AV Market Update CW 12
How Japan solves its driver crisis with autonomous vehicles, while WeRide & Pony.ai seek further capital for global expansions, Waymo expands to Silicon Valley
👋 Hello!
Today is March 17, 2025, and as CW12 kicks off, we're witnessing global momentum in autonomous vehicle deployment. From Japan's government-backed initiatives to address critical driver shortages, to WeRide's aggressive expansion across three continents, to Waymo's growing Silicon Valley footprint – this week demonstrates how autonomous driving is transitioning from isolated experiments to coordinated commercial strategies across diverse markets.
Let's dive into the developments reshaping the autonomous driving landscape across Asia, Europe, and North America.
Today's newsletter has 2,600 words and takes about 13 minutes to read.
🇯🇵 Japan's Move to Address Driver Shortages with Autonomous Technology
Japan is accelerating autonomous driving technology adoption to tackle its severe driver shortage. Two major announcements this week highlight this strategic push:
Plus (AI-based autonomous trucking) and TIER IV (open-source autonomous driving software) are partnering to deploy Level 4 autonomous trucks on Japanese expressways. This addresses Japan's projected 36% truck driver shortfall by 2030 (Nomura Research Institute) – with Bank of America estimating an 34% shortfall in trucking capacity.
Source: BofA Global Research: Trucking Crisis: Driver Shortage to Prompt Industry Reforms Report, January 25, 2024
The shortage is exacerbated by Japan's aging workforce and new labor laws from April 2024 limiting driver overtime. While these regulations improve driver well-being, they've already reduced available trucking capacity, placing immense pressure on Japan's logistics networks.
Source: BofA Global Research: Trucking Crisis: Driver Shortage to Prompt Industry Reforms Report, January 25, 2024
These challenges unfold against a demographic crisis: Japan recorded just 720,988 births in 2024 (lowest since records began in 1899), while deaths reached 1.62 million. Nearly one-third of Japan's population is now over 65. Given these stark realities, innovative solutions like autonomous vehicles have become essential rather than optional.
Source: Chartr
The Plus-TIER IV collaboration combines Plus's end-to-end virtual driver AI model (already powering L4 trucks globally) with TIER IV's Autoware platform. Initial trials will run on the Shin-Tomei Expressway. This positions Plus as the first American autonomous trucking company with operations spanning the U.S., Europe, and Japan.
Simultaneously, Nissan demonstrated its autonomous technology in Yokohama's Minato Mirai area – Japan's first driverless test on public roads in a complex urban environment. The company's test vehicles, based on the Serena minivan, incorporate 14 cameras, nine radars, and six LiDAR sensors.
Source: Nissan
However, Nissan's system remains at Level 2 with remote monitoring – behind Mercedes-Benz's L3 systems and Waymo's L4 capabilities. This gap is significant as Waymo will enter Japan through a partnership with taxi operator Nihon Kotsu, potentially deploying true driverless services faster.
A key challenge for Nissan and all AV companies in Japan is the "perfection paradox" – in a culture expecting flawless execution, a single incident could severely damage public trust. Nissan plans service demonstration tests with 20 vehicles in Yokohama (2025-2026), aiming for commercial launch by fiscal 2027.
Both initiatives enjoy strong government support, with METI leveraging its history of backing emerging technologies. One strategic advantage Nissan may leverage is its close alignment with Japanese regulatory authorities. This regulatory partnership could provide advantages over foreign entrants like Waymo, at least in the early stages of market development.
However, the true challenge for Nissan lies in bridging the technological gap between its current L2 systems and the L4 autonomy required for meaningful impact—a transition that requires not just technological advancement but regulatory breakthroughs, public trust building, and development of a scalable business model.
🔗 Nissan / Forbes / Sherwood / LinkedIN
🚗 WeRide's & Pony.ai’s Expansion plans
WeRide is executing an aggressive global expansion with developments across three continents this week, while reportedly seeking additional capital to fund its ambitious growth plans.
