Less than a month ago, autonomous vehicle company Pony.ai had become the first autonomous driving company in the world to receive a commercial taxi license in China. This allowed it to operate and charge for autonomous ride-hail in Guangzhou, which requires a safety operator to be in the driver’s seat. The Toyota-backed robotaxi service Pony.ai started running 100 driverless vehicles in Guangzhou’s Nansha area this month, with plans to extend to other parts of the city later. In November, the Chinese startup was granted permission to operate 67 vehicles in Beijing, but not a license.
Following this breakthrough, Pony.ai and the Chinese tech behemoth Baidu were granted licenses to operate autonomous ride-hailing services to the public on Beijing’s open roads. The Beijing High-Level Automated Driving allowed Baidu to deploy ten driverless vehicles in Beijing, adding to the company’s current Apollo Go fleet of around 100 cars in the capital city.
Apollo Go users could book a ride using the app from 10 a.m. to 4 p.m., while Pony customers can book a ride using the PonyPilot+ app from 9 a.m. to 5 p.m.
Though many cities in China have authorized autonomous vehicle manufacturers to test self-driving vehicles without a human safety operator in the driver’s seat, this is the first time a fully driverless service has been approved. But unlike California’s driverless permits, which require no human in the car aside from the passenger, Beijing’s permit requires the companies to have a safety operator in the front passenger seat. This is still a huge chapter for the automobile industry in China, as the nation has come a long way since 2016, when the nascent yet ambitious startups started venturing into the autonomous vehicles sector.
China has the potential to become the top market for self-driving cars in the world. According to several studies, driverless vehicles might eventually take over the majority of the Chinese automobile sector. In general, these vehicles are projected to transfer a significant portion of the mobility market value away from products (vehicle purchases) and towards auto-vehicular services. The Mandarin nation is slowly inching towards mass deployment of SAE (Society of Automotive Engineers) Level 4 in the future while connecting up sectors such as automotive, transportation, software, hardware, and data services.
China overtook the United States as the world’s largest and most significant automobile market in 2009, accounting for roughly 70% more than the US. The United States manufactured 11,314,705 automobiles in 2018. China made 27,809,196 units. The world’s third-biggest automaker, Japan, produced 9,728,528 automobiles, while India came in fourth with 5,174,645, implying that China manufactured more vehicles than Japan, India, and the United States combined. This put undue strain on the country’s transportation system, increasing traffic congestion and pollution. As a result, autonomous cars are being offered as a possible solution to some of these infrastructural constraints.
So far, the autonomous vehicle industry in China is moving ahead strongly, as a new generation of challengers and established manufacturers are continuing to entice substantial investor interest without being much affected by the pandemic jolt.
The self-driving vehicle industry in China is filled with hope; a new generation of upstarts is attracting substantial investor interest, and major technology corporations and conventional automakers alike are coming on board. At the same time, the Chinese government is pushing this sector with favorable policies.
According to Capgemini statistics, China’s market preference for autonomous driving is 60%, far greater than the remainder of the world, suggesting China’s adoption of new technology like autonomous driving. This also implies that while Americans are becoming warier about autonomous vehicles, Chinese citizens are becoming more open-minded. Apart from readiness and customer demand, there are many driving factors that are pushing for this change.
The Chinese government is proactively encouraging the sector through regulatory incentives and development efforts to ensure that China and Chinese enterprises will be leading the helm if autonomous driving takes off. For instance, the State Council announced the national strategy plan Made in China 2025 in 2015 to transform and upgrade China’s manufacturing industry. One of the plan’s objectives has been the development of intelligent equipment and goods, including the study and commercialization of self-driving automobiles. In 2017, China issued a number of major legislation and regulations on intelligent cars as part of the Made in China 2025 strategy, including the National Road Testing Guideline.
In addition, new regulations help to legitimize the business and standardize its products, establishing a more defined legal framework within which both operators and investors may operate. Last September, the State Administration for Market Regulation and the Standardization Administration joined hands to release the first national guidelines for grading autonomous driving, which would take effect in March this year and serve as a benchmark for automakers developing the future technology. The Chinese categorization is more precise and explicit than the SAE definition, which is a little vague because it defines L2 as “partial automated driving” and L4 as “high-level automated driving.”
The L0, L1, and L2 levels in China require the driver and the autonomous driving system to collaborate on recognizing and responding to objects and events, compared to the SAE version that requires drivers to do these functions. Since it could constantly handle all dynamic driving activities within its planned operating circumstances, L3 is called Conditionally Automated Driving. At L4, which stands for highly automated driving, the vehicle can take steps to lessen the danger of an accident if the driving automation system fails to conduct the required tasks. Finally, L5 is a completely autonomous vehicle. Here, the system has no operational design range and can handle all dynamic driving functions continuously under any driving situation. In situations, when the driving automation system can no longer execute dynamic driving duties, it automatically takes steps to lower the vehicle’s accident risk to a safe level.
