China’s automakers are in a heated race towards achieving fully self-driving vehicles — and tech giant BaiduBIDU

is gearing up to take the lead with its cutting-edge robotaxi technology. Following the release of draft rules and Shanghai’s inclusion as a city allowing driverless taxis without supervision, Baidu’s stock has surged 14% since Tuesday.

• Often dubbed the “Google of China,” Baidu has invested heavily in AI and autonomous driving in response to China’s economic slowdown, affecting ad revenues.
• Guotai Junan International’s Li Muhua believes, “Baidu’s Apollo Go is expected to break even in Wuhan in 2024 and be profitable in 2025 with an increase in its fleet in the city” (BBG).

Driven to win: Baidu isn’t alone in this pursuit. The Chinese government has greenlit eight other automakers to test Level 3 autonomous vehicles, allowing operation without human oversight under certain conditions — a milestone beyond what Western companies have achieved. This includes TeslaTSLA

, whose Model Y has been approved for government use — a first for the automaker. Competition is only heating up, with Musk planning to unveil the company’s own robotaxi in October.