In 2009, China passed the United States, becoming the world’s largest and most dynamic automotive market. The continued explosive growth of the automotive market is overtaxing China’s automotive-related infrastructure, resulting in increased traffic congestion and pollution.
Drivers in Beijing spend an average of 1.3 hours in their daily commute, more than three times as much as the average commuter in the United States. The adoption of autonomous vehicles (AVs), especially mobility services such as “robo-taxis,” will offer potential solutions to some of these infrastructure challenges. Shared mobility would reduce the number of vehicles on the road and allow former drivers to work or relax en route. AVs powered by green electricity or hydrogen could also help reduce local vehicle emissions.
However, China’s complex traffic environment, including aggressive driving behaviors and complicated signage, may slow AV adoption. The need to optimize AV decision algorithms for Chinese roads could take more effort and training, possibly adding two to three years to the adoption timeline compared with the United States. This would move mass adoption to post-2027, when technology has addressed the majority of conditions of urban and suburban driving.
AVs could take over most of the automotive market in China, making it the world’s largest AV market. Mass deployment of fully autonomous vehicles in China could happen in the next nine or ten years.
By 2040, AVs could account for as much as 66 percent of the passenger-kilometers traveled, generating market revenue of $1.1 trillion from mobility services and $.9 trillion from sales of AVs by then. That means AVs will make up just over 40 percent of new vehicle sales in 2040 and 12 percent of the vehicle installed base.
To gain a winning position in tomorrow’s AV market requires preparation today. Deferring positioning strategies can rob market players of both influence and degrees of freedom. Automakers, high-tech companies, and mobility services providers competing in China must evaluate their entry strategies carefully, balancing the high risk involved against the potential value of becoming a leader in the largest long-term market for AVs in the world.
Preparing for the Future Today
AV technologies are developing rapidly, making it imperative for companies to understand their impact on day-to-day business and operations for academic, corporate, and government organizations. Coming soon, the IEEE Guide to Autonomous Vehicle Technology is a seven-course program covering the foundational and practical applications of autonomous, connected, and intelligent vehicle technologies. Courses are developed by some of the leading experts in AV technologies. Contact an IEEE Content Specialist today to learn more.
Pizzuto, Luca; Thomas, Christopher; Wang, Arthur; Wu, Ting. (Jan 2019). How China will help fuel the revolution in autonomous vehicles. McKinsey & Company.