Toyota-backed Pony.ai is bringing its robotaxi service to Shanghai, following Guangzhou in Guangdong province, Beijing and California in the United States.

A fleet of Lexus RX models equipped with Pony's autonomous driving solutions are hitting the streets in Jiading district in Shanghai, said the Chinese startup on Wednesday at the World Artificial Intelligence Conference.

Zhang Ning, vice-president of Pony.ai, said passengers of its robotaxi fleet feel like they are chauffeured by experienced drivers.

"To be frank, our autonomous vehicles can maneuver themselves better than most Didi drivers," said Zhang.

The ability is primarily thanks to its road test mileage of over 6 million kilometers and continuously updated algorithms.

Pony.ai has been updating its autonomous driving solutions. Zhang said the latest generation vehicles, which will feature lidar solutions developed in collaboration with Luminar, will start volume production in 2023.

He expects the sector to see faster development in the coming years as the prices of sensors and other vital components will fall sharply and local authorities in more and more Chinese cities are coming up with favorable policies.

"It will make sense financially if an autonomous vehicle's cost equals an ordinary car plus a driver's wage, which is around $10,000 a year, " said Zhang.

In addition to passenger cars, Pony.ai has been exploring autonomous driving solutions for heavy trucks since 2018. Its truck division was established in 2020.

Li Hengyu, head of the startup's truck division, said on Wednesday the company has tested autonomous trucks for over 200 days, with the accumulated mileage totaling 37,466 kilometers.

There is huge potential for autonomous driving in the logistics sector, said Li. He estimated that the technology can cut the cost of a truck fleet by 40 percent, as there will be little need for human drivers.

Statistics show that China's road freight totaled 33.8 billion metric tons in 2020, and there were over 30 million truck drivers on the roads every day.

Established in 2016, Pony.ai is one of China's leading autonomous driving startups. It has research facilities in Guangzhou, Shanghai, Beijing and the Silicon Valley in the United States.

By the end of February 2021, it raised $1.1 billion from investors including Toyota, with its valuation exceeding $5.3 billion.