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Autonomous vehicles
OpinionComment
Rami Blachman
Rami Blachman

Opinion | Why the road to making driverless cars passes through US and Israel for Chinese mobility companies

  • One way Chinese AV champions obtain know-how is by deploying R&D centres in Silicon Valley, where AV technology still reigns supreme
  • China’s trailblazing AV companies are driven by the challenge of producing the next generation driverless vehicles and scaling globally

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An autonomous car refitted by Pony.ai seen driving itself outside the venue of WAIC (World Artificial Intelligence Conference). Photo: Handout
Rami Blachman
China could see autonomous vehicles (AV) account for as much as 66 per cent of the passenger-kilometres travelled in the country by 2040, generating market revenue of US$2 trillion, according to McKinsey. 

China’s policymakers see the AV industry as a pillar that is crucially important in the country’s plan to transform its economy from traditional manufacturing to a leader in artificial intelligence (AI) by 2030.

But the road to making driverless cars a reality is long and winding. Many of China’s finest entrepreneurs admit that the country does not currently have the talent for the research and engineering needed to put all of the pieces of autonomous driving in place.

The magnitude of the effort to bridge the yawning gaps is forcing Chinese tech incumbents and upstarts alike to creatively seek know-how and “smart capital” primarily in the US and Israel, which they do by taking a variety of steps.

One way Chinese AV champions obtain know-how is by deploying R&D centres in Silicon Valley, where AV technology still reigns supreme. Another tactic pursued by Chinese carmakers and Tier-1 suppliers that supply parts and systems directly to the carmakers is to align with Israeli and American start-ups that build the eyes, brains, and connectivity for driverless cars.

Surprisingly, cross-border VC activity between the US and China – and specifically US investor participation in financing rounds in China-based companies – peaked in 2018 despite the trade war. The figures tell a striking story of the rising appetite of Chinese companies for US capital and the additional value it brings.

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