The bright future anticipated for years for autonomous vehicles increasingly appears to be becoming a reality. Related revenue is forecast to grow from $24 billion in 2019 by 18.1% annually through 2025, according to a report earlier this year by Mordor Intelligence.

China, which boasts the world’s largest automobile market, is likely to emerge as a force in the business, according to speakers at the Forbes China Innovation Summit held in Chengdu on Friday.

Autonomous vehicles use technologies such as LIDAR (light detection and ranging), GPS and computer vision to sense their environment; advanced control systems in cars can track sensory inputs to detect signboards or avoid collision, the Mordor report noted.

Hesai Technology, a China leader in sensors for autonomous vehicles based on LiDAR technology, expects lower overall costs will help drive sales of autonomous vehicles in the coming years, said Wu Jian, leader of the company’s sensor development department, in Chengdu. The Shanghai-headquartered company, whose investors include Lightspeed, Baidu and Bosch, has customers in more than 70 cities in 20 countries. 

Capital will also flow into China’s autonomous vehicle industry because of government support, such as eased listing rules for start-up companies, Vstar Capital managing partner Yu Lifeng said. One such move: the opening of STAR market at the Shanghai Stock Exchange this year, whose rules allow for money-losing business to list.

Roads connecting two of western China’s biggest cities — -Chengdu and Chongqing — offer good prospects for autonomous vehicle-related companies and technology. The 200-plus kilometer distance between the two is appealing for self-driving trucks given currently available technology, said Lou Yuqiang, a vice president at Suzhou Plusgo Auto Technology. The company supplies integration technology for self-driving trucks. 

Neolix, a supplier of mini delivery vehicles for food sales, patrols and delivery, sees promise in urban areas, particularly Chengdu and Chongqing, says vice president Xu Qiyuan. The company is currently working with global food giants such as KFC and Pizza Hut to provide a “restaurant’ on wheels” service.

Although Level 4 and Level 5 autonomous cars are unlikely to reach wide acceptance by 2030, there will be a rapid growth for Level 2 and Level 3 autonomous cars, which have advanced driver assistance systems such as collision detection, lane departure warning, and adaptive cruise control, Mordor said.  Fully autonomous cars are not going to reach a wide customer base, unless they are secure from cyber-attacks, the report said. If such concerns are addressed, the autonomous car market may reach $60 billion, by 2030.

Major automaker companies, technology giants and specialist start-ups have invested more than $50 billion over the past five years in order to develop autonomous vehicle technology, with 70% of the money coming from other than the automotive industry, according to Mordor.

The Forbes China Innovation Summit, held Oct. 29-30, was organized by Forbes China, the Chinese-language edition of Forbes, and the Chengdu Municipal Government. The event attracted 300 attendees and highlighted breakthroughs in innovation strategies involving new technologies such as 5G and blockchain, as well as autonomous vehicles.  

Speakers include executives from Forbes China’s annual list of “50 Most Innovative Companies” unveiled in June, as well as members of an annual “Up and Comers”  list that highlights listed small and medium-sized businesses.  Attending companies include Hundsun, WeBank, LONGi Green Energy Technology, Guangdong Aofei Data Technology, Inspur Group, AK Medical Holdings and Hangzhou Qulian Technology.

China autonomous vehicle businesses cited on the Most Innovative Companies List were Baidu Apollo and Pony.ai.

 —with Joel Li

@rflannerychina @forbes_cn

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