Shares in Chinese EV maker Baidu (BIDU) stalled today after about 100 of its self-driving cars brokedown at the same time leaving passengers stranded for hours in heavy traffic on the highways of Wuhan.
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According to a report in the South China Morning Post, around 100 Baidu Apollo Go robotaxis were stuck on roads in the city because of a system failure. Some passengers decided to get out of the vehicles, but others worried about the heavy traffic flowing around them decided to stay put for up to two hours.
Police were called and there were reports of crashes caused by the disruption. However, no injuries have been reported.
The cause of the breakdowns is unknown and is currently being investigated. However, there has been speculation that it could have been due to cloud connectivity issues, software bugs pushed in updates, or problems with centralized fleet management systems.
Intense Robotaxi Competition
The system collapse will be a huge worry for Baidu, which has been rolling out its robotaxis throughout China in cities like Wuhan, Beijing and Shenzhen. It is also pushing into international markets such as Switzerland, Abu Dhabi and London.
In such a competitive market against the likes of Tesla (TSLA), Google’s (GOOGL) Waymo and Amazon’s (AMZN) Zoox, this could lead to a brand and reputational hit. It could also put pressure on authorities in China and potentially elsewhere to expand safety regulations, both for passengers inside robotaxis and for those human drivers who might have to swerve around stationary objects.
It is why legal and regulatory issues are such a key risk for the business – see above.
Is BIDU a Good Stock to Buy Now?
On TipRanks, BIDU has a Strong Buy consensus based on 9 Buy and 3 Hold ratings. Its highest price target is $215. BIDU stock’s consensus price target is $171.97, implying a 54.34% upside.
