China Aims to Dominate AI Driving

"GUANGZHOU, China -- With electric vehicles, China sped past the rest of the world. Now, it is looking to repeat the feat with autonomous driving.

Competition is intensifying in driver-assistance software -- one pathway to full autonomous driving -- among startups such as XPeng and national technology champions including Huawei. To speed up innovation and drive down costs, they are using artificial-intelligence techniques to mimic human driving patterns and navigate cars through many traffic situations, although the latest models still require a human driver to stay alert and at times take control of the car.

The Chinese technology isn't yet widely available in the U.S., but American scrutiny is growing. The Biden administration is probing whether connected vehicles loaded with Chinese software to monitor drivers and connect to networks pose a risk to national security.

Dominating these technologies is important for China if it hopes to realize its ambitions of becoming a global automotive power, challenging the West and Japan.

Compared with the U.S., where Tesla has been at the forefront of driver-assistance technology in cars sold to consumers, China offers some advantages for companies that could accelerate progress.

About half of new cars sold in the country are electric vehicles or plug-in hybrids. Advanced driving technology consumes electricity because of the sophisticated computers on board making split-second calculations, and electrified vehicles provide a more-stable power supply than lead-acid batteries in gasoline-powered cars, industry analysts say.

And China's tech-savvy consumers, many of them relatively new to driving, are more open to ceding vehicle controls to a computer. In a survey last year by PwC, 85% of Chinese consumers said they were comfortable with autonomous driving that doesn't require human action or supervision compared with 39% of American consumers.

Companies are looking at both driving-assistance systems in consumer cars and robotaxis as steps toward full self-driving. Ministries in Beijing and local governments have been introducing guidelines aimed at developing the self-driving car industry.

Michael Dunne, who runs his own automotive consulting firm, said local governments were eager to help companies try out the technology. "The China ecosystem is designed to accelerate the commercialization of autonomous driving," he said.

Tesla has served as an inspiration to China's EV industry, from its minimalist interiors to its direct-sales model. It is now doing the same for driver-assistance technology, although this time, Tesla's latest technology isn't yet available in China. Tesla said on Sept. 5 that it aimed to introduce the technology in China in the first quarter of 2025.

Tesla and the Chinese companies are focusing on AI-powered driver-assistance technology that can respond to new roads and scenarios instead of relying on high-definition maps and preset rules written by engineers. This technology is called an end-to-end system because it uses a single AI model to absorb input from sensors and decide how to drive rather than splitting the tasks among separate programs.

The system is trained on data including videos of cars driven by humans, which allows it to simulate how people drive. In theory, that allows the system to spontaneously respond to new roads and scenarios, though many in the industry say safety challenges remain, especially in uncommon driving situations.

With a stream of announcements that recall China's rush into EVs a few years ago, the nation's top carmakers and technology companies are stepping up plans for end-to-end AI driving.

XPeng, one of China's biggest EV startups, introduced its version in May. BYD, the country's biggest carmaker by vehicle sales, is working with Huawei, the telecommunications and smartphone company targeted by U.S. sanctions. BYD's first car using end-to-end driving software, an off-road sport-utility vehicle, is set to go on sale this year. NIO, another EV startup, has announced similar plans.

In the first quarter of 2024, more than half of the cars sold in China were equipped with Level 2 and Level 2+ driving-assistance systems, according to research firm Canalys. Level 2 technology can handle steering, acceleration and braking under certain conditions while the driver stays ready to take over.

XPeng says its system has been tested on 4 million miles of Chinese roads and can be used nationwide in contrast to its earlier driver-assistance program, which was limited to a handful of cities with high-definition maps. A new car with the system will cost as little as $22,000.

On a test ride recently in Guangzhou, the driver -- an XPeng employee -- took control several times on the 10-mile route through crowded urban roads and some quieter side streets. At one point, the car, trying to make a left turn, kept inching forward while there was a red light for left turns until the driver took over.

A XPeng spokeswoman said the car was still within the waiting area for left-turning vehicles when the driver took over.

For the most part, the car drove without human intervention, hitting a top speed of about 45 mph. The braking and turning were smooth. "It's not meant to replace human beings. It is meant to help the driver" by relieving fatigue, said Liyun Li, who heads XPeng's autonomous driving center.

Li said XPeng was spending around $500 million a year on AI computing and talent recruitment, or about two-thirds of its research-and-development budget.

American consumers aren't likely to experience any of the Chinese technology for now because of prohibitive tariffs placed on Chinese EVs.

XPeng said it hoped to bring its driver-assistance software to other overseas markets.

U.S. restrictions on China's access to advanced chips pose a challenge for China's auto industry. While the U.S. doesn't currently bar the export of Nvidia's Orin series and certain Qualcomm chips that are widely used inside Chinese vehicles, that could change.

However, China's chip industry is growing. Both XPeng and NIO have designed their own chips, as Tesla already does." [1]

1. Business News: China Aims to Dominate AI Driving. Kubota, Yoko.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 Sep 2024: B.5.