Shenzhen accelerates China’s driverless car dreams

SHENZHEN, China, Aug 1 (Reuters) – On a busy downtown street, three delivery bikes suddenly hurtle across the pedestrian crossing in front of the car. On the car’s dashboard, they look like little 3D blue blocks from a 1990s video game.

The steering wheel turns itself a notch and the vehicle slows to a quiet stop, while the safety driver watches from the passenger seat.

The vehicle is one of a hundred sensor-laden robotic axes belonging to startup DeepRoute.ai cruising the dense Futian central business district in China’s southern tech hub Shenzhen, giving 50,000 test rides to passengers in the past year.

While the US is considered to be taking an early lead in testing autonomous vehicle (AV) technology, the industry in Shenzhen appears to be shifting gears, with test robot axes quickly becoming a common sight.

Baidu Inc’s Apollo unit, Toyota Motor Corp-backed Pony, Nissan-backed Weride, Alibaba-backed Auto X and Deeproute have all attempted to navigate the city’s difficult environment, with frequent jaywalkers and ubiquitous e-scooters.

Shenzhen, a city of 18 million, has now brought in China’s clearest AV regulations. From Monday, registered AVs will be allowed to operate without a driver in the driver’s seat over a wide section of the city, but a driver must still be present in the vehicle.

So far, Chinese cities have allowed robot axes to operate on a more limited basis with permission from local authorities, but Shenzhen’s regulations provide for the first time a decisive framework for liability in the event of an accident.

If the AV has a driver behind the wheel, the driver will be liable in an accident. If the car is completely driverless, the owner of the vehicle is responsible. If a defect causes an accident, the car owner can seek compensation from the manufacturer.

“If you want more cars, eventually there will be accidents, so these regulations are very important for mass deployment,” said Maxwell Zhou, DeepRoute’s chief executive, speaking at the company’s offices in a technology park near the Hong Kong border.

“This is not true driverless, but it is a big milestone.”

GEAR CHANGE

So far, the U.S. has driven ahead in AV trials, with California green-lighting public road tests from 2014, allowing Alphabet Inc’s Waymo LLC, Cruise and Tesla to rack up millions of miles in road tests.

But China has its foot on the gas pedal, and Beijing is making AV a key area in its latest five-year plan. Shenzhen wants the smart car industry to reach a turnover of 200 billion yuan by 2025.

Last May, cruise chief Dan Amann warned President Joe Biden that US security regulations risked the country’s AV industry falling behind China, with the latter’s “top-down, centralized approach”.

Deeproute aims to have 1,000 robot axes with safety drivers on Shenzhen’s roads in the next few years, when more detailed regulations are expected.

But in a city with a state-owned fleet of 22,000 electric taxis from Shenzhen-based BYD, where a 20-km (12-mile) trip costs about 60 yuan ($9), the production costs of AVs will have to come down before the robot axis is commercially viable , Zhou said.

Deeproute and other robotaxi companies are betting on mass production to reduce costs and collect data. Deeproute sells its driving solutions to car brands for around 3,000 dollars.

Zhou sees Shenzhen’s DJI Technology Co as a role model, with the company using lower hardware costs and integrated supply chains to make it the dominant player in the commercial drone space worldwide.

On July 21, Baidu announced a new AV with detachable steering wheel it will use for robot axis next year, at 250,000 yuan per unit, almost half the price of the previous generation.

“We are moving towards a future where taking a robot taxi will be half the cost of taking a taxi today,” Baidu CEO Robin Li said at the Baidu World conference.

FROGS IN A WELL

Shenzhen’s supply chain and lower costs give it a big manufacturing advantage over Silicon Valley, but AV solutions maker David Chang doesn’t want to be limited to one market.

“In Shenzhen, the capital cost is one-third that of California, because we have the battery suppliers, we have the sensors, we have most of the integration,” said the CEO and founder of Shenzhen-based Whale Dynamic.

“But the revenue is one-twelfth that of California, so it might not be a fancy business to do,” he said.

Deeproute, Weride and Pony.ai also have offices in Silicon Valley, with R&D teams and testing in both locations.

“We don’t want to shrink into a well and fight with other frogs. We want to jump out of that well,” Chang said.

($1 = 6.7433 Chinese Yuan Renminbi)

(This story is refiled to correct spelling in section 4 for views (not website))

Reporting by David Kirton; Editing by Michael Perry

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