In Barcelona, WeRide launched its Robobus pilot service in partnership with Renault Group – Spain's first publicly accessible trial of a factory-installed, mass-produced autonomous vehicle on open roads. Authorized by Barcelona's City Council and Spain's Directorate General of Traffic, the service operates daily (11:00 AM-5:00 PM) on a two-kilometer route with four stops past landmarks like Casa Batlló and La Pedrera.
This European push builds on WeRide's methodical expansion over the past eight months, including deployments at Zurich Airport, the 2024 French Open, and an upcoming project with Swiss Federal Railways. Two weeks ago, the company announced its first European commercial deployment in France's Drôme region, partnering with beti, Renault Group, and Macif to operate L4 autonomous shuttles at the Rovaltain business park near Valence TGV station.
Simultaneously in Asia, WeRide and competitor Pony.ai (both Nasdaq-listed) announced their robotaxi fleets have been approved to offer paid autonomous ride-hailing services between Beijing Economic-Technological Development Area and Beijing South Railway Station. This marks a significant commercialization milestone in the Chinese capital.
Sources familiar with the matter told Nikkei Asia that WeRide submitted a formal application for a secondary listing on the Hong Kong Stock Exchange before the Lunar New Year, while Pony.ai is accelerating discussions with investment banks about a similar move. Both companies went public in the U.S. late last year despite geopolitical tensions.
The potential secondary listings come amid a strong rebound in Hong Kong's tech stock market, with the Hang Seng Tech Index surging over 30% year-to-date. Chinese EV makers NIO, Li Auto, and XPeng have all completed secondary listings in Hong Kong, establishing a precedent for mainland tech companies seeking additional capital access.
A major driver for these rumored listings is the substantial capital required for fleet expansion. Pony.ai operates over 300 robotaxis and 190 robotrucks but aims to expand to 1,000 vehicles this year and 10,000 within the next three years, according to CEO James Peng.
The Guangzhou-based company is partnering with major automakers to ramp up robotaxi production and expand its fleet size. “We started our partnership with Beijing Automotive Group, Guangzhou Automobile Group up and Toyota Motor last year, and will have three models to be launched for the mass market this year,” Peng said.
Production cost considerations are critical for this expansion. Baidu's sixth-generation autonomous vehicle reportedly costs under $30,000, while Pony.ai's current vehicles cost approximately 500,000 yuan ($69,000), with next-generation models expected to drop below 270,000 yuan ($40,000).
Pony AI expects that the robotaxis will break even on a per-unit basis sometime between 2025 and 2026. Comparing this statement with the expansion plans this should reflect a fleet size of around 1,000 vehicles. How fast Pony.ai turns profitable depends on how fast they can scale their robotaxis, Peng mentioned the company could be in the black before 2029, looking at the current environment.
WeRide has pursued a differentiated strategy, focusing more on robobuses than robotaxis compared to competitors. This multi-vehicle approach offers diverse revenue streams but requires significant capital deployment across several technologies and operational models.
In Southeast Asia, WeRide is also expanding through a new MOU with Grab in Singapore alongside three other autonomous technology companies. This partnership will evaluate AVs' impact on safety, workforce development, and cost structure in Southeast Asian markets. For Grab, this continues its autonomous vehicle exploration following earlier partnerships with nuTonomy for driverless taxis and NCS for robot food delivery.
WeRide's global expansion occurs amid increasing geopolitical challenges, with the U.S. tightening restrictions on Chinese autonomous technology. Europe and Southeast Asia represent critical alternative markets, though each presents distinct challenges. In Europe, WeRide must navigate strict privacy laws, data localization requirements, and cybersecurity concerns
WeRide's multi-pronged strategy – European public transit deployments, Chinese robotaxi operations, and Southeast Asian market exploration – demonstrates a sophisticated global approach addressing diverse market needs. By emphasizing real-world deployments across multiple vehicle types and use cases, WeRide generates valuable operational data while establishing credibility with regulators and investors.
Japan's national strategy and WeRide's global expansion represent complementary approaches to advancing autonomous vehicle technology.
Japan's initiatives address a specific demographic crisis through coordinated government action. The strong regulatory framework and cross-ministerial coordination create a favorable environment for technology deployment, ensuring alignment between innovation and societal needs.
