Daimler-backed Momenta says its robotaxis will be fully driverless and profitable in 2024 – ProWellTech

Daimler-backed Momenta says its robotaxis will be fully driverless and profitable in 2024 – ProWellTech

In China and the United States, there is much discussion about when and how humans will achieve fully autonomous robotaxis on a large scale: cars that drive passengers in complex road conditions without safety drivers behind the wheel.

A lot of pieces are needed to make this happen: huge amounts of test data, advanced algorithms, strong operational teams, great investor controls, local policy support, to name a handful. Until the arrival of that day, the bold claims of the players on the pitch seem mostly out of reach.

A recent commitment came from Momenta, one of Asia’s most valuable artificial intelligence startups and the first autonomous driving company in the country to achieve the $ 1 billion unicorn rating in 2018. The four-year startup, specializing in software solutions for autonomous vehicles (AV ), recently told ProWellTech that its entire fleet of robotaxis will operate without safety drivers in 2024, while some of its vehicles will already be driverless by 2022.

Competition in high-speed trains is intense. Alphabet’s Waymo told customers last October that its completely driverless cars “are coming”. Tesla plans to launch a robotaxi network in 2020. In China, Toyota-backed Pony.ai now offers an autonomous driving service with safety driver in two cities. Didi, the driving leader who leads the SoftBanks, has just started testing a robotaxi service in Shanghai.

An expensive pursuit

The autonomous taxis that we see now all over the world are mainly test programs running in designated areas. Most self-driving companies build their fleets from scratch. Business is a cash hemorrhage and marketing is still on the way, so the question is who can make it work before running out of money.

“Shopping [of building car fleets] it’s even unbearable for a multi-billion dollar company like Baidu, let alone startups like us. But it may be possible for Waymo’s size, ”said founder and CEO Cao Xudong, who appeared in a plain white T-shirt in a Zoom call with us.

The 34-year-old founder had previously helped launch the research division of the facial recognition giant SenseTime after a period at the renowned Microsoft Research Asia arm, which trained many of China’s best artificial intelligence brains and entrepreneurs.

Uber’s IPO prospect revealed that its self-driving unit was burning up to $ 20 million a month. Waymo’s valuation was reduced by 40% by Morgan Stanley last year citing concerns about the cash burn.

Cao said that his company can get full vehicle automation while maintaining manageable costs for a startup like the same. While Momenta has been unable to reveal whether he is actively raising funds, he said he has a “stable cash flow” that will last for at least another three years. The company had raised over $ 200 million by 2018.

Cao Xudong (far left) poses with municipal officials at an inaugural event for the Momenta robotaxi program in Suzhou. Source: Momenta

Before diving into Momenta’s expenses, it is important to note that none of her progress can take place without state support. In its transition from traditional production to a technology-driven economy, China has made large sums of government-led funds available for actors in strategic sectors such as 5G and artificial intelligence, which, of course, includes autonomous driving.

More recently, Beijing has moved to accelerate the development of so-called “new infrastructures” such as data centers and 5G networks to offset the economic impact of COVID-19. These are the basic structures needed for the AV, said Cao, and the political push will certainly give a strong boost to China’s autonomous driving sector.

The government is also removing regulatory barriers for promising AV operators. Just this month, Momenta obtained the first license to recruit passengers for its robotaxis that ran on selected public roads in Suzhou, a rich and historic city on the border with Shanghai which houses its extensive 4,000 square meter headquarters.

A sustainable path towards automation

Unlike many colleagues in its field, Momenta depends on partners to implement the technology and collect data rather than owning their own fleets. While forms of collaboration may vary on a case-by-case basis, its robotaxi service will largely be a joint effort with car manufacturers, which will likely provide vehicles and, above all, driver data; local governments, which can provide infrastructure such as 5G networks; and himself, who develops self-driving software.

“If you have a million cars, each costing a few hundred thousand RMB, this translates into hundreds of billions of RMB. It’s not cheap, “said Cao.

