China’s Driverless City Delivery Race Turns Into a Fight for Freight
TREE NEWS reports: The competition in China’s autonomous urban delivery sector is moving beyond vehicle sales into a battle for cargo orders. JD Logistics has announced plans to procure 1 million autonomous delivery vehicles over five years and selected Horizon Robotics as its computing solution provider. Meanwhile, Neolix is leveraging Didi Freight to secure on-demand merchant delivery orders, and Zelos Intelligent expanded its rental and franchise model on September 10 to offer hourly rentals and per-order payment services.
Zelos co-founder and CCO Zhou Qing told reporters that the company has launched self-operated fleets in 45 cities, with roughly one-third achieving positive unit economics. These operating samples are giving Zelos confidence to expand, but the cargo that supports fleet expansion is precisely what competitors are fighting over.
From Vehicle Sales to Transport Services
The industry is shifting from fixed short-haul routes between courier stations to on-demand merchant transport needs. Technology has reduced the burden of deploying new routes, accelerating the entry of automakers and autonomous driving companies, while logistics platforms are also participating in vehicle development.
Zhou Qing noted that as more players enter the market, price competition in outright sales and long-term leases is inevitable. Some express delivery customers only use vehicles five to six hours a day, leaving idle time that can be rented out. This has opened the door to hourly rentals and per-order payment models, allowing fleets to serve smaller cargo owners who only need a few hours of service occasionally.
Neolix founder and CEO Yu Enyuan sees nighttime logistics as a new market. In its Qingdao autonomous vehicle network, nighttime orders have begun to exceed daytime orders. Meanwhile, Neolix’s on-demand delivery service with Didi Freight has completed over 1.5 million orders and plans to expand to 50 cities this year.
Competition and Cooperation Blur
New entrants from the passenger vehicle autonomous driving space can reuse algorithms, while automakers can provide manufacturing capacity, allowing them to avoid some of the R&D and supply chain exploration costs. Zelos is also providing a path for automakers to enter the autonomous driving market through its Zelos Inside business, partnering with Dongfeng, Yutong, and GAC Lingcheng.
“Map-free” technology is reducing the preparation burden for new routes. Momenta adopted high-definition map-free technology for its RoboVan in Suzhou, and Zelos has been delivering vehicles with map-free solutions since August. This reduces the preparation time for new routes, making it feasible to organize small, on-demand orders into sustainable business.
Market Implications
The shift toward on-demand transport services means autonomous delivery companies are moving downstream into logistics operations, competing with established logistics platforms and freight companies. This could pressure margins for traditional urban delivery providers while creating new revenue streams for technology providers.
For investors, the key question is whether autonomous delivery companies can achieve sustainable unit economics. Zelos’s claim that one-third of its 45-city fleet is profitable is a positive signal, but the asset-heavy nature of fleet operations and the need to secure cargo orders remain significant challenges.
The involvement of JD Logistics, which is both a major buyer and a participant in product development, suggests that large logistics players will capture much of the cost savings from autonomous driving. Technology providers that can offer differentiated solutions and secure stable cargo sources will be best positioned.
Key Takeaways
- China’s autonomous urban delivery sector is shifting from vehicle sales to transport services, intensifying competition for cargo orders.
- JD Logistics’ plan to procure 1 million vehicles highlights the scale of demand but also the bargaining power of large logistics buyers.
- Companies like Zelos and Neolix are experimenting with rental, franchise, and on-demand models to improve vehicle utilization and unit economics.
- Map-free autonomous driving technology is lowering the barrier to deploying new routes, enabling more flexible and on-demand services.
- Investors should watch for evidence of sustainable unit economics and the ability of technology providers to secure stable cargo sources.
