Cruise Automation, the Autonomous Vehicle (AV) division of General Motors (GM), unveiled an ambitious new vehicle 'Origin' earlier this week. The futuristic electric vehicle Origin seats six passengers and lacks a steering wheel.

Origin resembles a box with slightly curvy ends. Both ends look almost identical, except one end has red lights, and the other has white lights. These are split sliding doors in the middle – like those on a subway train. On top of the AV, you can see some of the sensors it uses to navigate to the destination.

Cruise Origins will be summoned through an app just like with a ride-sharing service. The company says that customers will get a consistently clean and safe vehicle every time and at all hours of the day. They also say that when the Origin goes online in San Francisco, a user could save as much as $5,000 a year compared with owning a car or using a ride-sharing service.

However, it is still unset when the Origin will hit the roads due to regulations and safety issues. Kyle Vogt, Cruise's co-founder, said unveiling the car could help speed up conversations with regulators. "Seeing the vehicles in the flesh makes it easier to have these conversations because it's a little bit less abstract," he said.

Another issue blocking Origin's way is technology. Cruise must get its vehicles to the point where their sensors and software can navigate city roads, with all their complicated, unpredictable situations.

Regarding these obstacles, the Chinese AV market and its' startups have the upper hand, compared to their Western counterparts, due to several reasons.

First, Chinese AV companies, such as WeRide, Baidu, and Pony.ai, have explicit support from the Chinese government. The state wants AV companies to succeed and is willing to use its power to build infrastructure, promote new technology, and rewrite policy.

According to state media, it will spend up to USD 220 billion on 5G by 2025 and plans to install av infrastructure throughout the 2020s - including telecoms networks to capture data from vehicles and their surroundings, cloud-computing capacity to process these data and map services to guide the cars.

Second, Chinese firms are faster at making roads suitable for their AVs. They are transforming the urban space by installing sensors to guide cars, writing, and enforcing rules about how humans move around. They are turning the streets into something that software can handle to compensate for the absence of driving software that can handle chaotic city streets.

In addition, Chinese consumers are more open to trying AVs compared to the consumers in the US and EU.

Lastly, putting AVs on the roads also requires tech support from companies beyond AV makers. Mobile-network operators, such as China Mobile, and telecoms-equipment manufacturers like Huawei, are building technology into their systems, which may help cars along the road.

Domestic competition makes the road bumpy for China's AV makers.

Compared to western AV makers, China has an advantage in overcoming these obstacles, but the competition in the domestic market might be a challenging one for AV makers to make a profit.

Currently, Baidu (NASDAQ: BIDU), Tencent (HKG: 0700) and Ali Baba (HKG: 9988) are all investing in the AV market, along with other companies, such as Caocao and Waymo.

Baidu

Baidu began to research and development in autonomous driving in 2013, and since 2017 Baidu has been working on creating its own open-source autonomous driving system, Apollo. The company also believes the creation of the high-definition maps needed for autonomous driving systems to work properly will be a “much bigger business” in the long run.

Apollo has a great chance to become the leader in China's self-driving technology, given that it leads in total test miles driven among mainland companies. Driver data from road testing is critical for developing autonomous driving tech.

Tencent

Although Tencent is most associated with gaming and its gamified  'super-app' WeChat, the company entered the AV market by building a research lab in 2016. It has also been testing its autonomous cars on the road with human backup drivers.

Recently Tencent has also partnered with BMW to provide cloud IT architecture and tools to help support BMW's automated driving R&D. Cloud computing is another crucial component of AV functionality due to the need to process the vast data that will enable cars to navigate safely.

Alibaba

In 2018 Alibaba confirmed that it had completed self-driving vehicle tests. Like Tencent, Alibaba's cloud division will likely benefit from the increased processing power needed from the increasing number of AVs. Besides, Alibaba also has its own market-leading mapping division, AutoNavi, which it acquired for USD 1.5 billion in 2014. AutoNavi has dedicated resources to building HD maps.

Of the existing companies in the AV market, Baidu seems to be the leader. Still, Alibaba and Tencent – and other car manufacturers like Caocao and Waymo – have the resources and the determination to narrow the gap.