Electric cars likely to become ‘smarter’ as Chinese start-ups adopt smartphone approach

PUBLISHED : Wednesday, 20 July, 2016, 8:25pm
UPDATED : Wednesday, 20 July, 2016, 10:46pm

With the smartphone industry beginning to mature, there’s been a lot of speculation about the next big technology trend. If Shen Haiyi is right, it’s going to have four wheels.

Beijing-based Zhiche Auto, founded by Shen at the end of 2014 with a team of 100 people, plans to apply the innovation model of the smartphone to the country’s auto industry.

“Before the iPhone, there was no smartphone, only a feature phone. iPhone created a new market and a new era of smart devices. Similarly, traditional automakers are making ‘feature vehicles’ – but we are making a ‘smart vehicle’, or smart devices with four wheels,” said the 42-year-old Shen, a former vice president of Qihoo 360 and Kingsoft.

The start-up will complete its second round of financing in September, raising several hundred million yuanto develop a smart car equipped an independently-developed intelligent driving and safety system as well as various internet-enabled technologies.

The first batch of the battery-powered “Jidian” SUVs, using an electric motor developed by Kyoto-based Green Lord Motors – known as the “Tesla of Japan” – is expected to hit the mainland Chinese market by the end of 2017.

The electric vehicle market is becoming a crowded field in China, with Beijing playing a major role in developing the sector through financial incentives aimed at making the country a global leader in this sector. Both the central and local governments heavily subsidise sales of electric vehicles that are made in China - with rebates of more than 100,000 yuan per vehicle, depending on the city.

China sold more than 330,000 electric vehicles last year, representing a year-on-year surge of 343 per cent, and the government has targeted selling 1.1 million electric vehicles annually by 2020.

Besides Zhiche, a growing number of Chinese electric vehicle start-ups have successfully secured private equity financing in the past two years to build electric, auto-driven and digitally connected vehicles,

“It’s a new big opportunity in the mainland market for every participant,” said Shen, adding that he doesn’t see the competition as a threat. “Actually, we are not rivals… but together we foster the new market and teach young Chinese customers what they can have and enjoy from a smart car.”

Smart cars generally refer to vehicles equipped with advanced sensors that exchange information between driver, the car and the road.

Zhiche’s Jidian SUV will target Chinese internet users born after 1985, living in China’s first-and-second-tier cities, who are attracted by affordable domestic Chinese brands of smart devices, instead of more expensive foreign brands.

Shen admits that China’s R&D capabilities on electric power technology for vehicles still lags behind Japan. “But we can lead the development of intelligent control system designed for smart vehicles,” he said.

Jidian is designed to be an open and smart platform that would include software and apps developed by third-party developers offering updated and better functions and experiences for drivers. Such a platform, with its increasing number of new apps, could make Jidian stand out from other vehicles, Shen said.

“Just like the iPhone, which now with more than 2 million apps, something even Steve Jobs could not have imagined at the beginning,” he said.

Zhiche has teamed up with Li Deyi, and academic from the Chinese Academy of Engineering and one of China’s most renowned unmanned vehicle experts, to develop Jidian’s intelligent driving system.

Shen said the independently-developed system could see Jidian achieve limited self-driving automation by 2018, defined by the American National Highway Traffic Safety Administration as a situation when drivers can fully cede control of all critical safety functions in certain conditions. The car senses when conditions require the driver to retake control and provides a “sufficiently comfortable transition time” for them to do so.

The Zhiche R&D team conducts regular brainstorming sessions to come up with new internet features to incorporate into the car to make it smarter and more attractive to young Chinese mobile internet users.

“For example, we are thinking of using videocams not only for the tachograph but also for live streaming online anytime while driving,” Shen said. “With these innovative applications, Jidian would be a smart car with strong online social media features to attract Chinese internet users.”

With the market for electric vehicle start-ups become crowded in China, Shen’s team may face challenges in meeting their deadline for the debut of the Jidian.

This month, NextEV, a Chinese-backed electric vehicle start-up, announced it was close to getting financing of a few hundred million US dollars, with plans to launch its first electric car on the market in 2017.

Also this month Future Mobility Corp, the Chinese electric car start-up backed by internet giant Tencent Holdings, said it would have its first driverless vehicles on the road by 2020.

In May, Chehejia, another electric vehicle company founded in July last year, announced its first round of financing worth 780 million yuan, aiming to launch two smart car models by 2020.

And in February Qiantu Motor, established by car design company Beijing CH-Auto Technology, invested 2 billion yuan to set up a factory in Suzhou to produce the Qiantu K50 electric roadster. According to its schedule, the first batch of vehicles will roll out of the factory at the end of the year.

For Zhiche’s Shen, he sees the mainland market as big enough for all these start-ups. “No one can and there is no need to monopolise the mainland market,” he said, “One per cent of the 200 billion yuan market each year means over 40 billion yuan in annual revenue. That’s already good for any of us.

“The most important thing is to make your design and functions different from your rivals, and foster the market together with the rivals,” he added.