By Jiahui Huang

Caocao Mobility, a ride-hailing platform backed by Chinese automaker Geely, is aiming to deliver its first annual profit this year.

Hitting the milestone would be a big win for a company competing with rivals like DiDi Global--dubbed "China's Uber"--in the increasingly crowded ride-hailing and robotaxi fields.

Caocao has yet to turn a yearly profit. An asset-heavy operating model, continued expansion and robotaxi investment have weighed on its bottom line.

A mix of aggressive cost controls and market expansion at home and overseas will change that, the company's CEO says.

After narrowing losses by 49% last year, CaoCao's goal is to reach annual profitability in 2026, said Chief Executive Gong Xin.

Eventually, he thinks the company can take a more than 15% share of the autonomous driving market.

The Suzhou-based company is pursuing a different strategy than its competitors.

For one, it is backed by major car manufacturer Geely, giving it the ability to produce the robotaxis it offers ride-hailing services on.

Caocao operates its own fleet of vehicles focused on high-end government and enterprise clients, in contrast to asset-light platforms that rely on independent drivers.

It is also shifting away from using promotions to attract users, focusing on lowering costs across operations: from vehicle ownership to after-sales services.

"Promotions aren't sustainable," Gong said. "When you pull them back, your efficiency reverts to where it was."

The pivot hasn't eliminated the cost of growth, however, analysts say.

Caocao's sales and marketing expenses climbed nearly 48% in 2025, driven by commissions paid to aggregation platforms, highlighting the continued cost of acquiring users even as it tries to cut reliance on promotions.

That shows the limits of cost controls in a business still shaped by platform dynamics, where scale and traffic remain critical advantages.

To break out of that, Cacao is placing a longer-term bet on robotaxis.

The company started deploying robotaxis last year and operates around 100 vehicles in Hangzhou. It plans to expand to five or six Chinese cities this year, placing about 100 vehicles each, said Gong.

Overseas, it plans to enter two or three new markets, and launch services in Hong Kong, he added.

So far, the company's rollout remains modest compared with industry leaders such as Baidu's Apollo Go, Pony AI and WeRide, which have deployed larger fleets across more cities.

But Gong says the race is just getting started.

"A robotaxi business isn't just about autonomous-driving technology," he said. "At the end of the day, the competitive advantage will be in operations."

A company needs to excel not only in driving technology, but in how vehicles are deployed, maintained and coordinated at scale, the CEO said.

"In the app era, users choose platforms," Gong said. In the AI era, customer patterns will change.

A shift in how riders choose services could challenge the dominance of app-based platforms such as DiDi, whose strength rests on controlling user demand and dispatch networks.

In a system where algorithms determine ride allocation, the front-end app's importance could diminish, potentially elevating the role of companies that control vehicles and operations.

Caocao is positioning itself for that by building a system that combines vehicle design, energy-management and fleet operations through Geely's manufacturing network.

Whether the strategy will succeed remains to be seen, as ride-hailing has historically proven resistant to structural disruptions.

Caocao's relatively small robotaxi footprint also raises questions about whether an operational edge can compensate for later starts in technology and deployment.

Gong said Caocao will roll out a specific robotaxi services vehicle in the first half of 2026, with mass production starting next year.

Citi analysts say that could improve unit economics as Caocao moves toward fully driverless operations.

"From the very start, our strategy has been to build competitive advantage on the supply side," Gong said.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

April 12, 2026 22:53 ET (02:53 GMT)

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