New Information and Communication Technologies (ICT), Artificial Intelligence (AI), connectivity technology and solutions, 5G and cloud services are transforming traditional mechanical automobiles towards intelligent connected terminals, leading to the concept of Intelligent Connected Vehicle (ICV). Driven by a new round of scientific and technological revolution, ICVs have become the focus and development direction of the future transportation system.
The fundamental purpose of ICVs is to achieve intelligent information exchange and sharing between vehicles and X (cars, roads, people or clouds etc.) with multi-functions, which involve complex environmental awareness, intelligent decision-making, collaborative control, and execution. ICVs can achieve a new generation of cars to replace people, providing more convenient modes and energy-efficient integrated solutions with a high level of safety, efficiency, and comfort.
In order to achieve safe and sustainable mobility, the automobile industry is transforming towards a low-carbon, information-based, and intelligent era. In the past few years, ICV has become a globally renowned future development direction and focus of attention. All circles of the automotive industry, academia, and research institutes, and governments have focused on the development of ICV, ranging from research and development (R&D) of new technologies to improvement of the top-level design.
Intelligent connected vehicle industry overview and market development
China has become the largest automotive market in the world with a vehicle population of 240 million at the end of 2018, which stimulates Chinese consumers' passion for intelligent and connected vehicles. As one of the first entrants to deploy and implement ICVs on a large scale, China's automotive industry is poised and determined to accelerate the intelligent and connected transition. The national strategic deployment and explosive automotive demand present continuous driving forces and improvement opportunities for ICVs development. With the increasing strength of advanced information and technology industries, it is expected that the Chinese automotive industry will grasp the opportunity of ICV to catch up with and outperform its foreign counterparts.
Drivers of the development of ICVs in China
The primary characteristic of the digital economy is data-driven industrial transformation. During the period 2015-2020, the Chinese government frequently promulgated relevant policies on the digital economy. Catalyzed by multiple policy dividends, the digital economy is setting off a new round of infrastructure construction. As the focus of urban innovation and construction, ICV is considered as the core technology of digital economic development and an important strategy contributing to China's economic transformation and upgrading. The Chinese government is committed to strengthening the top-level design and providing new momentum to the ICV industry in the digital integration era.
Supportive regulatory and policy environment
With the accelerated development of China's automotive industry in the direction of intelligent networks, a supportive policy and regulatory environment are essential. Since the announcement of Made in China 2025 strategy in 2015, a series of relevant policies and documents on the ICV industry has been successively issued with clear development mandates and tasks. Meanwhile, the requirements for the development of demonstration bases are established to conduct pilot demonstrations for the ICV. According to China Manufacturing 2025, ICV is listed as one of the ten key development areas and promoted to the national strategic height as a standard of market behavior, stimulating the healthy and sustainable development of the automobile industry.
To promote the wide deployment of ICVs and their associated infrastructures, the development of relevant policies is the primary driving force for the development of ICV industry. The development of ICV has become a primary concern of the Chinese government. During recent years, the State Council, Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Transport and other relevant departments have issued a series of policies and standards with the main foucs on the development of ICV industry.
Currently, China has proactively launched 20 domestic testing and demonstration zones to boost the development of ICVs . The designation of pilot and demonstration zones is expected to catalyze new applications, technologies, products, and new models of ICVs.
Administrative documents and initiatives in Shenzhen
Shenzhen is the first city in China to formulate the first-of-its-kind legislation in this emerging field. The "Regulations of Shenzhen Special Special Economic Zone Regulations on the administration of Intelligent Networked Vehicles" (hereinafter referred to as the Regulations) came into effect on August 1, 2022. It is the country's first mandate to clarify responsibilities for cars at a minimum of Level 3 autonomous driving. The Shenzhen Municipal People's Congress exercised its special zone's legislative power to promote the local intelligent connected vehicle development, providing a reference standard for autonomous driving-related policies in other cities across the country.
