China ready to wager 2 trillion dollars on self-driving vehicles
According to a research published by McKinsey, in the next few years China will be the main market for self-driving vehicles, especially in passenger transport services, which could account for 55% of the total market by 2040.
Andrea Pitozzi • Contributor / Wired.it
China represents one of the most interesting and potentially rich markets for the future of the sector, especially as far as autonomous vehicles. The People's Republic of China, in fact, invested over 21.7 billion euro in 2017 on electric mobility, allocating credits for the production of electric vehicles equal to about 10% of the total market in 2019 and 12% in 2020. We can safely say, then, that the Asian country seems destined to play a leading role in the future of self-driving vehicles.
According to a recent study published by McKinsey & Company, total revenues in the sector could amount to as much as thousands of billions of dollars, with large investments in several growing segments such as, for example, passenger mobility services (robo-taxi), which could peak at 62%, private car rentals (51%) and private cars for the market (38%).
According to the data, however, technologies applied to autonomous driving will find their main application in passenger transport services, in an attempt to reduce labour costs and maximize working time. For example, autonomous driving technologies are expected to grow 69% in city buses and 67% in commercial vehicles.
Such a trend could become evident already in the next 9/10 years. Furthermore, according to the research data, by 2040 it is estimated that 66% of the total number of passengers might choose a self-driving vehicle, 11% of which as private vehicles and as many as 55% used in public transport.
This could produce a turnover of more than 1.1 trillion dollars for passenger transport vehicles and 900 billion dollars for the private sector, for a total of two trillion dollars, which means that self-driving cars could account for as much as 40% of total sales by 2040.
In China the spread of autonomous vehicles could start gradually as early as 2023, according to the research, and peak already in 2032, with a strong penetration of the market and profit margins of more than 60 billion dollars compared to the current value. However, several issues are still unresolved, such as, the poor condition of road signs and a woeful scarcity of suitable infrastructures in the country.
Finally, to ensure the full development and diffusion of these vehicles, the Beijing government has already adopted measures to facilitate investment in the sector and create the necessary technological knowhow, as well as dedicated testing areas for autonomous vehicles such as Jiading in Shanghai and Xiong'an outside Beijing.
Additionally, in an effort to promote a large-scale production of autonomous vehicles in China, commercial partnerships are already being formed with some the most important Chinese hi-tech companies. Last year alone, for example, companies working in the production of autonomous vehicles received over 7 billion dollars in funding, and giants such as Alibaba, Baidu and Tencent have decided to invest in this promising sector (Baidu and Tencent in collaboration with Nio, while Alibaba with Xpeng).