00:00Give us a quick elevator pitch about your business.
00:02There is competition in this space, no doubt, in autonomous driving.
00:06This had some hiccups and some regulatory oversight, obviously.
00:10And a lot of different companies are in that place.
00:13But I know about Inceptio and the trucking, long-distance trucking,
00:17that has some autonomous and ADAS features.
00:19What about you guys?
00:21Where are you right now in the evolutionary chain of long-distance trucking?
00:25Okay, good morning, everyone.
00:26Thanks for the invitation.
00:28And my name is Jun Qingwei.
00:29I am CEO of Fender and founder of Cargobot.
00:32So I want to first talk about the name of the company.
00:36You know, Cargobot is cargo means freight, and bot is robot, right?
00:41So the vision and the goal for the company is to revolute logistics with robotics technology.
00:48And currently, we are operating the world's largest autonomous driving truck fleet with 400 trucks.
00:54And actually, there's one major milestone, I think.
00:58I think it's the new start of a new era.
01:01By the end of 2025, some of the fleet, we achieved fully driverless.
01:06So on public road in Mongolia or other provinces in China, you can see those trucks driving actually on the
01:14road without a driver.
01:16And they can achieve profitable.
01:18So that's a very new start for the whole industry, I would say.
01:23I mean, you're talking about level four, so full autonomy.
01:27There's been some regulatory issues, though, with some outages, some accidents and the like.
01:33And the government obviously has taken a step back in some of these sandboxes for full autonomy.
01:39But you're saying in select places, you're already full autonomous.
01:43Yeah, that's a very good point.
01:45And actually, the selection of a scenario is very important for companies like us.
01:50So at the beginning, we select bulk commodity as our entry for this market.
01:58Two reasons.
01:59One is definitely transportation is one of the largest commercial markets for physical AI.
02:06It's a trillion-dollar market.
02:08And at the same time, you need to achieve safe and efficient driving.
02:12That's why we choose some suburban, rural area, north part of China as the entry point.
02:19And also, we introduced the world's first, we call it platooning solution, which means the first truck.
02:24They have a human driver, you call it a pilot driver, and it's leading multiple driverless trucks.
02:30And by combining these together, we already validated that the AI is five times safer than a human driver,
02:39especially for the very rural area.
02:42It's very difficult.
02:44It's a huge driver shortage there.
02:46And we just fill the gap.
02:48And that's why we can expand relatively fast.
02:51How quickly are you seeing customer uptake of your services?
02:55And how does that reflect into your financials, whether revenue year-over-year and eventual profitability?
03:01When is that target?
03:02Yeah.
03:03So over the last three years, our revenue grow like 100% year-over-year.
03:09But that's before profitability, right?
03:11So whenever routes become profitable for our customer, they will just replace all of their existing equipments with this new
03:19product.
03:20And the first product we're providing is this platoon we talked about.
03:24And we are also developing our next generation of product.
03:28It's actually a platform, a tractor or truck without a cabin.
03:34Because we are achieving like 1,000 trucks by the end of the year, all of them will become relatively
03:41driverless.
03:41And then you don't need actually a space for the driver.
03:45And the next generation of product can become more profitable for our customers.
03:48And they will be adopting them very, very fast.
03:53Can you tell us about some of the contracts and partnerships that you're looking at at the moment?
03:57Are they, you know, freight carriers, for example, or are they vehicle manufacturers?
04:02Where's the strategy of that heading?
04:06Yes.
04:07We are a 2B business.
04:08So actually, we are actually serving our customers.
04:12Majority of them are factories, like power plants, coal mines, stone mines, in the steel industry.
04:21So basically, they have hundreds of thousands of tons of products they need to deliver on a daily basis.
04:31And most of the OEMs, the car companies, we see them as our partners.
04:37So we work with six of the 10 leading heavy truck OEMs in China.
04:43And we definitely are very honored to be invested by some of the leading companies in the ecosystem as well.
04:54What about international expansion?
04:56Which markets outside of China are you prioritizing?
04:59And how much progress is being made?
05:02Yeah, so I want to first say that Chinese logistics or level four logistic market is one of the most
05:11fastest growing markets globally.
05:13Definitely, we spent the last four years focusing on China, actually polishing this technology and evolving that.
05:21And we do have our global expansion plan that we are already looking into the Middle East and we are
05:29looking into Australia, Brazil.
05:32And those markets that share the same characteristic, the land, you know, there's kind of rural land in the middle
05:41of the desert,
05:42but very high demand from factories to deliver goods.
05:46Yeah, so we're looking into those markets as well.
05:48Do you have a particular market in the Middle East that you're ready to announce or will be soon announcing?
05:54Yeah, we'll be soon announcing that.
05:56We are forming a deep partnership with the leading logistic company in the Middle East.
06:02Well, you've been spun off from Didi, the big ride-hailing company in China, about three years ago.
06:08How much of a backer are they still?
06:11And also, what kind of fundraising do you need?
06:13And, you know, potentially, you know, the market here in Hong Kong has been booming with different AI-related companies,
06:20including Momentum recently in the autonomous driving space.
06:23So what are your IPO plans and what are your fundraising plans?
06:27Yeah, so Didi is really, you know, like supporting us a lot on the scenario-wise,
06:33because, you know, autonomous driving is a – you need lots of data accumulation.
06:37And Didi's RoboTax has been operating in city environments with lots of pedestrians,
06:42with lots of bicyclists, motorcyclists, and all those data is helping us.
06:46It's helping us to involve our AI technology.
06:49And fundraising-wise, we already finished three rounds of funding.
06:52The last round was Series B, like in March this year.
06:57And we are targeting to raise – and as you mentioned, the market is growing – it's looking pretty good.
07:05So, yeah, we got sufficient funding for us to scale our autonomous robot
07:11and also to help us developing the AI technology.
07:15Yeah, do you have any kind of timeline when you might want to go to the public markets?
07:19Yeah, we're looking – we are really working hard on that, yes, I would say.
07:24Within five years, I would assume?
07:27Well, you know, like for Cargobots, so our first value is to create value for a customer.
07:34So as long as we have sufficient support from a customer and the fleet becomes profitable,
07:40I believe that the market will see that and will get sufficient support either from a private PE or from
07:48an IPO, as you mentioned.
07:49Wins profitability or breakeven in profitability?
07:52Oh, sure, yeah.
07:53So I think in the next two years, two and a half years, the company will are looking into, like,
07:58making profit.
07:59But as of today, in certain routes, the driverless routes we are operating with around 100 vehicles,
08:07fully driverless on certain routes, we still achieve the world's first profitable routes globally.
08:13So that's – we are pretty proud of that.
08:16What's still missing in your offerings and what do you need to spend on?
08:19I mean, the price of compute is going up by the day and data storage and the like and chips.
08:25Yeah.
08:26I think that's only for a short period of time.
08:30If you look at five to ten years, they won't be expensive.
08:33Actually, the price for the autonomous driving, I would say, hardware has decreased dramatically.
08:38Like five years ago, you are looking at maybe half a million dollars if you want to put a car
08:42into autonomous.
08:43But we have already decreased that for the heavy-duty truck.
08:47If you want to make a driverless truck, the total price as of today is around $15,000.
08:54So it's already decreased dramatically.
08:55And we are saving around maybe, I would say, like, you know, $200,000, $20,000 of, like, actually the
09:04labor cost for our customer.
09:06Yeah, because no driver.
09:07And then you're going to take the cab off it as well.
09:09So you can have rolling pallets across the supply chain in China.
09:13Yeah, exactly.
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