Yandex is likely to enjoy a monopoly in the field of unmanned vehicles in Russia, and these activities could be valued at up to $7.7 billion by 2030. This is how UBS envisions Yandex’s prospects in this market, according to an analysis which was revealed last week by the Russian business daily RBC.
Yandex’s commercial operations will begin in 2022 in Moscow and a year later in other regions of Russia, according to UBS. Self-driving vehicles could generate from 170 million to 1.4 billion rubles in revenues for the company as soon as 2022, believe UBS analysts.
“If successful, this activity can make Yandex a much larger company,” they write in their report.
UBS envisions two main scenarios. Should Yandex focus only on passenger transportation (for example, taxis and car sharing), excluding cargo transportation, this business could be valued at some $ 2.6 billion by 2030 (from $ 1.5 billion to $3.1 billion, respectively, in the negative or positive forecast.) In such a case, Yandex’s stock price should increase by 5 to 10% above the current fair price, which UBS puts at $54.3 per share (the share trades currently at $37 on the NASDAQ).
Should Yandex enter the commercial freight market with this technology, its self-driving business could be valued from $3.8 billion to $ 7.7 billion in total. Taxis and car sharing would generate 32% of the generated revenues while cargo transportation would account for 60%. The company’s stock price may increase by 13–26% compared to the current fair price.
“The Russian freight market is much larger than the taxi market, which entails a significant potential revenue increase for players entering this market,” write the UBS analysts, noting however that this sector is very capital-intensive. According to the bank, in 2018 the volume of the freight transportation market in Russia amounted to 815 billion rubles ($13 billion), while the entire taxi market, including the online segment, was worth 642 billion rubles (nearly $10 billion).
The Russian market of self-driving transportation may reach some $9.5 billion in total by 2030, including $4 billion for non-freight transportation services, according to UBS. A variety of factors, from security requirements to technical issues to legislation, may lead to slow down the development or this market, however.
For the moment, Yandex’s unmanned vehicles are being tested only for passenger transportation, not freight purposes. However, this option is not ruled out for the future, a Yandex representative told RBC.
Experiments in Russia, Israel and the USA
Yandex’s self-driving vehicle was unveiled in May 2017. The car incorporates Yandex’s own technologies, such as mapping, real-time navigation, computer vision and object recognition. The company’s proprietary computing algorithms, artificial intelligence, and machine learning “ensure the vehicle’s ability to ‘make decisions’ in complex environments, such as busy city traffic,” the company explained at that time.
The “fully-fledged autopilot functionality” of this car is described as Level 5, according to the international classification system for automated vehicles. (In this system, Level 0 means that a person has full control over the vehicle, and Level 5 involves no human intervention.)
In November 2017, these self-driving vehicles were unleashed on the snow-covered roads of the Moscow region. Yandex.Taxi wanted to check how their automatic cars fare during the winter when snow can obscure road markings, making it hard for the vehicle’s cameras to navigate.
The robotaxi service now operates in Skolkovo and Innopolis, two Russian tech hubs on the outskirts of Kazan and Moscow, respectively.
The self-driving vehicle has also been tested in Israel in late 2018 and demonstrated at CES 2019 in Las Vegas, Nevada. (See more detailed information on the company’s blog.)
In March 2019, Yandex and Hyundai Mobis announced a partnership on self-driving vehicles.
