China’s national plan to democratize self-driving cars collides to legal obstacles. Indeed, the efforts made by the China to put more and more autonomous vehicles on the roads seem to be bogged down in a “ growing uncertainty about near-term profitability potential “.
What prospects for autonomous vehicles?
As reminded Asian Nikkei, at the national level, the course of action is clear. In 2020, the government published a roadmap in which priority is given to autonomous vehicles, with the objective of achieving the threshold of 20% of new vehicles soldwith Tier 4 capabilities, by 2030. Many analysts are beginning to seriously doubt this figure and speak instead of a realistic 3% target.
Indeed, regulatory issues and worries about profits in the sector have cooled investors, which is enough to push start-ups to revise their plans. For Owen Chen of S&P Global Mobility, “ China has not developed the proper legal framework for self-driving technologies, and even if such framework is in place, business development will take time “.
Chinese companies specializing in autonomous vehicles are pessimistic. The start-up Pony.ai, which operates 100 self-driving taxis in Nansha district in Guangzhou is being restructured. The company says it will be difficult for it to make short term profits. Same thing on the side of Baidu, yet a leader in the sector. The Chinese giant said its self-driving business “ did not contribute significantly to sales “.
With the outlook for short-term earnings increasingly bleak, investments fell sharply. In 2022, 3 billion dollars have been invested in companies in the sector. It is 5 times month compared to 2021. Among the major difficulties faced by companies is the fact that the rules for autonomous driving are set by local governments, without any framework at the national level.
Another negative point is that autonomous vehicles are expensive: approximately 500,000 yuan, i.e. 5 times the price of a standard vehicle. The uncertain profit outlook prompted some companies to change course.
