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Under the Banyan Tree – Get ready for a LOT of driverless cars in China
227 Plays9 hours ago
Head of China Autos Research Yuqian Ding joins Fred and Herald to give her outlook on the explosive growth of autonomous driving in mainland China.
Click here for appropriate Disclosures, including analyst certifications, and Disclaimers that must be viewed with this podcast: https://www.research.hsbc.com/R/101/Gnvj2NQ
Stay connected and access free to view reports and videos from HSBC Global Investment Research, just search for #HSBCResearch on LinkedIn or click here: https://www.gbm.hsbc.com/insights/global-research
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Transcript
Introduction to Podcast Series
00:00:01
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:13
Speaker
Make sure you're subscribed to stay up to date with new episodes. Thanks for listening, and now onto today's show.
00:00:33
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Hello from
Autonomous Driving in China
00:00:34
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Hong Kong and welcome to Under Banyard Tree, where we put Asian markets and economics in context. I'm Fred Newman, Chief Asian Economist here at HSBC. And I'm Harold van der Linde, Head of Asian Equity Strategy. For years we've been hearing about autonomous driving in China. But things are really taking off now. and We've got some numbers that are actually pretty astonishing.
00:00:53
Speaker
That's right. And joining us to bring those numbers to you is our special guest for the week, Yuqian Ding, head of China Auto's research, who's been across the story from the very beginning. Plus,
Expert Insights on Vehicle Advancements
00:01:03
Speaker
the latest on the nationwide autonomous drive rollout, technology and competition with the US. We've got a lot to get through, so let's get started from HSBC Global Investment Research you're listening to Under the Banyan Tree.
00:01:22
Speaker
Yu Chen, welcome onto the podcast. um You've written a report about autonomous driving in China. Now,
Current State of Autonomous Cars in China
00:01:30
Speaker
I'll be very frank. I think I've been seeing people writing or hearing about this for 10 years now. If me and Fred go to China now and say, I want to buy an autonomous car, can I buy one?
00:01:43
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You can buy it this month. One of the leading smart EV companies, Xpong, will launch a new model GX this month. And it will come up with a robot taxi version.
00:01:55
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and and And that robot taxi version can both serve the purpose of a private car as well as robot taxi if you want it. And also I would ah update, it's a commercial viable service. So if you travel to Shenzhen, Nanshan area, you can actually hail a robot taxi to take you to the place you you want to go.
00:02:15
Speaker
And there will be no driver sitting in the driver's seat. So so let's let's put some numbers around this. um
Comparative Analysis: China vs US in Autonomous Taxis
00:02:21
Speaker
So there are certain areas in China where just like in the US, you can now hail an autonomous cab within a certain area. How many of these autonomous taxis are now in operation in China and the US? And where do you think this will will go? Are we talking about, you know, two, three hundred going to a thousand maybe? Or what are we talking about in terms of numbers?
00:02:42
Speaker
Yeah, in China we currently have, give or take, around 5,000 robot taxis running. All the whole of China, all these different cities, all these different pilot projects. And this roughly the same as the U.S.? Yeah, I would say it's similar. China-U.S. in terms of the commercial attraction is largely similar. And in China we do see by 2030 about half a million robot taxis flea on the road. You from 5,000 now to 500,000 in five years' time. Well, you know 2030 is only four years away, that, three years. Three years, 100-time expansion.
00:03:17
Speaker
So making a car is a commodity in China. So it's it's really about the technology, including the sensors to the processors to the softwares. So um we do see um the sensors, the hardware cost is coming down. so But but let me let me ask you on on the technology because, I mean, where you have an enormous expansion here. You're
Technology Readiness and Safety Concerns
00:03:39
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saying we're going to half a million of these taxis in three years.
00:03:43
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Have we perfected all of this? Is it is really adoption ready for the broader public to use? Yes, it's already ready. So let's say the current ah robot taxi company can run in no disengagement, no human intervention for tens of thousands miles.
00:04:02
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um In that sense, it's basically commercial viable and a reliable robot taxi service. So I would say technology is ready. Have you looked at some of the accident statistics? Are they doing better than humans driving? Is it actually safer to have tens, thousands of these vehicles on the road or is it still a w risk that they occasionally do a, you know, ah quite a fatal mistake?
00:04:27
Speaker
Yeah, I would say ah machine is indeed better. They have better sensors, they have more processing power. So basically, as the the software progressing, it drives more in a mature way. So I would say 10 years ago when we test drive, it it feels like ah a green driver. Now it's a pretty he experienced, a calm driver.
00:04:48
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So let's take a hypothetical situation. There's a robot taxi, it it drives on the street, and there's a man that is crossing that street, And there's a collision.
