By Jiahui Huang

Chinese robotaxi makers want to bring their self-driving cars abroad. Facing regulatory and geopolitical obstacles in some markets, they are finding the welcome mat out in the Middle East.

Baidu's Apollo Go, WeRide and Pony AI--the "Big Three" of China's autonomous driving scene--have announced plans to expand in the Middle East, looking to replicate the success they have had in China.

Chinese companies entering the Gulf region are attracted by the area's openness to new technologies.

"The ambitious push by many Gulf authorities towards smart transportation, coupled with the high density of the urban population, makes it a prime location for the deployment of autonomous vehicles," said Liang Zhang, regional general manager at Baidu's autonomous-driving unit Apollo Go.

Saudi Arabia aims to have autonomous vehicles powering 15% of public transport by 2030, while Dubai and Abu Dhabi have similar targets.

China-U.S. trade tensions provide Chinese companies with further incentive to seek alternative markets, a trend that began during the first trade war under the Trump administration in 2018.

"The Middle East is a region that is friendly to both the U.S. and Chinese governments, and companies," said Ming Lee, head of Greater China autos and industrials research at BofA Global.

The Middle Eastern governments' tech-forward stance makes for more robotaxi-friendly regulations that resemble China's rather than the stricter approach seen in Europe and the U.S., said James Liu, Deutsche Bank's head of diversified industrials group in Asia.

Tapping into the Middle East would also help WeRide, Pony AI and Apollo Go reach the scale that they need to hit profitability.

Nasdaq-listed WeRide said in May that it will expand into Saudi Arabia in partnership with Uber Technologies, securing an extra $100 million investment from the U.S. ride-hailing giant. The two already operate a service in Abu Dhabi.

Silicon Valley-founded Pony AI has also teamed up with Uber for a Middle East rollout, and is launching driverless taxi services with Dubai's Roads and Transport Authority. Apollo Go plans to deploy 100 robotaxis in Dubai by end-2025 with the transport authority, eyeing at least 1,000 over the next three years. It has a tie-up with United Arab Emirates-based Autogo in Abu Dhabi too.

If Chinese robotaxi companies' forays in the Middle East succeed, they can replicate the expansion in other major markets, said BofA Global's Lee.

Reaching critical mass won't be easy.

Fleet coverage has to grow to cater to demand and reduce waiting times, said Allen Cheng, Goldman Sachs's head of Greater China technology research.

China's robotaxi fleet, the world's biggest, stands at about 1,700. In the Middle East, that footprint is even smaller. Public figures on just how many robotaxis Pony AI, WeRide and Apollo Go have in the region aren't available.

The region's fragmented geography presents another challenge.

"The robotaxi business is a really localized business," WeRide Chief Executive Tony Han said after a recent trip to the U.A.E., during which he jetted back and forth between Abu Dhabi and Dubai, talking to officials about regulatory permits and constraints. "You have to understand local traffic rules, local driving behavior."

Getting the public to accept the safety of driverless cars could also be tricky, even with the support of local authorities. Still, Chinese robotaxi companies have a big advantage over rivals when it comes to the Middle East, thanks to comprehensive supply chains that offer scope to keep lowering costs.

Pony AI, WeRide and Apollo Go have all developed robotaxis with an upfront cost of $30,000-$50,000 per vehicle, a fraction of the price of robotaxis from U.S. players such as Alphabet's Waymo, Deutsche Bank's Liu said.

If Chinese companies maintain their cost advantage and there aren't any major safety incidents, Deutsche Bank analysts expect to see a strong Chinese presence in non-U.S. markets.

As auto supply chains increasingly split into the U.S. versus the rest of the world, it is inevitable that Chinese firms will rise to the top, said Liu.

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

(END) Dow Jones Newswires

James Luu is Deutsche Bank's head of diversified industrials group in Asia. "Chinese Robotaxi Companies Look to the Middle East for Growth," at 1043 GMT on June 3, misstated his last name as Liu.

(END) Dow Jones Newswires

Allen Chang is Goldman Sachs's head of Greater China technology research. "Chinese Robotaxi Companies Look to the Middle East for Growth," at 1043 GMT on June 3, misstated his name as Cheng.

(END) Dow Jones Newswires

June 04, 2025 22:23 ET (02:23 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.