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Exclusive | Baidu restructures autonomous driving business amidst sluggish demand from automakers

Baidu will put more focus on the operation and commercialization of its self-driving robotaxis after this reshuffle.

Photo: Stock.tuchong.com

Chinese internet powerhouse Baidu is restructuring again its autonomous driving business by merging two business units under its intelligent driving group (IDG) to consolidate resources and reduce redundancy at a time when the company’s autonomous driving solutions are receiving lukewarm reception from its automobile partners.

The two teams to be merged are the autonomous driving unit (ADU) and the intelligent vehicle unit (IVU), local tech media outlet 36Kr first reported citing sources close to the matter.

The reshuffle is one of the most recent changes Baidu did to its IDG arm, which was a legacy of its then COO and president Lu Qi. The company formed IDG in early 2017 on the basis of ADU, IVU, aiming at developing L4 and L3 level automation respectively, and CarLife unit, which focuses on the automotive internet of things.

Lu left Baidu in the middle of 2018 to help launch US incubator Y Combinator’s China operation and now runs his own venture fund MiraclePlus.

Beijing-based Baidu is one of the pioneers amongst Chinese internet companies to develop self-driving technologies. Its autonomous driving exploration started as early as 2013, before it eventually brought various efforts under the same roof of the IDG arm two years ago.

The Chinese search giant widened its loss in the third quarter of this year to RMB 6.34 billion (USD 900 million). Over the years it has been keeping raising stakes for the autonomous driving business which is still a far cry from being profitable. The business was also rumored to be spun off for independent operation and seek outside funding.

The goal of the latest reshuffle, which was first revealed internally last month at an executive meeting by Li Zhenyu, general manager at IDG, according to sources 36Kr spoke to, is to split the technology and business roles of the IVU, with the former being absorbed by the ADU.

After the reorganizing, the new IDG will consist of the autonomous driving technology unit, the intelligent vehicle business unit, in addition to a unit that dedicates to high definition mapping which is an important component of self-driving technologies.

Baidu declined to comment on the restructuring or the reason behind when contacted by 36Kr.

The departments rejig could also be a result of the fact that Chinese automakers aren’t that enthusiastic about picking up the Level 3 autonomous solutions developed by Baidu’s intelligent vehicle team.

Currently, the monetization prospect of Level 3 autonomous solutions in China is gloomy. And automakers’ demand for pre-installed Level 3 technologies, an area Baidu IVU specializes in, is not clear yet. 

“(Automakers) are less keen on autonomous driving this year. Those who said to roll out L3 solutions in 2020 or 2021 have all delayed their launch,” Chen Liming, president of Bosch Chassis Control Systems China, told 36Kr.

Baidu also felt the chill. “Most of our original equipment manufacturers (OEMs) clients have postponed Level 3-related products and there are also controversies over the definition of the technologies at this level,” said Li in an interview with 36Kr during the Baidu AI developer conference in July.

It seems that Baidu is switching gear to put more focus on the operation and commercialization of its self-driving robotaxis in addition to other L4 solutions coming from its ADU team.

For instance, it has obtained 150 self-driving transportation licenses for trial services in China’s various cities including Wuhan and Cangzhou. Additionally, it has started in September to use its robotaxi fleet composed of 45 vehicles to transport real passengers in Changsha, capital of Central China’s Hunan province, indicating that China’s robotaxis are one step closer to the commercialization of self-driving technologies.

Baidu will also enhance its service in smart transportation and the internet of vehicles. It has established partnerships in intelligent transportation with more than 10 cities in China including Changsha, Chongqing, and Baoding. The company has joint hands with more than 60 automakers to deploy its in-car smart operation system based on the autonomous driving platform Apollo.

The restructuring is not likely to completely do away with redundancies, according to an employee. “The two (new) units still have many overlapping projects, such as high definition mapping. The IVU team has started testing LiDAR (Light Imaging Detection and Ranging) sensors in their technological solutions, while ADU is also experimenting with similar projects,” the employee told 36Kr.

36Kr is KrASIA’s parent company.