Momenta expects robotaxies to be profitable by 2024

High-level autonomous driving has a lot in common with mountain climbing: everybody knows the view atop will be magnificent, but very few know how to reach there.

For example, Level 4 autonomous driving technology can free drivers' hands and minds, but its large-scale application is widely estimated to require road tests of at least 100 billion kilometers, and solving at least a million problems.

However, Daimler-backed Chinese autonomous driving startup Momenta expects to build a totally driverless and profitable robotaxi fleet by 2024.

The four-year-old company, which is also China's first unicorn, a startup worth more than $1 billion, in the sector, said it will solve mileage and problem-solving issues by taking a two-pronged approach.

"Momenta don't make cars or hardware. Rather, we make their brains, or deep-learning capacities," said CEO Cao Xudong, who previously worked at Microsoft and artificial intelligence giant SenseTime.

Momenta sells software to tier 1 suppliers and carmakers, which brings in income and mountains of data that feeds back into its algorithms at relatively low cost.

More importantly, it does not use a human-driven rule, which means an engineer comes to the rescue whenever a problem pops up, but an automatic data-driven method.

"Sure, we can solve 100 problems with 100 people, but we can't hire one million engineers to answer one million questions… So if you can build an automatic problem-solving system, automation will take care of a lot of the work for us."

Momenta started to receive orders for its semi-autonomous solutions from Chinese and international carmakers in 2019.

Besides its software, its solutions mainly involve less expensive sensors, such as millimeter-wave radars and high-definition cameras instead of high-priced lidar sensors.

Momenta did not give the names of its customers, but Cao said cars with its software are rolling out this year, and many more will follow starting from 2022.

"Once the partners' vehicles go out on the market, driving data begins pouring in, and Momenta will input that data into algorithmic training and periodically upgrade the autonomous cars for consumers," Cao said.

He said some of its vehicles will already be driverless by 2022 in Suzhou, Jiangsu province, where it received a test license last month, and its entire robotaxi fleet will operate without safety drivers in 2024.

When it removes the drivers, whose salaries account for the majority of a taxi company's costs, a positive operating margin per vehicle is ensured, Cao said.

"It is meaningless if they are not profitable. We don't do things that burn money, especially things that the bigger they get, the more money you lose."

If things go as planned, it will roll its light-asset model into other cities outside Suzhou.

Momenta's investors include German automaker Daimler and internet services giant Tencent Holdings. It had raised over $200 million by 2018, and is valued at over $1 billion. The company did not reveal whether it's currently raising funds, but said it has a "stable cash flow" for at least three more years.