00:04:59
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The man breaks his leg. He needs to go to hospital. And he sues who? how How does that work insurance-wise? how
Insurance and Liability Issues
00:05:07
Speaker
Have they thought that through? um I think there's a clear ah protocol. So first of all, all these robotaxis is equipped with cameras. So they record everything so and everything they can see. So ah any accident can be clearly defined.
00:05:24
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So which party need to be responsible for that? Let's say in this case, the robotaxi clearly made a mistake. It was a glitch or it didn't see something. The guy came from behind the tree. but So it it made a mistake. And how then?
00:05:36
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Is that then the robotaxi needs to pay for that? Yeah, so basically, ah ah currently is the robot taxi operator who will be taking the responsibility. Although I would argue the responsibility will be clearly defined. It's a hardware issue or it's a software issue or which part of the it went wrong. So it can be then clearly defined and traced back. So I think everything is traceable because it's all computer, it's all recorded. It's basically um um on recording all the time. So yeah. um Can we talk a little bit about the the two leading ah nations in this technology, are clearly US and China? And
Tech Approaches and Cost Structures: US vs China
00:06:15
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I think you've told us that they have roughly the same number of vehicles on the road, about 5,000 in each country.
00:06:22
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Is there a difference in the technological approach that has been taken in the U.S. and China in terms of the underlying technology? Is one superior to the other? Are they different approaches? or Or are they kind of converging on the same same type of technology here?
00:06:40
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I would say technology-wise, it's now increasingly a commodity. So I think the the narrative of autonomous driving has been shifting from technology differentiation towards commercial scaling.
00:06:52
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So technology, if you can do it, now roughly I would say China, U.S. s So basically you say a U.S. autonomous taxi, a robot taxi, and a Chinese robot taxi, technology-wise, it's exactly the same. It's largely the same. I would even argue ah the company difference is more...
00:07:09
Speaker
It's more of a difference than the um country difference. China, robot taxi companies such as Pony and Weiride, they have LiDAR sensors. LiDAR being a form of a sensor. Sort of radar. ra Like a type of radar sensor. It can see longer distance than radar. So that's LiDAR. But for ah Tesla, they also run pilot robot taxi program. But they insist no LiDAR, only visual camera.
00:07:35
Speaker
Hmm. So I think the technology do have some deviations. but And then and then if if they are roughly technologically comparable, even though the company differences are bigger than the national differences overall, as you put it, um do you foresee then one country having the edge over time when it comes to revolutionizing the world into autonomous driving?
00:07:55
Speaker
So both countries look very dynamic. Both are heading for an explosive commercial pathway. But I would argue u ah the whole return and revenue model is much better because you guys are traveling to the US, you know the bill, right? So they can charge more. so They charge much more. They charge much more. And the cost would be almost the same because the technology is not too different, you say, right?
00:08:17
Speaker
ah Actually, no. I would say the China cost structure is much, much better because we have this whole supply chain here. The sensors cost, ah the the processing chips cost has been materially more competitive in China. It's the same technology, lower cost in China. It's more expensive in the US, but cost-wise, but they can charge much more because it's quite cheap in in China.
00:08:40
Speaker
Exactly. Because China's cost structure is more favorable, so it has a better scaling potential. Well, Errol, first of all, I'm blown away by this. Thank you for joining us, Yuqi. You're talking about 500,000 of these vehicles being deployed in the next few years. The technology has matured. ah ah You can use it as robotaxi. You can use it for personal purposes as well. And they're rolling it out now. And they're
Future of Autonomous Vehicles and Podcasting
00:09:04
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rolling it out. And it's not a future it's not a future hypothetical thing. it's It's happening this month with a new model coming. But Harold, this leads me to one great idea. You and i not being the best drivers ourselves, we're going to take Under the Banyan Tree on a road trip in across China in an autonomous vehicle. And we'll just record episode by episode. And we have the podcast pot inside so we can just sit and and and chat away. We chat away and that will be Under the Banyan Tree on the road.
00:09:34
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Excellent. And on that note, it's goodbye from the three of us. Thanks for listening. And please do
Closing Remarks and Podcast Subscriptions
00:09:40
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subscribe to Under the Banyan Tree on your podcast platform of choice if you haven't already.
00:09:45
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Indeed. And that also applies to our sister podcast, The Macro Brief from London. Under the Banyan Tree is an HSBC Global Investment Research production produced by Graham Mackay. We'll be back again next week.
00:10:24
Speaker
Thank you for joining us at HSBC Global Viewpoint. We hope you enjoyed the discussion. Make sure you're subscribed to stay up to date with new episodes.