Uber’s Chinese robotaxi romance, and Webull’s strong debut

“It’s impossible to pick an ultimate winner in autonomous driving today.”

By Doug Young & Rene Vanguestaine

Autonomous driving companies and discount brokerages with China-U.S. connections are stepping into a fiercely competitive global arena. Recently, Chinese robotaxi operator Momenta made global headlines with its strategic alliance with Uber, signaling a broader trend of cautious bets in the autonomous driving race. Meanwhile, Webull (BULL.US), a U.S.-listed discount brokerage with deep Chinese roots, has experienced significant volatility following its SPAC debut.

Uber’s multi-bet strategy

Momenta is just one of several Chinese autonomous driving firms making waves internationally, alongside rivals like Pony AI (PONY.US), WeRide (WRD.US), and Baidu (BIDIU.US; 9888.HK). Momenta’s partnership with Uber, set to launch robotaxi services in Europe next year, follows similar announcements from Uber involving WeRide and Pony AI, prompting questions about Uber’s triple-dipping strategy.

From our perspective, Uber’s cautious approach — partnering simultaneously with multiple providers — makes strategic sense given the nascent and unpredictable nature of autonomous vehicle technology. It’s wise not to put all your eggs in one basket, particularly when no player has definitively proven its long-term viability.

However, this strategy isn’t without risk. Autonomous driving remains in its infancy, with reports of unreliability for Baidu’s robotaxi service and the viral story of a Waymo vehicle stuck in an Arizona roundabout, underscoring potential pitfalls. While these incidents typically cause no physical harm, the reputational risks in today’s viral social media environment are substantial. Uber appears willing to accept these risks, perhaps banking on its ability to manage inevitable setbacks.

Momenta itself has ambitions to list in the U.S., though the window for its previously secured regulatory approval from China is rapidly closing. With U.S.-China tensions rising, uncertainty clouds such listings. Investors considering robotaxi stocks face a daunting task — without deep technological expertise, differentiating among these startups is challenging, amplifying investment risk.

Webull’s rocky ride

Webull, the U.S.-listed brokerage with significant operations in China, highlights another dimension of investing complexities in U.S.-China hybrids. Initially soaring fivefold post-SPAC listing, Webull shares have sharply retreated, though they still trade significantly above the SPAC listing price.

Webull’s Alibaba lineage signals strength, given the successful track record of former Alibaba employees launching tech-driven businesses. Targeting primarily ethnic Chinese investors abroad gives Webull a clear initial growth niche. However, the brokerage sector is crowded, dominated by established players like Robinhood in the U.S. and Futu among overseas Chinese communities.

Yet, being a SPAC comes with baggage; many SPAC listings have historically underperformed despite initial hype. Moreover, Webull’s substantial China-based operations heighten concerns about data security — an issue plaguing TikTok and similar companies with strong Chinese ties. These data risks won’t vanish easily and may escalate with Webull’s growing prominence.

From a financial standpoint, Webull’s shrinking revenue and recent swing from profitability to losses raise further red flags. The company’s global expansion ambitions are clear, with planned presences in the UK, South Africa, and multiple Asian markets. But competing effectively requires either standout differentiation — whether on price, service quality, or unique investment tools — or significant financial muscle to “buy market share.” The latter approach, costly yet common in China, offers uncertain prospects and potential pitfalls.

Ultimately, both Momenta’s ambitious in autonomous driving and Webull’s brokerage platform highlight the challenges investors face in sectors shaped by technology, competition and geopolitics. These stories remind us that in high-stakes, tech-driven markets, careful, informed navigation is essential.

About China Inc

China Inc by Bamboo Works discusses the latest developments on Chinese companies listed in Hong Kong and the United States to drive informed decision-making for investors and others interested in this dynamic group of companies.

Subscribe to China Inc on your favorite app:

Apple Podcasts

Spotify