Right now Momenta is working to consolidate her alliance in Suzhou, where we drove one of her test drives last year. While startup aims to achieve complete automation in the end, it is not getting rid of all the security staff.

“We will take advantage of the 5G infrastructure and have remote security staff who will monitor, say, ten cars. This will lower the cost of security officers to a tenth of its current level, “said Cao.

When all of its vehicles remain driverless in 2024, the company will significantly reduce labor costs and achieve a positive operating margin per vehicle, the founder predicted. If things go as planned, it will also bring its light asset model to other cities outside Suzhou, entering a period of “enormous growth”.

“It’s kind of like the MacDonald franchise model. We will develop a set of operating standards and replicate them in other cities, where we will collaborate with the local government, taxi services, operating companies and so on, “said Cao.

Momenta also uses less expensive sensors, what the founder called “serial products” such as millimeter-wave radar and high-definition cameras compared to expensive LiDar sensors. Elon Musk would agree with his choice, stating that “anyone who relies on lidar is condemned”.

The startup acquires basic hardware components from international and national suppliers, counting NXP, Nvidia and Texas Instruments as its semiconductor partners. Cao declined to comment on the ramifications of the ongoing US-China trade tensions, but it’s not difficult to see how sanctions from DC could stifle the startup’s relationship with its suppliers.

Self-driving test of Momenta in a commercial district. Source: Momenta

The other cost reduction tactic is automation, which allows the company to minimize the number of engineers. There are, however, nuances in this seemingly simple principle.

“I have repeatedly told our research and development team that they are not hired as problem solvers but as architects. Because? Why level 4 [autonomous driving without human input] it involves long tail scenarios, “the founder explained enthusiastically.” You could face millions of problems. Sure, we can solve 100 problems with 100 people, but we can’t hire a million engineers to answer a million questions … So if you can build an automatic troubleshooting system, automation will take care of a lot of the work for we “.

Data control

To move forward in the AV race, competitors must accumulate a large amount of data to train the algorithms. Knowing that he does not have the financial ability to distribute thousands of robotaxis, Momenta has sold autonomous driving software to traditional OEM partners and Tier 1 customers, who not only provide him with data but also a steady stream of revenue.

Once the partner vehicles go out on the market, they start pouring the driving data and Momenta will insert them into the algorithmic training and periodically update the autonomous cars for consumers.

This configuration – getting a stack of low-cost data – seems ideal in theory, but it has a big red flag: the data, which is the lifeblood of any artificial intelligence company, belongs to car companies, not Momenta. Cao didn’t seem worried, arguing that partners have an incentive to deliver the data because Momenta can offer advanced technology absent in traditional automakers.

Momenta’s field of vision during autonomous driving. Source: Momenta

“When we are able to extract data from customers’ long tail problems to train our algorithms, their autonomous driving systems will be improved accordingly. We are essentially creating value for customers, “said Cao confidently.

Working with strangers also forces Momenta to juggle competing needs. His business is no longer just about throwing money into R&D. Having customers means that you need to consider what makes commercial sense to car manufacturers, from choosing sensors to software solutions.

“The automotive industry thinks very differently from that of the Internet. You can’t ask car manufacturers to adapt your way, “calculated Cao. As such, it has hired a considerable number of automotive veterans, including business development managers with years of experience in Mercedes Benz and Toyota.

Momenta has been reticent about his client list, although Cao made us realize last year that there weren’t many because AV partnerships require close, resource-intensive collaboration.

So far we know that Momenta is developing high definition maps for Toyota’s AVs. The startup also counts Daimler as a great investor, who kicked off his AV strategy in 2017, although he wouldn’t have revealed if the German auto giant was a customer. Daimler’s website offers a clue, listing Momenta in its portfolio managed by the “M&A Tech Invest” team, which is responsible for technology and startup acquisitions for the world’s leading premium automotive brand.

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