Why China won’t lead in Enterprise Focused Autonomous Drive

by Nicole on November 22, 2017

China has an opportunity to set the standard for Autonomous Drive. China is the world’s largest market for automotive and with their ability to dictate legislation their decision could easily sway the market.

One of the biggest hurdles for Self Driving cars is their legal status. The Audi A8 has launched with Level 3 capabilities but they’re turned off in most regions because they have yet to create laws around this new technology.

When it comes to mass market adoption of Autonomous drive we’re going to see it happen in enterprise first. We’re already seeing Semi-autonomous truck convoys rolling out in the UK next year and the cost savings for business make technology adoption relevant.

According to according to data from the China Association of Automobile Manufacturers commercial vehicle sales surged 22.9 percent in Q1 of 2017.

To me, this seems like the perfect storm where you could couple market demand with an emerging technology and ride a wave of success to self-driving global domination.

This is course if we overlook the corruption of the Chinese government, the fact they’ll favor local players and the possibility that making a move now might be entering the market early.

Those reservations aside and knowing that regardless of its challenges China is a number one priority for every top tier automotive maker. With this in mind, I was interested to learn what Daimler’s plans were for enterprise autonomous drive solutions in China.

Christan Ballarin Head of Development and Operations for Daimler’s Commercial Vehicles didn’t agree that China was a geography to watch in terms of autonomous drive leadership.

If you look at the reasons for the adoption of autonomous in enterprise replacing the driver is one of the main catalysts. The wages in China are still too low for Autonomous drive to be a real consideration.

When we look at where Autonomous drive will be adopted first developed countries will be first. It makes sense the roads are less crazy and the infrastructure is more mature. If you’ve driven in China recently you’ll know there are a lot more variables at play on the road than you might find in Europe.

Daimler is focusing on R&D closer to home, they have a large center in Sunnyvale and of course in Stuttgart, Germany. California is still a magnet for global startups to pedal their innovation wares, and automotive is no exception. In an interesting twist, Daimler is engaging with Chinese startups but it’s not through their R&D center in Beijing but rather in California. Startups are drawn to California for its abundance of venture capital and its high concentration of talent, it shouldn’t come as a surprise that many global startups and corporations end up opening a foreign office in the sunshine state.

If we keep looking at Asia as an area that could be on the forefront of Autonomous drive, Singapore immediately comes to mind.

A progressive government with a forward-thinking attitude towards automotive. There will be no new cars on the road by 2020. The country also has a very relaxed view on legislation when it comes to fostering industry. They have a wait and see attitude, only when it becomes an issue will they enact law.

Turns out, when it comes to enterprise, rolling out test programs of the technology would be interesting, but the market is too small and with fewer cars on the streets it’s going to become an even smaller market. Singapore would only be interesting to run pilot projects.

However, when compared to other autonomous zones, like the new one in Arizona, the South East Asian market surrounding Singapore has tremendous potential but the US is a more mature market. Singapore is also very far from their R&D centers in California or Stuttgart.

The automotive industry has decreased the amount of time it takes to design a new vehicle and has increased the speed at which they react to trends like eMobility. But even if they tripled their speed of innovation it wouldn’t come close to how quickly industries evolve in China. The relationship between Apple and Foxconn is changing and the OEM struggling to find independence is the signal for the end of an era.

This western focused strategy for Autonomous Drive in Commercial vehicles works today, but with the dynamics in Asia changing so quickly, I hope to hear of a pivot in focus soon.