On August 13, reported that WeRide (NASDAQ:WRD) is scouting Australia, South Korea, Japan, and Southeast Asia for its next robotaxi markets, one day after posting a quarter that more than doubled overseas revenue. The Chinese autonomous driving company is moving fast on two fronts at once, chasing new countries while trying to prove the economics actually work. That combination is what makes this stock worth watching right now.
CEO Tony Han said that WeRide is in talks with Australian regulators and with European countries, on top of already eyeing South Korea, Japan and Southeast Asia. The company entered Denmark earlier in August, its sixth European country, and its vehicles now operate in more than 60 cities across 13 countries. Commercial robotaxi service is set to begin in Singapore and Hong Kong.
Overseas revenue jumped 164% year-over-year in the second quarter, outpacing 82% growth in total revenue and pushing international sales to nearly 40% of group revenue, according to the August 12 earnings call. That growth comes from an asset-light model, licensing technology to local partners rather than owning vehicles. WeRide also holds autonomous driving licenses in eight countries and operates in 12, a head start management says puts it two to three years ahead of rivals in the Middle East and Europe.
Its ADAS business is scaling even faster, with revenue up roughly 2,600% year-over-year and cumulative deliveries topping 30,000 units, a figure the company wants at 100,000 by the end of this year and 500,000 next year. Gross margin hit a record 37.5% in the quarter, and operating expenses grew just 9.2% year-over-year while revenue grew 82%, a gap management points to as proof the model can scale. WeRide is still deep in the red.
The company posted a net loss of RMB401 million in the second quarter, only 1% narrower than a year earlier, a sign profitability is further off than the revenue growth suggests. R&D spending rose 36% year-over-year to RMB434 million as WeRide keeps funding its AI foundation models, spending that could keep pressuring near-term results. The asset-light strategy driving overseas growth also creates a dependency problem.
WeRide leans on platform partners such as Uber and Grab to generate robotaxi demand, and if those partners route riders to a competitor instead, its leverage in that market erodes. Competition is creeping in from another direction too, as other ADAS companies and automakers argue they can use driving data they already collect to build their own robotaxi businesses. Hedge fund ownership of WeRide fell from 19 funds in the prior quarter to 15 in the most recent one, a pullback suggesting some institutional buyers trimmed their positions.
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