WeRide’s Commercialization Breakthroughs and Challenges

1. Business Model Analysis

WeRide has established a diversified business matrix covering "passenger transportation + freight + sanitation" but has yet to overcome the industry-wide challenge of "increased revenue without increased profitability."

a) Revenue Structure: Robotaxi as a Growth Engine, with Increasing Dependence

Based on WeRide’s annual report, WeRide's revenue comes from three main categories, with total revenue reaching USD $17.9 million in the second quarter of 2025, a year-on-year increase of 60.7%:

• Robotaxi operation: Revenue for the second quarter of 2025 reached CNY 45.9 million yuan, surging by 836.7% year-on-year to a quarterly high. It mainly comes from ride-hailing service fees in key markets such as Abu Dhabi and Beijing. The revenue model employs a "base mileage fee + duration fee" structure, priced at approximately 80%-90% of traditional ride-hailing services. It also generates revenue through a "fixed fee + revenue sharing" agreement with Uber.

• Technology Service: This includes ADAS R&D services, autonomous driving solution licensing, etc. The gross profit margin is relatively high (approximately 40%), but it is significantly affected by order cyclicality. For example, revenue declined in 2024 due to the non-renewal of certain projects. Furthermore, customer concentration is another notable risk, with the top two customers previously contributing 52.4% of revenue.

• Vehicle sales: It includes sales of Robobus, Robovan, Robosweeper etc. Thousands of intended orders have been accumulated, but the conversion cycle is relatively long.

Figure: WeRide’s disaggregation of revenue, source: WeRide’s annual report

b) Costs and Expenses: Rigid Investments Suppress Profit Margins

• Operating cost: it includes depreciation of over 1,500 autonomous vehicles (with an annual depreciation rate of approximately 15%), procurement costs for core components such as chips (up 31.4% year-over-year in Q4 2024), venue rentals, and energy consumption.

• R&D expenses: In 2024, R&D expenditure reached USD $154 million, primarily allocated to L4-level algorithm iteration, GXR end-to-end platform, and HPC 3.0 computing platform upgrades. Salaries for core R&D team constitute a major expenditure, reflecting a "technology-first" strategy.

• Administrative and Selling Expenses: In 2024, administrative and sales expenses amounted to USD $160.6 million and $7.6 million, respectively. These were primarily allocated to global team expansion, marketing, and compliance certifications (such as license acquisition in Saudi Arabia and Belgium).

c) Net Profit: The Trend of Increasing Losses Has Not Yet Been Reversed

Financial data indicates that the company has experienced net losses for four consecutive years, with increasing magnitudes: Net losses from 2021 to 2024 reached USD 142 million, USD 183 million, USD 275 million, and USD 355 million respectively, followed by a loss of 112 million dollar in the first half of 2025. The primary reason is that the average daily utilization rate of Robotaxis has not reached the break-even point (generally considered to be above 30 rides in the industry, while the company's publicly available data is far below this level), combined with persistently high R&D investment, making short-term profitability unlikely.

2. UE model

To achieve unit economic break-even, three factors must be considered: 1) vehicle manufacturing cost; 2) safety operation cost; 3) fleet operation costs.

Vehicle Manufacturing Cost: Currently, the manufacturing cost of WeRide's latest generation Robotaxi is approximately CNY 300,000 yuan (USD $42,120). WeRide anticipates a further 20%-30% reduction in next-generation product costs with the future popularization of integrated design for sensor kits. Therefore, the BOM cost of WeRide's Robotaxi is set at CNY 300,000 yuan (USD $42,120). Assuming a vehicle service life of 6 years, the annual depreciation cost is 50,000 yuan (USD $7,020) per vehicle when calculated using the straight-line depreciation method.

Safety operation cost: According to Chinese laws, the ratio of remote safety operators to vehicles must be at least 1:3. Assuming this ratio increases to 1:30 in the future, and with an annual salary of CNY 120,000 yuan (USD $16,850) per safety operator, the safety operation cost would be CNY 4,000 yuan (USD $560) per vehicle annually.

Operation cost: This includes maintenance, charging/refueling, insurance and parking costs. Assuming a comprehensive operation cost of CNY 50,000 yuan (USD $7,020) per vehicle per year.

