China to spearhead autonomous driving revolution

China marque Nio plans to launch its own AV next year - a sleek high-performance car, the EP9. Photo / Supplied

Car-based "mobility services", such as car-sharing, ride-hailing as well as driverless cars with entertainment, information and communications services, are projected to generate US$1 trillion ($1.4t) in revenue for suppliers globally in 2040 from nearly zero a decade ago, according to latest industry figures from information and analytics provider IHS Markit.

And China, the world's largest market for electric cars, is predicted to be in pole position to shape the future of such services, transform global business models, improve road safety conditions and cut pollution, according to industry experts.

So far, 290 cities have initiated "smart-city" pilot projects controlled by artificial intelligence (AI) technology, including 93 that are focused on mobility that could potentially use infrastructure interlinked by software to allow driverless cars, or autonomous vehicle (AV), and shared-driving models, according to the South China Morning Post.

Shanghai has already opened the country's first driverless vehicle pilot zone, in July, with about two hundred vehicles being tested in a closed test zone.

"The combined impact of mobility services, driverless technologies, electric cars and government policies [promoting them] will propel a national transformation in personal mobility," said Jim Burkhard, head of crude oil markets at IHS Markit.

But Burkhard adds that the mass use of driverless cars could still be five years off, with many stages of technology investment and government support required, and of course a willingness by the consumer to embrace the idea.

Andrew Dinsdale, managing director at Deloitte Digital is slightly more optimistic about China's adoption of self-driving cars, however, as according to its own research, customers here are enthusiastic about their imminent arrival into everyday life.

A global car study conducted by Deloitte showed just 26 per cent of Chinese think self-driving vehicles will be unsafe, down from 62 per cent last year, and compared with 47 per cent in the US.

Fifty three per cent of Chinese expect AV technology to be delivered rapidly in coming years by smart savvy start-ups, significantly more than the 28 per cent of consumers who think it will be delivered by traditional car makers, and 19 per cent by existing technology giants.

In contrast, 23 per cent of Americans think it will be brought about by new AV firms, as do just 12 per cent of Japanese consumers.

"This is a consumer that trusts technology companies to deliver safe, autonomous products," said Dinsdale.

There has also been a sudden rush of new Chinese car brand start-ups emerging in recent years, which look set to challenge the traditional car giants.

One of the newest Chinese electric vehicle companies is Byton, which has a presence in three countries and around 400 employees. After about 18 months spent in anonymity as the Future Mobility Corporation, Byton is now raising its profile and is expected to make its global debut at the Consumer Electronics Show 2018 in Las Vegas with its self-driving electric SUV.

While China marque Nio plans to launch its own AV next year – a sleek high-performance car, the EP9.

One of the highest profile promo campaigns so far has been by Lynk & Co, a new concept Chinese brand under Geely Automobile, which is making its China brand launch at Shanghai Auto Show. Baidu also launched a US$1.5 billion ($2.1b) AV driving fund in September.

From January to September 2017, China sold more than 234,000 electric cars, a 24 per cent year-on-year increase making the nation the world's largest market for electric cars, according the Markit data. By comparison, over the same period, the United States sold just over 140,000 electric cars – a 26 per cent increase compared with the previous year.

This article first appeared in the South China Morning Post