Earlier, the Standing Committee of the Shenzhen Municipal People’s Congress published the Draft for Comments of Shenzhen Special Economic Zone Regulations on the Administration of Intelligent and Connected Vehicles (the “Shenzhen Draft Regulations”) on its website for the public comment on March 23, 2021. The move highlights that Shenzhen is eyeing to bag the title of first Chinese city to commercialize self-driving vehicles. These regulations cover the whole spectrum of autonomous vehicle development, including road testing, access registration, usage management, road transport, traffic accidents, accidents, violation handling, and legal liability. Shenzhen is definitely competing to be the first Chinese city to commercialize driverless vehicles.
On the following day, the Ministry of Public Security of China announced the Draft Proposed Amendments to the Road Traffic Safety Law also called the MPS Proposed Amendments. The proposed amendments to the MPS emphasize the requirements for road testing and access by cars with autonomous driving capabilities, as well as the allocation of accountability for traffic offenses and accidents. It’s the first time that China has suggested autonomous vehicle regulation.
On the investors’ front, the pandemic accelerated the spending and funding on autonomous vehicles as they proved resourceful in delivering medical supplies and food to healthcare professionals and the general public, amid following social distancing protocols. It also helped in disinfecting hospitals and public surfaces to reduce the spread of coronavirus. Furthermore, during the COVID-19 pandemic, a considerable number of individuals were considering giving up their cars for environmental concerns and adopting alternate modes of transportation. For example, Baidu’s autonomous vehicle platform, Apollo, collaborated with Neolix, a local self-driving company, to transport meals and supplies to Beijing Haidian Hospital. Together they offered daily meal delivery to over 100 frontline staff members who were nursing a rising patient population. Apollo and Neolix also used autonomous vehicles to sanitize all roadways on Shanghai Zhangjiang Artificial Intelligence Island on a regular basis. Apollo had also made its low-speed driverless micro-car kits and autonomous driving cloud services accessible to enterprises focused on combating Covid-19 at free of cost.
Analysts consider Baidu’s recent ventures in self-driving vehicles as a future growth driver for the firm as well as the industry as a whole. Consider Baidu’s announcement last year that it will team up with state-owned carmaker BAIC Group to manufacture 1,000 autonomous cars over the next three years and eventually launch a robotaxi service across China.
The Apollo Moon vehicles will be built under BAIC’s ARCFOX electric vehicle brand, with Baidu providing autonomous driving technologies and software.
The above instances also highlight several other factors that are playing an instrumental role in the expansion and growth of the autonomous vehicle industry in China. Industry analysts estimate that mainstream commercialization of autonomous driving systems without a safety driver would take at least a decade. Though the rollout of commercial autonomous vehicles will most likely be at a modest pace, it is already happening region-by-region (Shenzhen, Beijing, etc.) in specialized modes of transportation (Robo-taxis, driverless trucks, etc.) with huge variances in availability across China. Furthermore, COVID-19 has bolstered funding in continuing the R&D of these vehicles and fostered greater collaboration in this area for a variety of applications.
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At the same time, Chinese self-driving car businesses are expanding beyond their own country. For example, Guangzhou-based WeRide and Shenzhen-based AutoX have the testing permits for both driven and autonomous testing in California as of November 2021.
While government regulations, consumer attitudes, increased investment, and other factors are all contributing to China being a worldwide leader in autonomous vehicles, there are some caveats.
China’s dependence on foreign chip manufacturers, in the midst of the semiconductor industry crisis can be a fatal price to pay. As a result, given the emergence of self-driving vehicles that demand increasingly complex AI processors, several Chinese manufacturers are turning to the domestic market in semiconductor development and production to protect themselves from future shortages like the current one. Last year, Beijing-based chipmaker Horizon Robotics revealed the Journey 5, an auto-grade processor with up to 128 trillion operations per second of AI computational capacity for L4, or level 4, autonomous driving.
The necessity for truly autonomous technology to demonstrate that it can outperform people, also demands adjusting to local driving styles, changing traffic and terrain conditions, and legislation. Regulations on autonomous cars might vary significantly between provinces, even within the same city. If a startup receives permission to operate a fully autonomous trial in one place isn’t necessarily more technically sound than its competitors. It could indicate the local regulator has relaxed rules to support self-driving trials and market.
