Baidu, Inc. (NASDAQ:BIDU) Q3 2022 Earnings Call Transcript

He give examples about technical improvement €“ share about the operation help us to improve user experience. In operations, we got a lot of feedback from passengers. For example, passengers, one half, a operated customer to moderate, b, to citizen up faster and improve plan or rules can be formed . We then refined and improve or open for quality. Our efforts help us gain more recognition from passengers. Today, in Chongqing, Beijing, Apollo Go is already importantly for computing. After trying Apollo Go, people come to realize that it is a reliable and fixed service. It drove just like a professional driver. Some people may wonder why is Apollo Go 25% human drivers? This operation is always be in compliance with traffic regulation and our AI driver never get tired or distracted like human drivers, all of those allow Apollo Go provide worry-free to drive for the public.

While strong takeaway product 150 have helped us to us entrust, both from auditor and also from our regulators. We mentioned before, set in Wuhan and Chongqing. We will allow to provide fully driverless cadence service this August. The operation in both cities is well on track. Going forward, we plan to continue to expand this operation €“ and this operation — also and as more fully driverless vehicles. In 2023 and beyond, we will continue to skills our operation. In particular, fully driverless ride-hailing operation in more region and reduce hardware and vehicle cost. We believe while we are testing we will eventually be profitable and cheaper than the current ride-hailing service. We will continue to invest in robotaxi to capture a huge market opportunity.

Rong Luo: Hi, Kenneth, this is Julius. Regarding your question about the impact on our P&L and cash flow. We believe the overall impact is actually manageable. As Robin said in the script, actually, our team today has built a very comprehensive financial model for Apollo Go. This model actually helped us to understand what should we do, where we should improve and adjust to generate profit in these models in the future. For example, today, we are working very hard towards two goals. Number one is, we aim to remove safety officers in the cars, as labor cost is where we should reduce and make a kind of new ways. And number two, we continue to reduce the hardware costs. During the past quarters, we continued to improve our AI for autonomous driving technology and just now, both Zhenyu and Robin have given some examples of how we do that, how we leverage the large-scale operation to improve technology.

These efforts help us to earn trust and build track records. Today, we are providing fully driverless ride-hailing services in Wuhan and Chongqing, meaning no safety officers in the cars at all. In Beijing, we’re also making good progress as the safety officers today are now allowed to — not to see behind the steering wheel and maybe even the front seats, which will help us to remove the safety officers in more cities and reduce the labor costs in the future. And on the other hand, for the hardware perspective, most of the newly added car in the coming 12 months will be RT5, the model of Apollo Go. This means there will be some investments in hardware next year. Once a sizable amount of RT6 which has just launched a few months ago, pulling operation in the year 2024, our unit economy will significantly improve because RT6 has much lower production costs than any previous generations of robotaxis.