China challenges the west for driverless car supremacy

Since early 2020, Wuhan has been infamous as ground zero for the Covid-19 pandemic. But the central Chinese city might now be on the cusp of global recognition for a different reason: boasting the world’s biggest fleet of cars that drive themselves.

Wuhan is emerging as a key testing centre for the fledgling technologies, critical infrastructure and regulatory landscape underpinning autonomous driving in China.

The progress made by Chinese companies and regulators in Beijing poses a new challenge to the west, which is already lagging behind China in the development of electric vehicles, according to analysts, and now sees the country gaining ground with its driverless efforts.

“It is very hard to measure, but if you look at the readiness of deployment and availability of technology, [China] is probably no more than one or two years behind,” said Raymond Tsang, an automotive technology expert with Bain in Shanghai. “The momentum of closing that gap is pretty strong.”

China started commercial driverless development in 2013, about five years after groups in the US. But as of September last year, autonomous vehicles in China had driven a cumulative total of 70mn kilometres, on a par with the US, according to data from Bain.

In Wuhan, 500 robotaxis, mostly run by Baidu, China’s rival to Google, recorded more than 730,000 ride-hailing trips last year. That compares with combined orders of more than 700,000 last year in Phoenix, San Francisco and Los Angeles, according to Waymo, the self-driving car developer of Google’s parent company Alphabet. Waymo told the Financial Times that it had “a couple of hundred cars” in each of the three fully autonomous zones.

Autonomous vehicle safety has been in the spotlight since early October, when a robotaxi operated by Cruise, the General Motors driverless car division, collided with a pedestrian and then dragged the person 20ft across a San Francisco street.

GM halted the division’s work and regulators are investigating the case. They have questioned the company’s previous disclosures over the limitations of its technology as well as its handling of the incident.

In China, the Wuhan robotaxi project has revealed lingering conservatism over safety fears.

Baidu has trumpeted “fully driverless vehicles” and says that during the trials, there have been no major accidents recorded. But an FT visit to the group’s autonomous driving centre in Beijing in June showed each robotaxi was remotely monitored by a human sitting in an arcade-like driving station ready to intervene. The monitoring is required by regulators.

Waymo refused to provide a specific number for how many people remotely monitor each car deployed. The US group stressed that its fully autonomous cars were “responsible for making every driving decision on the road and do not rely on a human driver, either in the car or remotely”.

“For example, if a Waymo vehicle detects that the road ahead is closed due to construction, it may pull over and request confirmation from our fleet response specialists before taking an alternate route. Our specialists can then confirm that the vehicle correctly perceived the construction zone and communicate the lane closure to the rest of the fleet,” Waymo said.

Ya-Qin Zhang, chair of the Institute for AI Industry Research at Tsinghua University in Beijing, warned that the Chinese government would remain “very, very cautious” until it was confident the vehicles were safe.

“This is about human lives . . . this has to be 10 times safer than human drivers to roll out at a large scale.”

Confidence building

Apart from Wuhan, Baidu and a clutch of domestic rivals, including Pony.ai and AutoX, have established a series of testing zones in cities across China. Many of the country’s EV developers, including the world’s biggest by sales, BYD, also have in-house teams developing advanced driver-assistance systems, a precursor to autonomous driving.

Tu Le, founder of Sino Auto Insights, said the US still led China in several of the technologies underpinning key areas of autonomous driving including machine learning and sensors. “The Chinese have strong leadership teams, but the rank and file will normally not have as much experience as their counterparts in the US.”

However, according to Bain’s Tsang, the scale of the commercial trials means China is tracking towards a “tipping point” of around 2027 for the key technologies to be commercially viable at a large scale.

Bain expects a similar timeframe for completing the legal framework for liability and insurance and improving the accompanying road and telecoms infrastructure.

The ability of companies to tap into cities’ networks of roadside cameras, traffic lights and other inner-city infrastructure, as well as widespread 5G coverage and digital mapping, is already underpinning industry confidence in China.

While such networks have been criticised internationally for enabling mass surveillance by China’s security agencies, the networks give driverless car developers a distinct advantage compared with other jurisdictions, experts said.

Tsinghua’s Zhang said companies leveraging China’s existing hardware and software — “road-level intelligence” — would reduce costs, accelerate deployment and, importantly, make the roads safer.

“In that, China is probably leading the rest of the world,” Zhang said. “Machine learning for safe driving is all about data. More data helps to make better decisions.”

A McKinsey global survey of autonomous vehicle executives, published this month, revealed an industry in a state of flux. Expectations for driverless development have been extended by about two years, to about 2030 for commercially viable robotaxis.

In the US and China, billions of dollars more in investment, mostly in prediction algorithms and perception software, are needed before the industry can demonstrate the technology is safe.

And yet in 2021, the same McKinsey survey showed nearly 60 per cent of industry leaders expected North America to beat China in developing driverless car technology. Now respondents are “evenly split” on the two.

“This is evidence of China’s progress . . . driven by factors such as robust government backing; heightened investments in research and data availability; and a receptive consumer attitude towards adopting new technology,” McKinsey analysts said.

Beijing cautiously backs expansion

Tsinghua’s Zhang, who is also a former Baidu executive and leads the development of the company’s open-source driverless car software, Apollo, is calling for government and industry to push ahead with expanding the Wuhan project to the entire city — today it covers an area occupied by about a quarter of the city’s 10mn people. This expansion would allow the vehicles to learn to operate across all the hazards of urban driving.

“If a car can drive in Wuhan . . . I’m pretty sure it can drive in any other city in the world,” he said. Current Baidu executives declined to be interviewed.

Passengers in Wuhan’s robotaxis sit in the back seat behind a perspex screen that blocks any compulsion to try to take back control of the vehicle. Baidu is also seeking regulatory approval to introduce its next robotaxi iteration with no steering wheel, paving the way for a total interior redesign.

In recent months, Beijing has been taking a more hands-on approach in steering regulation, after previously deferring to local governments for oversight of the robotaxi projects.

In November, guidelines were released for local governments to follow when establishing driverless car pilot projects. That was followed by new safety guidelines in December for the use of autonomous vehicles in public transport.

Beijing is developing nationwide rules to clarify which companies will be liable in the case of an accident. In a further sign of support, the Chinese capital has started road-testing unmanned police patrol vehicles.

The industry’s rise comes during a period of tense US-China relations and a rise in trade barriers, including sweeping controls of American technology sales to China. This threatens to stifle Chinese technology groups, including Baidu, which are still reliant on US computer chips.

At the same time, given China’s strict regime for keeping geospatial and customer data in country, analysts see serious challenges for multinational companies seeking to make inroads in the Chinese driverless car industry.

Tom Nunlist, an expert in Chinese technology regulation with Beijing-based consultancy Trivium, said the increased oversight from Beijing reflected an effort to “balance” safety concerns with a desire not to slow down the pace of technology development unnecessarily.

“China wants to win this race,” he said. “It does want to be out ahead with this technology.”

Additional reporting by Ryan McMorrow in Beijing