Baidu to start producing self-driving cars with FAW, Volvo in race for next crown in world’s biggest market

Baidu pushed deeper into autonomous driving with plans to start producing self-driving passenger cars with the state-owned FAW Group next year, with similar plans to develop models with Volvo Cars for China, the world’s biggest passenger vehicle market.

The Beijing-based internet search giant, which has in recent years invested heavily in its Apollo autonomous driving platform, unveiled a joint developed self-driving model with FAW at the Baidu Tech 2018 conference on Thursday. The car is expected to become the first mass-produced driverless car in China when large-scale production takes place in 2020, according to FAW chairman Xu Liuping.
Baidu separately announced a similar plan with Volvo Cars to develop so-called level-four autonomous cars “over the next few years”.

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While China boasts the world’s biggest car market, its home-grown brands mostly occupy the low- to mid-end of the market. Chinese consumers still continue to see foreign brands to be superior in quality and reliability to local marques despite the latter closing the gap over the years.

With autonomous driving and electrification, the value of the automobile shifts from the efficiency of the internal combustion engine to connectivity and the suite of add-on features that Chinese internet companies have a closer feel for local tastes and needs compared with global giants like Google that have been out of the market.

The artificial intelligence (AI) technology behind self-driving cars is also seen as an amalgamation of the advanced consumer and industrial technologies, spanning 5G mobile systems and new energy vehicles to manufacturing. This is in line with the strategic direction that the Chinese government is taking to push its enterprises to upgrade themselves and up the value chain of technology. Chinese President Xi Jinping said on Wednesday that China must develop, control and use AI to secure the country’s future in the next technological and industrial revolution.

“With Baidu, we take a big step forward in commercialising our autonomous compatible cars, built on Volvo’s industry-leading safety technology,” said Hakan Samuelsson, the president and chief executive of Volvo Cars. “There has been a strong development of autonomous driving in China, where Baidu is a leading player, and the market there offers huge opportunities for us as the supplier of choice for autonomous fleets.”

Under their agreement, Volvo will use Baidu’s open-source autonomous driving platform Apollo to test and develop level-four autonomous cars, while sharing its extensive automotive industry know-how with Baidu.

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The two tie-ups followed an agreement unveiled on Wednesday between Ford Motor and Baidu, which will help the US car maker conduct a two-year test of its level-four autonomous cars on Beijing’s road network.

Various Chinese and overseas-based hi-tech firms are looking to develop level-four autonomous trucks and cars. That means these vehicles would be able to slow down, pull over or park at a safe spot if a human driver does not take control when requested, according to industry guidelines set by the Society of Automotive Engineers.

These new initiatives mark a big step up in Baidu’s efforts to burnish its reputation and deepen its expertise as a major player in AI technologies. China has the goal of building a domestic AI industry worth about US$150 billion and to make the country a global leader by 2030.

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Besides Baidu, other internet giants Alibaba Group Holding and Tencent Holdings are also investing in self-driving technology and developing intelligent operating systems for vehicles. 

China expects one in every two new cars sold to be equipped with smart and at least partial autonomous functions by 2020, according to a guideline by the National Development and Reform Commission, the country’s powerful planning agency, earlier this year. Industry and Information Technology Minister Miao Wei expected the market scale for intelligent connected vehicles to grow into 100 billion yuan (US$14 billion) by 2020.

On Thursday, Tencent announced six areas it will focus on for its auto strategy, ranging from car connectivity, autonomous driving to content, geography-based service and safety systems.

“We are willing to co-establish research and developing team, combined with our own strength, to reach volume production of level three,” said Su Kuifeng, director of the Tencent Autonomous Vehicle Lab at the company’s partners’ day in Nanjing.

Tencent is working on building a voice-operated version of its WeChat messaging app into cars that can also enable real-time navigation and the sharing of geographic location, according to Tencent chairman and chief executive Pony Ma Huateng in an earlier speech last month.

Alibaba, parent company of the South China Morning Post, has signed wide-ranging partnerships with Ford, SAIC Motor and Volvo Cars.