China leads in au­tonomous driv­ing

Ex­perts say sec­tor is still de­vel­op­ing so key play­ers should make moves now

Global Times - - Business - By Zhang Hong­pei

De­spite the neg­a­tive con­no­ta­tions that Uber’s fa­tal self­driv­ing crash brought to the tech­nol­ogy one month ago, the sec­tor is, nev­er­the­less, at­tract­ing more and more cap­i­tal bets and fu­el­ing ex­cite­ment as time goes on, es­pe­cially in China.

The coun­try will likely emerge as the world’s largest mar­ket for au­tonomous ve­hi­cles, with an ex­pected value of $500 bil­lion in sales of au­tonomous cars and mo­bil­ity ser­vices by 2030, ac­cord­ing to the lat­est study pub­lished by global man­age­ment con­sult­ing firm McKin­sey & Com­pany on Mon­day.

At the mo­ment, the tech­nol­ogy is still at the early de­vel­op­ment phase, al­though it has a promis­ing fu­ture and high ex­pec­ta­tions, es­pe­cially in the Chi­nese mar­ket, ex­perts said.

“One key con­cern is how to en­sure pas­sen­ger safety. The au­tonomous ve­hi­cle, equipped with high-tech, is es­sen­tially a trans­port ve­hi­cle, so an­a­lyz­ing the trans­port en­vi­ron­ment is also im­por­tant,” said Zeng Zhiling, an an­a­lyst at Shang­hai-based con­sul­tancy LMC Au­to­mo­tives.

“For an­other thing, pre­vent­ing the au­tonomous driv­ing sys­tem from be­ing hacked also mat­ters a lot,” Zeng told the Global Times Mon­day.

Ac­cord­ing to a re­cent McKin­sey sur­vey, only 30 per­cent of re­spon­dents said they think that re­li­a­bil­ity and safety con­cerns will be re­solved by as early as 2025, while an­other 33 per­cent said they be­lieve these con­cerns will be re­solved be­tween 2025 and 2029.

Mean­while, 36 per­cent of re­spon­dents said the is­sues won’t be re­solved un­til some­time af­ter 2030, show­ing that those con­cerns are a big bar­rier for the tech­nol­ogy’s wide­spread adop­tion.

Yale Zhang, head of Shang­haibased con­sul­tancy Au­to­mo­tive Fore­sight, told the Global Times on Mon­day that it will take at least five to 10 years for au­tonomous driv­ing tech­nol­ogy to take root and that it will be ap­plied first to com­mer­cial ve­hi­cles in­stead of pas­sen­ger cars.

How­ever, whether the tech­nol­ogy can achieve a trick­le­down ef­fect at a faster speed de­pends on the di­rec­tion it is aim­ing for, ac­cord­ing to Dai Yi­fan, di­rec­tor of the In­tel­li­gent and Con­nected Ve­hi­cle Cen­ter at the Suzhou Au­to­mo­tive Re­search In­sti­tute of Ts­inghua Uni­ver­sity.

“If the busi­ness is aimed at the cus­tomer, for ex­am­ple, pur­chases of au­tonomous ve­hi­cles and their en­trance onto the roads might take more time. But if it is aimed at the busi­ness side, such as ap­ply­ing the tech­nol­ogy in spe­cific sce­nar­ios, then that has al­ready been re­al­ized,” Dai told the Global Times Mon­day.

Bei­jing-based au­tonomous driv­ing tech­nol­ogy start-up idriver­plus on Mon­day an­nounced it had se­cured B1-round fi­nanc­ing led by China’s largest on­line search en­gine op­er­a­tor Baidu Inc, in­dus­try news site lei­ re­ported, with­out not­ing the fig­ure.

Zhang Zhaode, CEO of idriver­plus, said the strate­gic cap­i­tal from Baidu has helped ac­cel­er­ate the com­pany’s prod­ucts – mainly ap­plied in spe­cific sce­nar­ios like clean­ing the streets and de­liv­er­ing pack­ages – to be­come com­mer­cial­ized in mass pro­duc­tion in 2018, ac­cord­ing to the re­port.

Fa­vor­ing poli­cies

On Thurs­day, China is­sued guide­lines for road tests of in­tel­li­gent con­nected ve­hi­cles, al­low­ing lo­cal au­thor­i­ties to eval­u­ate lo­cal con­di­tions and ar­range road tests for au­tonomous ve­hi­cles.

The guide­lines, jointly is­sued by the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy (MIIT), the Min­istry of Pub­lic Se­cu­rity and the Min­istry of Trans­port, will take ef­fect on May 1, ac­cord­ing to a doc­u­ment on the web­site of the State Coun­cil.