Conversely, WeRide exemplifies how a technology provider can expand globally by adapting to diverse regional contexts. Through partnerships with Renault in Europe and Grab in Southeast Asia, WeRide accesses different markets while tailoring its technology to varied use cases, enabling faster international expansion without requiring unified regulatory frameworks.
Both approaches highlight the necessity of strategic partnerships. Japan brings together international technology (Plus) with domestic expertise (TIER IV and Nissan), while WeRide collaborates with established regional players. These partnerships combine complementary capabilities – technology, market access, regulatory understanding, and operational expertise – essential for overcoming autonomous vehicle deployment challenges.
For industry stakeholders, these developments emphasize the necessity of "thinking globally while acting locally." Technology providers must develop flexible solutions adaptable to different regulatory environments. Automotive manufacturers must integrate autonomous technology into global product strategies. Regulators must balance safety with the need to enable innovation addressing local challenges.
🔗 WSJ / Gasgoo / The Business Times / Nikkei Asia / LinkedIN
💡 Quick Takes:
🔄 Kodiak Robotics in SPAC Talks with Ares Acquisition Corp. II
Autonomous trucking startup Kodiak Robotics is in advanced talks to merge with Ares Acquisition Corp. II in a transaction potentially valuing the combined entity at about $2 billion. This follows Kodiak's January announcement of selling completely driverless trucks to Atlas Energy Solutions for fracking sand transport in the Permian Basin, and its previous contract with the US Department of Defense to help automate Army ground vehicles.
🔗 Bloomberg
🚕 Waymo Expands Silicon Valley Footprint
Waymo is expanding its robotaxi service to Mountain View, Los Altos, Palo Alto, and parts of Sunnyvale starting Wednesday, adding 27 square miles to its Silicon Valley operations (now totaling 82 square miles in the Bay Area) with 24/7 availability. This expansion accompanies Waymo's ambitious growth plans powered by a recent $5.6 billion funding round that valued the company at $45 billion.
🔗 TechCrunch / LinkedIN
📱 Tesla Faces Brand Crisis as Politics and Robotaxi Plans Collide
Tesla's stock recently suffered its worst single-session loss since September 2020, falling more than 15%, with sentiment toward Elon Musk's political activities negatively impacting the brand. Industry surveys show Tesla consideration among potential buyers has dropped precipitously, particularly among left-leaning consumers who have traditionally been the company's core customer base, raising serious questions about its planned robotaxi launch in Democrat-leaning cities like Austin.
🔗 Bloomberg
🚘 ZF Receives Nationwide Level 4 Testing Approval in Germany
ZF Mobility Solutions has secured a groundbreaking nationwide approval for Level 4 autonomous driving tests across Germany, eliminating the need for separate testing authorizations for each route or urban area. This milestone, valid until the end of 2026 with possible extension to 2028, allows the company to test autonomous mobility systems in various environments from urban centers to rural areas, potentially accelerating the implementation of sustainable transport projects for public transportation.
🔗 Mobility Portal Europe
🌐 Wayve Nears Commercial Debut with Major Automakers in US and Germany
Self-driving startup Wayve Technologies, which raised over $1 billion last year from investors including SoftBank, Nvidia, Microsoft, and Uber, is approaching commercial launch of its driver-assistance system with global automakers in the US and Germany. The company claims its AI-powered software can adapt to US driving behaviors faster and at lower cost than existing approaches, achieving UK-equivalent performance with just 500 hours of US-specific data collected over eight weeks.
🔗 Bloomberg
📚 Worth Reading
"What does Trump 2.0 mean for autonomous vehicles?"
This analysis from Automotive World examines how the second Trump administration could reshape AV regulation and deployment.
🔗 Automotive World
”Don’t Mistake Ridehailing for AV Ridehailing”
This insightful analysis examines a critical but often overlooked challenge in autonomous mobility: the economics of fleet management. The author presents three models for ridehailing networks—"Human Base, Human Peak" (traditional Uber/Lyft), "Robot Base, Human Peak" (Waymo's current approach), and "Robot Base, Robot Peak" with dynamic ownership (Tesla's potential model).
📊 Weekly Performance
Note: Stock performance data as of March 16, 2025. Past performance does not indicate future returns.
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