The L4 Autonomous Driving Inflection Point: Momenta Bets on 2028

An autonomous driving test vehicle equipped with a roof-mounted LiDAR on a city road at night.

One vehicle earning $10,000 a year—not from selling cars, but from racking up mileage. This is the math Momenta has run for L4. First, look at who is generating revenue right now: nearly 60% of first-half revenue came from four customers, and Mercedes-Benz, SAIC, and GM are both shareholders and paying customers.

On October 20, Momenta CEO Cao Xudong made a clear judgment: 2028 will be the inflection point for the leap from L2 to L4, with the market opportunity expanding tenfold to a hundredfold. That day, the smart driving sector moved sharply, and Xingmin Zhitong hit the daily limit.

The real value of the inflection point is that the logic of making money changes. Smart driving revenue today is tied to vehicle sales: in the first half, 321,000 units installed corresponded to 607 million yuan in licensing revenue, less than 1,900 yuan per unit, relying on volume. In the L4 era, revenue is tied to mileage: gross profit per vehicle can reach $10,000 a year, decoupled from the vehicle sales cycle. Between these two models, the valuation gap is more than thirtyfold.

L4's Three-Year Timeline: 2028 Is the First Year of Normalized Operations

In the first half of the year, Robotaxi services were already operating in 6 cities across 3 countries; the first mass-production vehicle will be deployed in the fourth quarter, with several hundred vehicles and licenses in more than 10 cities by year-end. In 2027, the fleet will expand to several thousand vehicles covering 30+ cities, with algorithm safety reaching 10 times that of a human driver. In 2028, the shift will be toward normalized commercial services, marking the first year of L4 at scale. On the passenger vehicle side, cumulative design wins exceed 240 models, with more than 1.2 million units installed.

Momenta Robotaxi fleet size and operational phase timeline from 2026 to 2028. Source: disclosed figures from Momenta's earnings call.

Momenta does not build cars. Its L4 Robotaxi reuses the passenger vehicle mass-production technology stack, so marginal costs are far lower than for players starting from scratch, and fleet assets belong to mobility platforms.

How the L4 Money Works: $10,000 Annual Gross Profit per Vehicle

Industry estimates: by 2031, the global Robotaxi market will reach 1 million to 1.5 million vehicles. At $10,000 annual gross profit per vehicle, that corresponds to $15 billion in annual gross profit.

Global Robotaxi market capacity around 2031 and the corresponding annual gross profit based on company estimates. Source: disclosed figures from Momenta's earnings call; gross profit amounts are editor calculations.

By contrast, for L2: in the first half, the licensing fee per unit was less than 1,900 yuan, or 1.3% of a 150,000 yuan vehicle price. Collecting 2,000 yuan once versus collecting $10,000 a year in mileage fees under L4 is a difference of more than thirtyfold.

But this money is not something every design win can capture. Mercedes-Benz accounted for 31.8% of revenue in 2023, falling to 16.9% by 2025, while the amount actually rose—not because the customer stopped paying, but because other customers emerged. Revenue from outside the top five customers rose from 22% to 37%. More important is repeat business: the Mercedes-Benz partnership expanded from the all-electric CLA to the GLC and GLE, and the Cadillac XT5 PHEV and Volkswagen ID.ERA 9X all use Momenta's solution. Downstream fuel vehicle sales are falling, but all newly won projects are on the new energy vehicle side. Existing customers continuing to award new projects—that is real recognition.

Two Gates Before L4 Hits the Road: Two Regulations in January and July 2027

What truly determines the pace is two gates with clear timing. Two national standards will be implemented in January and July 2027 respectively, with the latter requiring system safety to reach the level of a qualified human driver—this is the hard threshold for L4. The mass-production version of the SAIC Audi E7X will launch in 2027, right in that window.

The charging model is also changing: from one-time delivery to a combination of "hardware + software + subscription." Once subscriptions are proven, revenue decouples from the vehicle sales cycle and becomes recurring revenue that grows with mileage—this is the prototype of L4 charging by the kilometer. Horizon Journey 7 chip 20