Based in Shenzhen, DeepRoute.ai (Chinese: 元戎启行) is a self-driving technology firm committed to advancing urban logistics and popularizing robotaxis. On the basis of the new regulation, DeepRoute.ai conducted driverless road tests in Shenzhen with vehicles equipped with production-ready L4 solution. Maxwell Zhou, the CEO of the company said " Open road testing and demonstration applications with more complete cooperative vehicle infrastructure throughout the region will allow us to obtain a diverse set of drive test data. The validity and quality of these data will be higher. Moreover, allowing fully unmanned autonomous services demonstrates a rapid advance in its commercialization and a regulatory breakthrough in the domestic market."
This new regulation is considered a major milestone in advancing autonomous driving technology and is deemed the prelude to mass production and commercialization of autonomous driving vehicles. It is reported that autonomous driving start-ups are racing to commercially deploy their fully self-driving vehicles. In this regard, Zhou responded, "our company will mainly focus on the commercialization of autonomous driving, promoting the mass production of autonomous vehicles, and charging the self-driving cabs. For mass production, we are committed to creating 'low-cost' self-driving cars that are ' affordable for everyone by partnering with other car enterprises. Our mass-produced self-driving vehicles are expected to enter the consumer market on a large scale by 2025."
The new era of mobile internet technology, big data, cloud computing, and artificial intelligence has been fundamentally penetrated with the ICV industry. It is widely recognized that embedded connectivity has already uncovered new features and capabilities that are changing the driving experience. As an integral part of the automotive industry's transition, 5G technology, characterized by ultra-low latency, high-speed and IoT-driven design, plays a significant role in altering the way automotive OEMs design and manufacture, and the driverless vehicles operate, and how customers interact with them. Coupled with IoT hardware and superior computing power, 5G technology presents a myriad of possibilities for the automotive industry.
Founded in 2009 and headquartered in Shanghai, PATEO CONNECT+ Technology C (hereinafter referred to as PATEO) is one of the long-established Telematics enterprises in China. Concerning the advent of 5G technology, the founder of PATEO, Ken Ying contends that "The escalating upgrades of automotive intelligent networks and advanced technologies (e.g., 5G) brought about dramatic changes on supply relationships and business models. In response to this, PATEO will provide a wide range of cooperation scenarios in aspects of OEM, hardware, and software models." When it comes to an intelligent cockpit, Ken believes that "5G technology will provide a comprehensive range of intelligent cockpit application scenarios. For example, based on 5G V2X, we can carry out scenarios related to self-driving vehicle-road cooperation (e.g., cloud driving) and deploy some cloud services to enhance user experiences."
Amid the fast-growing penetration of ICVs coupled with the increasingly complex transportation environment, there has been a growing awareness on the violation of users' confidential information. The security issue can be considered as a significant obstacle in terms of the industry's sustainable and healthy development. In this regard, Ken responded that "PATEO attaches great importance to users' personal privacy rights in compliance with national laws, regulations, and requirements and establishes a security management committee. Meanwhile, we also strictly require our downstream suppliers to ensure the confidentiality and safety of user data." Ken also mentioned the function of the intelligent cockpit, PATEO has added that "the setting of user privacy, which actively assists users to conceal sensitive information through well-processing user data collected by car-end devices, such as data in the car recorder, license plates, and facial recognition."
Implementing advanced assisted and autonomous driving technology has become a primary focus in the product configuration of major automobile enterprises. As the Intelligent Networked Vehicle Technology Roadmap 2.0 suggests, it is expected that the penetration rate of PA (partially autonomous driving) and CA (conditional autonomous driving) intelligent networked vehicles continues to increase, reaching 50% in 2025 and more than 70% in 2030. The assembly rate of new vehicles with C-V2X terminals is anticipated to reach 50% in 2025 and be popularized in 2030.
Intelligent connected vehicles (ICVs) can provide safer, more comfortable, energy-efficient, environment-friendly travel modes and integrated solutions. It does not only pose significant impacts on the value-chain of the future automotive industry but also provides the Chinese automotive industry with strategic opportunities for transforming and upgrading auto products and technologies. ICV is regarded as a vital component of the urban intelligent transportation system, redefining the 'car of the future in China. From the perspectives of government guidance, market regulation, and corporate R&D, China's ICV industry faces a myraid opportunities and challenges. China's government has been formulating policies and promoting investment to support the development of ICVs. Driven by mobile and government-supportive connectivity, it is anticipated that there will be explosive industrial growth of the ICV sector in the future.