China's Robocars Are Being Lapped By Their U.S. Competitors

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The autonomous Lincoln MKZ started turning left at a Beijing intersection when a speeding truck aggressively cut in front of it. Sensors in the car detected the approach and instantly froze it in place.

But that put the Lincoln directly in the truck’s path, so Baidu Inc. engineer Sun Lei grabbed the steering wheel, spun it to the right and floored the accelerator to get out of harm’s way. The truck zoomed by as Sun’s colleague in the passenger seat calmly took notes on a tablet computer –- just another learning exercise for the self-driving fleet being tested around the nation.

“We hope to see more interventions during the road tests so that we can improve our technology,’’ said Calvin Shang, general manager of strategy and operations for Baidu’s Intelligent Driving Group. “It won’t help if you only run the cars on simple routes even for 10,000 or even 100 million miles.’’

Though disaster was averted, the incident shows how China’s push into autonomous vehicles is barely out of first gear, with only a handful of cities allowing limited trials by search-engine giant Baidu, startup Pony.ai, trucker TuSimple Inc. and others since last year. Domestic and foreign testers are putting cars, buses, trucks and delivery vans through self-driving trials to teach them how to navigate the notoriously congested streets of the world’s biggest auto market.

The nation is getting a late start in the burgeoning field, considering California has allowed public-road testing since at least September 2014. That’s enabling U.S. developers to lap their China counterparts, with Alphabet Inc.’s Waymo LLC logging millions of cumulative test miles in that state alone. But China’s chaotic traffic has the potential to boost the self-driving industry’s capabilities beyond those of the U.S.

“The U.S. is ahead right now,’’ said Bill Russo, chief executive officer of Shanghai-based consultancy Automobility Ltd. “But China will soon make significant strides, and I am fully confident that by 2030 it will be a different game.’’

The Chinese government set next year as the target date for large-scale adoption of early-stage AVs, and it wants 10 percent of all new vehicles sold by 2030 to be fully autonomous -— meaning hands-off driving.

The stakes are high. China’s market for smart and internet-connected vehicles will generate 100 billion yuan ($15 billion) in revenue by next year, the government forecasts. The technology is core to the “Made in China 2025’’ plan that’s central to the U.S.-China trade war.

Yet China’s approach to self-driving cars has been considerably more conservative than with electric vehicles, an industry where it’s the global leader in sales.

China is so behind it ranks 20th of 25 countries in a KPMG index measuring their level of preparedness for autonomous vehicles. The Netherlands ranks first and the U.S. fourth.

There aren’t any national U.S. regulations, but 41 states support autonomous-vehicle testing. The leaders include California, Arizona and Florida, according to BloombergNEF. That compares with just 14 Chinese cities allowing public-road testing.

But even after billions of dollars of research and development, the technology for autonomous vehicles is still unproven in the U.S., and none of the early leaders are making money on it.

Waymo only deploys robotaxis in one suburb of Phoenix, Uber Technologies Inc. has spent more than $1 billion without clear plans to launch a service, and Elon Musk recently said Tesla Inc.’s technology would lead to 1 million vehicles on the road that are fully capable of self-driving –- a claim met with skepticism.

In China, the national government sets minimum guidelines for testing, and local authorities can augment those while issuing permits. Cities started issuing permits in March 2018, when Shanghai gave SAIC Motor Corp. access to remote suburban streets.

By comparison, California had issued permits to 63 companies as of February 2019. They include Tesla, Volkswagen AG, Toyota Motor Corp. – and 15 China-based testers developing algorithms and honing software and sensors.