use of smart vehicles in China and shaping the future of smart mobility globally.
Baidu, Inc. Price and Consensus
Baidu's Continuous Efforts in This Space
In the past few years, Baidu has made considerable progress in the self-driving space. Its major self-driving project called Apollo focuses on utilizing the Chinese tech heavyweight’s strengths in artificial intelligence to build a collaborative driverless car ecosystem.
Baidu revealed that its fleet of autonomous vehicles covered a distance of 2 million kilometers in urban road environments. In addition, the company has taken 438 new autonomous driving patents, thereby expanding its share in the self-driving space.
Moreover, Baidu has received permission for five autonomous driving tests from the Beijing Municipal Commission of Transport, which is a big milestone for the company. This gives Baidu the permission to test vehicles in real-time traffic conditions.
These developments are likely to aid the company in rapidly penetrating the self-driving market, wherein safety and the prevention of accidents are most important.
Autonomous vehicles are set to revolutionize the concept of transport, while contributing significantly to the global economy. Per a McKinsey research, autonomous vehicles are expected to contribute to 66% of the passenger-kilometers traveled in 2040, while generating $1.1 trillion in mobility services revenues and $0.9 trillion in sales.
We believe growing autonomous driving initiatives are likely to aid Baidu to penetrate into the global self-driving market.
Per Grand View Research, this market is projected to witness a CAGR of 63.1% between 2021 and 2030. Further, per Zion Market Research, the market is expected to witness a CAGR of 25.7% between 2018 and 2024, and hit $26.58 billion by 2024.
The company’s strong endeavors toward enhancing the self-driving service with commercial autonomous driving cars and taxis will continue to drive growth.
Zacks Rank & Stocks to Consider
Currently, Baidu has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Alphabet Inc. (GOOGL - Free Report) , Itron, Inc. (ITRI - Free Report) and MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Alphabet, Itron and MACOM Technology is currently projected at 17.5%, 25% and 15%, respectively.
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