China Opens up to AVS

2020-12-01 Automotive News

SHANGHAI — In 2009, 24 years after Beijing opened the domestic auto industry to foreign investment, China overtook the U.S. as the world’s largest auto market. Six years later, it became the largest electric vehicle market, thanks to the rollout of government subsidies.

In recent years, dozens of Chinese cities have opened local roads to allow a growing team of self-driving technology companies to test robotaxis, a trend that promises to turn China into the world’s largest market for autonomous vehicles in the not-distant future.  

Among these cities, the latest is Suzhou, which has a population of more than 10 million and is about a one-hour drive west of Shanghai.

On Oct. 22, Momenta, a self-driving technology startup, became the first company to launch a robotaxi fleet in Suzhou. Residents in the city’s Xiangcheng district can use a mobile phone app to book a ride.Veteran software engineer Cao Xudong created Momenta in Beijing in 2016 with the financial backing of domestic venture capitalists. In 2017, the startup raised $46 million from a consortium of investors including Daimler and Nio Capital — a private equity firm associated with Chinese EV startup Nio.

In Xiangcheng, Momenta’s robotaxis operate on roads that pass by residential areas, shopping malls, office buildings, schools and construction sites. The vehicles have drivers inside, ready to take control in case of emergencies. 

Cao said his company plans to start removing drivers from the robotaxis in 2022. “They will become 100 percent driverless in 2024,” he told Shift last month in a Momenta robotaxi, which was adapted from a Lincoln MKZ sedan. The vehicle operated without human intervention throughout the 7.5-mile drive, which took about 30 minutes.

DRIVERLESS FUTURE

Suzhou is among several Chinese cities competing to prepare local roads for self-driving vehicles.

With encouragement from the central government, more than 40 demonstration zones for connected and automated vehicles have been created in Chinese cities to date. 

These zones have an infrastructure system that allows interaction among vehicles, and data-sharing between vehicles and traffic lights, road cameras, 5G base stations and smart lanes, according to Automobility, a consultancy in Shanghai.

As the Chinese government acted to contain the coronavirus outbreak that ravaged the country in the first two months of this year, the pandemic’s impact on the operation of robotaxis in these zones is minimal.

FULL SPEED 

This year, major Chinese cities such as Shanghai and Beijing have significantly expanded local pilot zones for autonomous vehicles.

Didi Chuxing, China’s largest ride-hailing service provider, and Baidu Inc., the Chinese equivalent of Google, have capitalized on the opportunity.

In June, Didi put its robotaxi fleet into operation in Jiading, a suburb of Shanghai where more than 30 miles of roads have been made available for testing connected and automated vehicles.

In October, Baidu opened its Apollo Go Robotaxi service to the public in Beijing. The service covers a network of about 430 miles, with nearly 100 pickup and drop-off stations set up in residential and business areas along the roads.     

Autonomous driving technology startups have also seized the opportunity. Momenta has obtained a license from Shanghai for testing its robotaxis.

AutoX is a 4-year-old company funded by China e-commerce giant Alibaba Group Holding and based in the south city of Shenzhen, where it has begun deploying fully driverless vehicles. In August, the startup launched a robotaxi fleet in Shanghai. It has also been licensed for the same purpose in the south China city of Guangzhou and the central China city of Wuhan — the epicenter of the viral outbreak.

Silicon Valley’s Pony.ai, meanwhile, is also testing robotaxis in Guangzhou. Autonomous driving originated in the U.S., and there is still a gap between Chinese companies and their U.S. peers in development of AV technology, Momenta CEO Cao said.

But he believes it won’t take long for Chinese companies to narrow the gap.

“With the combination of government policy support, attention of industry partners, 5G/V2X, China’s technical talents, we have an opportunity to catch up with U.S. companies within five years,” he added.

COMMERCIAL ACTIVITY

In the view of Bill Russo, founder and CEO of Automobility, the main attraction China holds for autonomous driving technology companies is not the development of the technology itself, but the vast opportunities for commercialization.

“If an international company wants to be in the AV game, they need to deploy in China. Because here they can deploy more efficiently as a service business model, and the size of market here is far larger than anywhere else in the world, whether it is moving people through with an app-based mobility platform or moving goods,” he noted.

To understand how autonomous driving technology will transform mobility services in China, Russo said one only needs to take a look at how smartphones have changed the lives of people living in the country.

Smartphones emerged earlier in the U.S. than in China. But now, for people in China, the devices are much more than mere gadgets; they’re indispensable. Mobile phone payments, for instance, have largely replaced cash in China, Russo explained.

“That is what we are about to see with autonomous driving,” he predicted.

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