Weekly Brief: China on Song with AV Advancement as US Dithers

Germany was the first country to legalize self-driving cars, the United States was the first to commercialize them but China may be the first to take them mainstream.

Last week Chinese internet giant Baidu revealed that it’s poised to ramp up its robo-taxi presence across the country. The company unveiled its all new electric robo-taxi, the Apollo Moon, which Baidu will jointly manufacture with Chinese carmaker BAIC. The Apollo Moon combines the body of BAIC’s luxury EV brand Arcfox with the brains of Baidu’s Apollo self-driving technology. Baidu says it can be mass-produced with a per unit manufacturing price of $75,000.

That’s one third the cost of an average Level 4 autonomous vehicle. Baidu believes the difference in price is a monumental milestone for achieving large-scale commercialization of robo-taxis. Baidu and BAIC have committed to build 1000 Apollo Moons in the next three years. Baidu already has its robo-taxi service, Apollo Go, up and running in Beijing, Shanghai, Guangzhou, and Chongqing. As of last month, it started charging passengers for rides in select robo-taxis in Beijing.

To date, the Chinese government has been fully supportive of Baidu’s efforts to deploy robo-taxis and the same is true with Baidu’s main rival in the self-driving arena, Chinese ride-hailing company Didi Chuxing. That will probably mean the difference between how quickly robo-taxi services scale in China versus the US, where the technology is arguably more advanced and better tested but where the federal government continues to dither around on its position for self-driving technology.

Last week the US Senate balked at an opportunity to legalize self-driving technology on public roads. Republican senator John Thune introduced a bid to ease regulations on autonomous vehicles so that certain self-driving cars could drive on public roads if they meet set criteria set forth by the National Highway Traffic Safety Administration. The US Senate Commerce Committee rejected the bid.

“It seems like every other week, we’re hearing about a new vehicle that crashed when it was on Autopilot,” said Maria Cantwell, who chairs the Commerce Committee. Cantwell was referring to Tesla Autopilot, which has led to a number of accidents owing to drivers treating their cars as capable of full autonomy when Autopilot is, in fact, nothing more than some glossy lipstick on your standard semi-autonomous driver assistance system. Last week there was another accident in the news, although this time it wasn’t Autopilot to blame. It was one of Waymo’s self-driving cars, newly deployed to the streets of San Francisco, where it smacked into a scooter rider and laid him down in the street. The visuals were terrible for Waymo. The saving grace was that the vehicle wasn’t in autonomous mode when the accident happened. It was just a Waymo driver in manual mode on his way back to the office.

You can see Cantwell’s point and her reluctance to advance the federal government’s support. The flip side is that some states, like Arizona and California, are permitting self-driving cars on public roads in spite of the federal government’s waffling and carmakers and tech companies continue to invest in the technology. Last week General Motors announced that it will increase the $20Bn that it had planned to spend on self-driving cars and electric vehicles to $35Bn by 2025.

The focus of the spending will be on GM’s Cruise technology so that it can take self-driving cars mainstream more quickly, and on EV technology, in a bid to surpass Tesla as the EV leader in America. The federal government’s indecisiveness isn’t going to change GM’s mind. The technology is coming one way or another. How broadly it gets deployed, however, and with what level of federal oversight, is still very much up for grabs. The greater the dysfunction between states and federal government, the more likely top talent is to look elsewhere for favorable environments. That is music to China’s ears.

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