Securities Star Li Ruohan
Recently, the autonomous driving company Waymo Zhixing (0800.HK) released its 2026 Q2 and first-half financial results. The company has not yet escaped its loss-making predicament. In the first half of the year, its net loss was RMB 792 million. Since 2021, the company’s cumulative losses have exceeded RMB 9.2 billion.
Securities Star notes that the high R&D expenses are the main reason for the company’s losses. In addition, the sharp rise in selling expenses further increases the burden on profitability. How to strike a balance between R&D investment and profit targets has become a pressing issue for Waymo Zhixing to solve. Since the beginning of this year, although the company’s L2++/L3 business and overseas expansion have seen rapid development, challenges remain. On the one hand, after vehicle model targeting and localization, there is still a gap before scaled revenue can be realized. On the other hand, whether the asset-light expansion model used overseas by the company can build a long-term competitive moat still needs to be validated by the market.
Overseas asset-light model’s moat still needs to be tested
The financial report shows that in the first half of 2026, WeRide achieved revenue of RMB 346 million, up 73% year over year. Net losses during the period were RMB 792 million, basically in line with the same period last year. Among them, the company’s Q2 revenue was RMB 230 million, up 82% year over year; net losses during the period were RMB 401 million.
The company’s business is mainly composed of two segments: L4 autonomous driving and advanced driver-assistance driving L2++/L3. Among them, the L4 segment—primarily including autonomous taxi Robotaxi and autonomous buses Robobus—is the company’s largest revenue source. In the first half of the year, it generated revenue of RMB 179 million, accounting for 52% of total revenue for the period. In particular, revenue in Q2 was RMB 125 million, up 47% year over year.
Leveraging years of accumulated high-level autonomous driving technology, WeRide is extending some of its L4 capabilities into the mass-production ADAS (advanced driver-assistance system) domain to expand new growth points. Since 2026, the company’s L2++/L3 business has developed rapidly, with second-quarter business revenue up nearly 26-fold year over year. To date, WRD 3.0 has secured mass-production model sign-offs for more than 30 vehicle models. It has conducted road testing and adaptation verification in overseas markets including France, Germany, and Japan. The company’s Q2 shipment volume reached 30,000 sets.
Some analysts also point out that from vehicle model sign-off to mass production delivery, there are multiple key steps involved, including engineering iteration development, multi-round testing and verification, and supply-chain adaptation and introduction. Therefore, vehicle sign-off does not equal immediate revenue recognition. The company’s current L2++ mass-production models are mainly concentrated in two automakers: GAC and Chery. If the sales of core models fluctuate or if collaboration relationships change, it will directly affect business growth rates. At the current stage, the commercial value enabled by L4 technology is more reflected in capability validation, and there is still a gap to scaled revenue contribution.
Securities Star noted that WeRide is aggressively developing overseas markets. Its business has already covered 13 countries and more than 60 cities. Currently, the company has achieved fully driverless commercial operations in Abu Dhabi and Dubai. It also has a pilot plan announced with Uber to launch Spain’s first commercial autonomous taxi service in Madrid.
Against this backdrop, the company’s overseas revenue has been growing rapidly. In the first half of the year, annual revenue reached RMB 119 million, and its share of total revenue increased from 23.5% in the first half of 2025 to 34.5%.
It should be pointed out that unlike the domestic heavy-operations model, WeRide adopts an asset-light, high-profit expansion approach overseas. The company does not hold operating vehicles. Instead, it partners with local leading mobility platforms such as Uber and Grab, where the partners bear heavy-asset responsibilities including vehicle procurement, localized operations, and user acquisition. WeRide handles tasks such as localizing and adapting its autonomous driving technology, and monetizes through technology licensing fees and revenue sharing from operating streams.
It is worth noting that although the asset-light model reduces capital burden, whether it can build a long-term competitive moat remains uncertain. Industry viewpoints suggest that adopting this model means WeRide needs to rely on local partners and mobility platforms to obtain passenger traffic resources, and most of these platforms will not choose only one autonomous driving company as their sole partner. As more participants enter the overseas Robotaxi segment, whether WeRide can maintain competitiveness based on its existing technical foundation and operational experience still needs to be tested over time.
High R&D spending consumes profits
Although WeRide’s revenue has increased significantly, the company has not yet exited losses. Looking across a longer time horizon, from 2021 to 2025, the company’s net losses were RMB 1.007 billion, RMB 1.298 billion, RMB 1.949 billion, RMB 2.517 billion, and RMB 1.655 billion, respectively. Based on calculations, since 2021 the company’s cumulative losses have exceeded RMB 9.2 billion.
Securities Star noted that consistently high R&D spending is the primary reason for the company’s losses. The company’s R&D expenditure increased from RMB 443 million in 2021 to RMB 1.372 billion in 2025, an increase of approximately 209.71%. In the first half of 2026, the company’s R&D spending continued to rise, up 24% year over year to RMB 798 million. In particular, the company’s R&D expenses in Q2 reached RMB 434 million, up 36% year over year.
The company’s R&D mainly goes toward the continuous iteration and optimization of an autonomous driving technology platform and large autonomous driving models. To enable an autonomous driving system to handle a wide range of long-tail extreme scenarios, companies need to make substantial fixed investments related to computing power resources, GPU hardware, and a closed-loop data pipeline.
Yimei Consulting CEO Zhang Yi said that WeRide’s losses are an objective result of dual constraints from policy and right-of-way factors. In China, full self-driving Robotaxi operations still mainly follow a pilot-by-zone approach, and cross-regional operations have not been fully opened up. There is a clear bottleneck in the rapid expansion of order volume. Pressure on the cost side comes from multiple aspects. R&D investment, vehicle depreciation, and safety operation and maintenance are all fixed, “non-discretionary” expenses. Moreover, R&D investment aimed at maintaining safety bottom lines is necessary both now and in the future.
It is worth noting that as industry policies and standards continue to improve, the competitive focus of autonomous driving companies has shifted from technical feasibility to the ability to build a commercial closed loop. Whether an autonomous driving company can continue operating, effectively reduce costs, win users’ willingness to pay, and convert technology into operating performance is the core question that autonomous driving companies must answer next.
In addition to R&D pressure, the growth in selling expenses further squeezes WeRide’s profit margin. In the first half of 2026, affected by increased personnel costs and marketing/advertising spending, the company’s sales expenses were RMB 51.9 million, up 86.7% year over year.
Although current expense pressure is high, management believes that the turning point is approaching. At the earnings conference, the company’s CFO, Li Xuan, emphasized that WeRide’s substantial R&D spending can largely be shared across businesses such as L4 and L2/L3, and will not increase in proportion to the growth of its vehicle fleet and revenue. The AI infrastructure has also passed the peak investment phase. Based on the current operating outlook and future development plans, WeRide is expected to achieve a full break-even target before 2029.
It is worth noting that amid continuous cash burn on R&D, WeRide’s cash reserves have also shown a clear decline. By the end of the reporting period, WeRide’s cash and cash equivalents and time deposits totaled approximately RMB 5.4 billion, a decrease of RMB 1.6 billion from the beginning of the year. (This article was first published by Securities Star, author | Li Ruohan)