The first self-driving taxi in Guangzhou, Guangdong province, starts trial operation. (PHOTO / FOR CHINA DAILY)

Without anyone behind the wheel, a taxi automatically started and made its way down the road, only to slowly come to a full stop at the first red light. Hu Wanqing, a sales manager from Guangzhou, Guangdong province, was fascinated by the self-driving taxi.

It was the first time the 32-year-old Hu hailed such a vehicle. Hu said she did feel nervous at first, but her worries were soon dispelled when the taxi gradually braked to allow a pedestrian to cross its path.

"The car is no different than an ordinary taxi. It just runs smooth and steadily, like a taxi driver with over 20 years' experience," she said.

Like Hu, many in Guangzhou have begun to be able to hail self-driving taxis, or robotaxis, since late June after the country's autonomous driving start-up WeRide announced that its self-driving taxi service will be available on Alibaba's navigation platform Amap.

Autonomous driving is revving up its commercialization in China, especially as the COVID-19 outbreak has sped up related applications. Among them, robotaxis have come to the forefront of self-driving commercialization with several tech giants and self-driving companies recently launching unmanned taxi services.

The autonomous driving sector is speeding up commercialization in China. It is expected that large-scale application of such cars will be a reality over the next two or three years, which is earlier than expected.

Zhang Li, Chief operating officer of WeRide

ALSO READ: Volvo partners with Alphabet's Waymo on new electric robotaxis projec

Leading ride-hailing start-up Didi Chuxing opened its on-demand robotaxi services in Shanghai in June. It followed tech giant Baidu Inc, known for its Apollo self-driving platform, announcing the opening of its self-driving taxi service in Changsha, Hunan province, in April.

Momenta, a Daimler-backed Chinese autonomous driving start-up, said that some of its vehicles will be driverless by 2022 in Suzhou, Jiangsu province, where it received a test license, and its entire robotaxi fleet will operate without backup drivers in 2024.

"The autonomous driving sector is speeding up commercialization in China. It is expected that large-scale application of such cars will be a reality over the next two or three years, which is earlier than expected," said Zhang Li, chief operating officer of WeRide.

"The nation's efforts in new infrastructure are also accelerating the commercialization of self-driving vehicles and bringing a unique open market environment for local tech start-ups," Zhang said.

Currently, the nation's robotaxis are based on Level 4 autonomous driving, where a vehicle can run autonomously without human intervention in most cases. Autonomous driving is divided into six levels from Level 0 to Level 5.

Level 3 refers to "eyes off" in which the vehicle will handle situations requiring an immediate response, but the driver must still be prepared to intervene within a limited time. Level 5 is the highest standard, which means no human intervention is required at all.

For the time being, the country's robotaxis are all equipped with a backup driver in the car to ensure safety in case of emergencies. Companies also rely on safety control centers to monitor self-driving vehicles and road conditions in real time and give timely assistance and instructions to vehicles in need.

"Robotaxis can generate huge economic benefits in terms of profitability of labor cost savings. Replacing drivers with driverless technology will save 60 percent of total costs," said Yang Zeyuan, an analyst from CITIC Securities.

For most robotaxi services, passengers pay the same fee as for regular taxis. In Guangzhou, for instance, passengers pay a flagfall fee of 12 yuan (US$1.7) and another 2.6 yuan every kilometer.

"The advanced technology requires many inputs, which may lead to difficulties in the short-term profitability of operating robotaxis. But we are bullish on long-term profit prospects," Yang said.

The commercialization of robotaxis is nearing with the decline in the cost of self-driving car components, Yang said.

"With people's increasing demand for ride-hailing services, robotaxis will usher in broader development prospects in the country. It is also expected that the global market will reach hundreds of billion dollars in the near future," Yang added.

The Ministry of Industry and Information Technology said the size of the global robotaxi fleet will reach 10,000 this year and 500,000 in 2025.

Autonomous driving has gained traction and investment since the COVID-19 outbreak as investors have become more cautious about investing in other industries amid the contagion.

The sector has been seeing a flurry of major deals like the autonomous driving unit of Didi Chuxing getting US$300 million in investment from Japan's SoftBank. Another autonomous driving firm, Pony.ai, finished a new round of funding totaling $462 million.

Wu Gansha, CEO of Chinese self-driving start-up Uisee, believes the sector is now ready for a takeoff. "Investors are more confident on the commercialization of intelligent driving and hence willing to invest. From this year, we should start seeing large-scale commercialization of driverless vehicles," Wu said.

"We have been seeing a healthy pickup in orders," said Wu, whose start-up focuses on high-level autonomous driving and completed a new round of financing in February.

During the outbreak, several hospitals and companies used self-driving vehicles to deliver necessities like masks and meals to patients and medical workers.

Earlier this year, China unveiled a blueprint to boost autonomous driving in the country. According to the blueprint, the country will realize "scale production of vehicles capable of conditional autonomous driving and commercialization of high-level autonomous vehicles in certain scenarios by 2025".

"Smart vehicles have become a global strategy and China has a strategic edge in developing smart cars with the complete automobile industry and evolving information technology," the document said.

In March, the Ministry of Industry and Information Technology launched classification standards for autonomous driving in China, which has helped speed up the country's autonomous driving industry.

READ MORE: Intel buys Moovit for US$900m to develop robotaxis by 2022

According to the latest report from global management consulting firm McKinsey& Co, China will become the world's largest market for autonomous vehicles, with revenue from sales of such new cars and mobility services expected to exceed US$500 billion by 2030.

It predicted that by 2030, the total sales volume of autonomous vehicles is expected to hit US$230 billion and autonomous vehicle-based services will generate a gross booking of around US$260 billion.

Chinese consumers surveyed have shown their willingness to pay as much as an extra US$4,600 as a premium to purchase autonomous vehicles, while customers from the US and Germany are willing to pay an extra US$3,900 and US$2,900, respectively, it said.

However, Yang Xu, a life and services analyst at consultancy Analysys, pointed out that the commercialization of autonomous delivery remains a long way off and still faces some challenges ahead.

Before this can be achieved, a number of problems including complicated road conditions, technological bottlenecks, operating costs and supervision need to be dealt with, Yang said.