Revenue: Assuming each vehicle travels 200 kilometers per day with passengers at a rate of USD $0.35 per kilometer, the annual GMV per vehicle is USD $25,550. Assuming WeRide's Robotaxi business relies on third-party platforms such as Didi and Uber, rather than its own, and these platforms charge a 15% commission, the annual revenue per vehicle will be USD $21,718.

Table: Calculation of WeRide’s UE model

Calculations show that the annual profit per vehicle is approximately USD $7,118 (operating margin 33%). With the increasing adoption of autonomous driving and decreasing sensor hardware costs, the Robotaxi business has significant potential for profit improvement. Therefore, WeRide's Robotaxi business model is financially viable. The remaining challenge lies in operation costs associated with fleet size—unit costs will decrease significantly as the fleet size expands from 100 vehicles to 1,000 vehicles.

Therefore, WeRide's ability to achieve profitability hinges on: 1) progress in fleet scaling. Whether it can rapidly expand from the current fleet of 700 vehicles to over 1,000 to achieve economies of scale and reduce unit costs; 2) progress in overseas business. According to WeRide's management, the gross profit margin of overseas business can reach 70%, far higher than the 40% domestically.

3. Operational Status: Leading Global Layout, Pending Release of Scale Effects

WeRide leads the industry in operational coverage, but its core markets still have room for improvement in operational density and efficiency.

Number of Operating Cities: As of October 2025, the company has covered 11 countries and over 30 cities. In the domestic market, WeRide focuses on core cities with high policy openness, including Beijing (covering 600 square kilometers from the Economic Development Zone to Beijing South Railway Station), Guangzhou, Shanghai, and Wuhan, and has implemented commercial Robotaxi services. Regarding overseas markets, the company has a presence in the Middle East (Abu Dhabi, Riyadh), Europe (Belgium, France, Spain), and Southeast Asia (Singapore). Currently, WeRide and Uber jointly operate the largest Robotaxi fleet in the Middle East, utilizing WeRide's new-generation GXR model—a mass-produced Robotaxi designed for large-scale commercial deployment, accommodating up to five passengers. Each vehicle, operating within a 12-hour shift, typically completes trips exceeding 6 kilometers, with an average order value of USD $1.1-1.2. The average daily number of orders per vehicle surpasses 15, exceeding the break-even point for fully autonomous driving.

Vehicle Deployment: As of the second quarter of 2025, WeRide had deployed over 1,500 autonomous vehicles, including 1,108 self-owned vehicles and 415 vehicles from customers and partners. By vehicle type, over 700 are Robotaxis—slightly more than Pony.AI— primarily deployed in markets such as Abu Dhabi and Beijing. The company expects the total fleet size to reach 3,000-5,000 vehicles by 2026, with the number of Robotaxis increasing to 2,000-3,000.

4. Future Operational Plan: Focus on Core Markets

Domestic Market: Over the next 1-2 years, WeRide will concentrate resources on cities where licenses have already been secured, such as Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, and Chongqing, to increase fleet density in specific areas, planning to increase single-vehicle coverage in core areas to two vehicles per square kilometer. Scenarios will expand from urban cruising to dedicated "Airport - Business District - Residential Area" routes, and pilot projects for connecting Robotaxis with public transportation will be launched in Beijing and Guangzhou.

Overseas Market: The Middle East (UAE, Saudi Arabia) has favorable regulatory policies for Robotaxis, with large open areas and clear plans for the number of licenses. Therefore, the Middle East is a strategic priority for the company. On May 6, 2025, WeRide and Uber jointly announced an expansion of their strategic partnership, planning to deploy autonomous Robotaxi services in 15 additional international cities over the next five years, including markets in Europe and the Middle East. On August 15, 2025, WeRide announced that Grab (NASDAQ: GRAB), a super app platform in Southeast Asia, would make an equity investment of millions of US dollars in the company.

Conclusion:

Currently, WeRide’s revenue comes from three sources: hardware sales, annual technology service fees, and operation revenue sharing. Driven by economies of scale, the company is expected to achieve profitability in its financial statements in the future. Going forward, the key to success will be whether it can increase fleet density by focusing on core markets and optimize its profit model through technology-driven cost reduction.