Road test ap­pli­cants must be reg­is­tered in China, ca­pa­ble of mak­ing auto com­po­nents and able to con­duct R&D on con­nected cars, the doc­u­ment said.

“More pol­icy sup­port is set to come in the near fu­ture,” Zeng fore­cast.

In fact, be­fore the na­tional guide­lines were rolled out, some Chi­nese cities had al­ready taken ac­tions at the pol­icy level.

For ex­am­ple, South­west China’s Chongqing Mu­nic­i­pal­ity nod­ded to the agree­ment and al­lowed road-test­ing of un­manned ve­hi­cles in March, fol­low­ing Bei­jing and Shang­hai.

China’s door to self-driv­ing road tests was opened four or five years later than in the US, thus the lat­ter has al­ready ac­cu­mu­lated rich data in this field, ac­cord­ing to Zeng.

As stated in the guide­lines on stan­dards and sys­tem-build­ing in the in­tel­li­gent and con­nected ve­hi­cles sec­tor, which were jointly re­leased by the MIIT and Stan­dard­iza­tion Ad­min­is­tra­tion of China in De­cem­ber 2017, a pre­lim­i­nary sys­tem to sup­port low-level self-driv­ing tech­nol­ogy should be built by 2020, while an ad­vanced one to sup­port higher-level tech­nol­ogy should be built by 2025.

“Given the cur­rent timetable, we have to quickly catch up if we want to re­al­ize the na­tional tar­get that was nailed down last year,” Zeng noted.

Whose cheese?

A mix of var­i­ous play­ers, in­clud­ing ma­jor tra­di­tional au­tomak­ers, in­ter­net tech gi­ants, start-ups and mo­bil­ity ser­vices providers, are all mak­ing foray into the self-driv­ing sec­tor in China, based on their own ad­van­tages.

Baidu in March com­pleted the coun­try’s first au­tonomous driv­ing road test based on a 5G net­work en­vi­ron­ment, mark­ing a ma­jor step for the in­ter­net giant in its push to­ward driver­less car tech­nol­ogy.

Alibaba Group Hold­ing, has be­gun map­ping out plans to take on the driver­less sec­tor, and Wang Gang, chief sci­en­tist of Alibaba’s AI Lab, has been con­duct­ing re­lated re­search, ac­cord­ing to a note the com­pany’s cloud com­put­ing arm Alibaba Cloud sent to the Global Times on Mon­day.

Com­pared with ris­ing tech firms, tra­di­tional au­tomak­ers tend to be more dis­creet, said Zhang, not­ing they can­not af­ford cases like Uber’s, which would be re­ally “dev­as­tat­ing” to them. In March, an au­tonomous Uber car failed to slow down and fa­tally hit a 49-year-old woman walk­ing her bike across a street in Ari­zona.

“For au­tomak­ers, high-tech com­pa­nies and mo­bil­ity ser­vices providers com­pet­ing in China, the au­tonomous ve­hi­cle phe­nom­e­non may seem a decade or two away, but de­fer­ring po­si­tion­ing strate­gies can rob play­ers of both in­flu­ence and de­grees of free­dom,” said Christo­pher Thomas, part­ner at McKin­sey’s Bei­jing of­fice.

“De­cid­ing where to play, de­vel­op­ing a road map to ac­cess the tech stack, de­cid­ing the right al­liance and ecosys­tem strat­egy, and de­vel­op­ing the strate­gic agility to up­date their ap­proach as new data comes in about the mar­ket, are all es­sen­tial moves com­pa­nies need to make now, not later,” he noted.

As part of the “Made in China 2025” strat­egy, which aims to trans­form China into a man­u­fac­tur­ing su­per­power, the in­tel­li­gent and con­nected-ve­hi­cle sec­tor, or au­tonomous driv­ing sec­tor, is at­tract­ing both pol­icy sup­port and cap­i­tal fa­vors across the coun­try. A thriv­ing mix of play­ers has boosted the sec­tor’s prospects in the do­mes­tic mar­ket, the world’s largest ve­hi­cle mar­ket. How­ever, the tech­nol­ogy is still de­vel­op­ing in its early phase, with ex­perts cau­tion­ing that some bar­ri­ers still ex­ist on the road ahead and that it is vi­tal for key play­ers to make bold moves now.

Photo: IC

China’s first driver­less mini bus runs along a road on the cam­pus of South­east Uni­ver­sity in Nan­jing, cap­i­tal of East China’s Jiangsu Prov­ince, on March 28.

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