In the U.S., the movement on autonomous vehicle technology is happening quicker than expected, with the recent federal government guidance on the issue and Uber testing driverless taxis in Pittsburgh as the two biggest signs. The changes afoot in the U.S. have the potential to significantly alter the global automotive industries and energy markets, given that Americans own the most cars and consume the most oil. At the same time, autonomy plans in China, the world’s most populous country and largest source of oil demand growth in the past couple of decades, will also have global implications. The Asian juggernaut has to deal with some of the same hurdles as the U.S., including infrastructure and regulations, but so far surveys show a greater willingness among the public to use autonomous vehicles there than in the U.S.
In China, surveys show a greater willingness among the public to use autonomous vehicles than in the U.S.
A new report from the Brookings Center for Technology Innovation outlines the benefits and hurdles for autonomous vehicles globally, with a comprehensive look at what is occurring in China. The report’s author, Darrell M. West, points out why China is poised for a revolution in transportation because of self-driving cars, but also highlights a list of challenges for Beijing, industry, and the overall public. The country has certainly embraced the technology, which will bring a host of benefits, similar to what is expected here in the U.S. The need for clarity on regulation from the national government is one major hindrance, however, while restrictions on on-road testing, lagging developments for road mapping, questions over liability, and the lack of technical standards also bring potential obstacles. Just like in the U.S., Europe, and Japan, it’s unknown when autonomous vehicles will be available in China, but milestones are happening at a rapid pace in China and we could see more drastic advancements before the end of the decade.
China’s public gives autonomy a thumbs up
In the U.S., advocates of self-driving technology recently received a big wake-up call when polls showed that a majority of the general public are skeptical of autonomous vehicles, with a fair amount expressing almost vehement opposition. By contrast, in China, drivers are more open to the new type of cars. For instance, as the Brookings report shows, some 75 percent say they are open to riding in a driverless vehicle, according to survey from the World Economic Forum. An astounding 96 percent would already consider using an autonomous vehicle for everyday driving.
Congestion is a big problem in China’s urban areas, just as it is numerous other cities globally. And it could get worse—last year, the country had 126 million vehicles on the road, up 15 percent from 2014.
There are a number of reasons why driverless technology is attractive for the Chinese. For one, the number of traffic deaths, like the in the U.S., is high, totaling more than a quarter of a million per year in China. Safety is the biggest benefit from autonomy given that human error is cited as the main reason for accidents. Secondly, the number of senior citizens is expected to rise sharply in the coming decades. Penetration of autonomous vehicles in the fleet would give this segment of the population increased access to mobility. Thirdly, e-commerce has taken off, growing by 33 percent year-on-year in 2015, because the Chinese, like Americans, are purchasing more products online and having their goods shipped to their homes. This means an efficient movement of goods, which can be buoyed by autonomy in trucking, is vital for both consumers and the overall economy. Next, the Chinese are very positive about utilizing shared vehicles, perhaps even more so than Americans. West points out in the Brookings report that Didi Chuxing, the top ride-sharing service in the world, is valued at a massive $35 billion and operates in 400 different cities, with drivers making 14 million trips per day. Slightly more than half of the Chinese would prefer to use an automated taxi than buy a new vehicle, versus just a quarter of Americans, West notes. Lastly, congestion is a big problem in China’s urban areas, just as it is numerous other cities globally. And it could get worse—last year, the country had 126 million vehicles on the road, up 15 percent from 2014. Total oil demand in the country is forecast, based on the U.S. Energy Information Administration (EIA), to rise by 1.7 percent annually from now until 2040, increasing by a total of 5 million barrels per day during that timeframe.
Industry presses forward
The car industry is moving forward at a quick pace in China. Perhaps the most important company in this space is Baidu, the country’s equivalent of Google. The Chinese tech company says that it will soon start testing in certain cities and sees commercialization in just three years. Other Chinese companies are also moving forward. Chongqing Changan Automobile Co., which is Ford Motor Co.’s partner in China, completed a 1,200-mile test trip with a self-driving car this year. Nissan, the top Japanese auto dealer in China, has partnered with the China Automotive Technology and Research Center to improve safety features, while Great Wall Motor Co., along with others, set up centers in Japan and other countries to give support to their tech ambitions.
Many critics may be skeptical of how quickly China will advance with autonomous vehicles given that its auto industry has severely lagged others over the past century. But in tech, it can rival the U.S.
Many critics may be skeptical of how quickly China will advance with autonomous vehicles given that its auto industry has severely lagged others over the past century. But in tech, it can rival the U.S. West quoted Jin Wang, a top official in the company’s autonomous driving unit, as saying: “With electric cars, with intelligent cars, the core technology shifts from the engine and gearbox to artificial intelligence and that’s an area where China is very close to the U.S., giving China the chance to catch up and seize leadership.”
A list of obstacles
It’s not surprising that the new technology faces a number of challenges in China, even though in some ways it may move quicker than in the U.S. Beijing needs to put in place a national regulatory framework for autonomous vehicles. The country has a “top-down” governmental system, so it won’t have to deal with a messy 50-state “patchwork” of regulations that may emerge in the U.S. However, China does have to contend with different ministries in different areas overseeing automated driving, which could spur confusion and turf wars. Moreover, China does not allow on-road testing of autonomous vehicles, a hurdle that could hinder their development and penetration into the car fleet. The country is also behind in road-map development because of certain government restrictions. Self-driving cars need up-to-date maps in order to operate efficiently and safely. With China lagging in this area, it could obstruct carmakers and software designers.
Beijing needs to put in place a national regulatory framework for autonomous vehicles.
One other big problem is infrastructure. According to the World Economic Forum’s index, China is currently 48th in the world in infrastructure (the U.S. is 14th). West cited Cao He, an analyst at Minzu Securities in Beijing, who noted: “Given the wide diversity of road conditions from one place to another, it is unlikely for any company to come up with a sizable industry operation within five years.” Well-maintained infrastructure is vital for self-driving cars to succeed. With crumbling signage, bridges, roads, and lane markings, there’s a higher chances of accidents or algorithms making the wrong decision. “The central government needs to invest in research and infrastructure development that aids autonomous vehicles,” West wrote. “Having resources that make it clear this sector is a priority is important for the future of the industry.”
The importance of autonomy
The public’s support gives Chinese industry a boost over its American counterparts, but it remains to be seen if the public’s will can overcome major physical obstacles such as the lack of digital mapping and infrastructure.
“Between now and 2021, driverless cars will move into the marketplace and usher in a novel period,” said West at the beginning of his paper. Citing the World Economic Forum, he says that autonomous vehicles will add some $67 billion in value for the auto industry and also bring about some $3.1 trillion in benefits for society. China is one place that is poised to benefit greatly from the new technology, particularly since it’s forecast to see oil demand continuing to rise in coming decades. With self-driving cars expected to be lighter and also expand the electrical car fleet, oil demand could be curbed, perhaps significantly. The public’s support gives Chinese industry a boost over its American counterparts, but it remains to be seen if the public’s will can overcome major physical obstacles such as the lack of digital mapping and infrastructure.