China Backs Firm Tie-Ups in Smart Vehicle Domination Drive

China has encouraged its smart vehicle firms to join forces, promising to back them in a bid to become world leaders in the sector, state media said on Monday.

The world’s largest auto market has made so-called intelligent connected vehicles (ICVs) a long-term strategic focus, and Beijing says it will support firms forming “innovation consortia” to find technological breakthroughs and dominate the market, the official Xinhua news agency said.

Citing Xin Guobin, vice-minister of industry and information technology, also said that China is racing to hammer out industry-wide standards for assisted and autonomous driving functions by 2025.

While level 1 is the least intelligent or automated of China’s five categories of autonomous driving, official data shows that in the first half of 2023, just over 42% of the country’s new passenger vehicles had already attained level 2.

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Vehicles in this category can handle driving functions but the driver must always be prepared to take over when road conditions change.

As China pushes ahead with level 3 automation, in which a vehicle can drive by itself under certain conditions, Baidu’s Apollo Go is taking the lead.

The firm won a licence in June to run its driverless ride-hailing service commercially in parts of the city of Shenzhen.

That makes the tech hub China’s fourth city to offer such a service, following the central city of Wuhan, southwestern Chongqing and the capital, Beijing.

China aims to master the core technologies of advanced autonomous driving and eventually put driverless vehicles on its roads in the effort to become the leading industry player worldwide.

But the likes of Baidu and other Chinese developers face geopolitical headwinds as the United States puts export curbs on technology, in addition to stiff competition from Western counterparts, such as Tesla, in improving technology.

Reuters with additional editing by Sean O’Meara

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.