At a glance: Shanghai’s Municipal Government issued a plan to advance the local autonomous driving sector. The plan is part of the implementation process of national and local policies aimed at making China a powerhouse in autonomous driving technologies and applications. Key targets for 2025 include:
- Reach CNY 500 billion revenue annually in the autonomous driving sector (up from an estimated CNY 100 billion)
- Achieve at least 70 percent market share for cars with conditional automated driving (L2-L3), and initial deployment of highly automated cars (L4) — including for commercial activities
- Make significant progress in the R&D and application of core technologies and components — including automotive-grade chips and AI algorithms
- Establish a domestically leading and internationally competitive standard-setting autonomous car brand
Explainer: China’s Taxonomy of Autonomous Vehicles
In March 2022, China’s first national standard for grading autonomous driving came into force, providing a benchmark for carmakers. The six-level standard provides official definitions for self-driving cars from level zero (L0), relying almost entirely on human drivers, to L5’s “fully automated driving”. Levels 0–2 are considered “assisted driving”, where the system supports humans to perform certain tasks, while levels 3–5 are considered autonomous driving where the system replaces humans under specific operating conditions.
MERICS comment: Shanghai ranks only behind Guangdong as China’s second biggest automotive production hub and hosts several foreign carmakers including Volkswagen, General Motors and Tesla. The plan makes abundantly clear that city officials regard autonomous driving as crucial to further entrench Shanghai’s position in automotive value chains, both within China and globally.
Indeed, despite its global focus, this latest plan is equally concerned with local competition. Shanghainese officials see themselves competing not only with foreign car producers but also with other Chinese cities, some of which have recently pulled off major feats. This summer, Chongqing and Wuhan received China’s first-ever permits for driverless autonomous vehicles and Shenzhen issued a potentially groundbreaking regulation on autonomous vehicles, streamlining the permit system and clarifying liability in case of an accident. In this dynamic and competitive environment, Shanghai cannot afford to fall behind.
For foreign firms, Shanghai will become an even more attractive R&D destination for autonomous vehicle solutions. The city already offers subsidies for foreign R&D centers in strategic industries. However, as part of China’s self-reliance push, foreign companies will be expected to localize key production and development processes. The plan includes clear language on creating independent innovation and technologies. European governments should take note of Chinese cities like Shanghai making headway in autonomous vehicle technologies. Rather than in Europe, these could increasingly be developed in China with implications not only for carmakers, but also suppliers and third market competition.
Article: Implementation Plan for Accelerating Innovation and Development of Shanghai’s Intelligent Connected Vehicle Sector (上海市加快智能网联汽车创新发展实施方案) (Link)
Issuing body: Shanghai’s Municipal Government (via CAAM)
Date: September 6, 2022