BIDU Stock In For A Rough Ride: China Reportedly Hits Brakes On Robotaxi Licenses After 100 Apollo Go Cars Stall In Wuhan

• Beijing will not issue new licenses to self-driving companies to add new robotaxis to their fleets, start a new test project, or expand into a new city, Bloomberg reported, citing sources.
• Last month, more than 100 Apollo Go robotaxis stalled on city streets, triggering an investigation by the authorities.
• Stocktwits sentiment for BIDU remained ‘neutral.’

Baidu, Inc. shares declined 2% in overnight trading heading into Wednesday and could end in the red for a third straight session, following a report that Beijing had halted new licenses for autonomous vehicle operators after dozens of Baidu Apollo Go taxis unexpectedly stopped on the streets of Wuhan last week.

The incident alarmed authorities, and three agencies, including China’s Ministry of Industry and Information Technology, convened a meeting earlier this month with officials from cities that have robotaxis or autonomous-driving pilots, Bloomberg reported on Wednesday, citing people familiar with the matter.

Regulators called for local governments to conduct a full self-review and enhance safety monitoring to prevent similar incidents, according to the report. 

The suspension of new licenses prevents self-driving companies from adding new robotaxis to their fleets, starting new test projects, or expanding into new cities, the report said.

Apollo Go’s Wuhan Outage

On March 30, more than 100 Apollo Go robotaxis stalled on city streets. Baidu has yet to comment on the incident and Bloomberg reported, citing local media, that the outage was likely caused by a system fault.

Although still a small part of its overall operations, Baidu has scaled its Apollo Go business aggressively over the last year. Apollo Go is now available in over 20 cities in China, and Dubai and Abu Dhabi in the UAE, and is gearing up for launch in the UK and Switzerland. 

Baidu shares dropped nearly 4% in Hong Kong on Wednesday, also pressuring rivals' shares. U.S. shares of Pony AI and WeRide were down 5.7% and 2.8% in the overnight session. Chinese companies are seen to be at the forefront of bringing autonomous taxis to global markets, competing with Alphabet’s Waymo.

Retail’s View On BIDU

On Stocktwits, the retail sentiment for BIDU remained ‘neutral,’ unchanged since the start of the week. Investors noticed the latest stock trigger but dismissed the need for an alarm.

“$BIDU LOL first market gives 0 value to Baidu robotaxi, yet ready to give negative value when robotaxi is affected,” a trader wrote. 

The drop might chip away at a rebound building for BIDU. Shares have gained about 17% from an eight-month low level at the end of March. Baidu is scheduled to report its fiscal first-quarter results on May 18.

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