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  • Kyle Chua

Shanghai Betting Big on Intelligent Cars, With Industry Expected To Produce US$72 Billion by 2025

The General Office of Shanghai Municipal People’s Government unveiled plans to accelerate research and development of key technologies related to intelligent vehicles, with the industry expected to contribute an estimated 500 billion yuan (US$72 billion) to the economy by 2025.

Credit: Shutterstock via The Independent

According to the South China Morning Post (SCMP), the city wants to have more than 70% of vehicles produced by the target year to have L2 and L3 driverless systems, while L4 is realised in “specific areas and scenarios”.


The majority of intelligent cars travelling the city's roads today are said to be classified as L2 or L2+, which describe systems that still require drivers to be ready to take control of the wheel at all times. L3, meanwhile, refers to more "hands-off" driving in which the system is capable of all the dynamic tasks that it's been programmed for. L4, on the other hand, is "eyes-off" driving in which the vehicle itself can perform actions to reduce the risk of accidents if ever the automation system fails in any way.


It's worth noting that the classification system used by the Society of Automotive Engineers’ (SAE) is slightly different from the one used by China.


The plan involves creating more policies that would support the companies and research institutes in Shanghai that are innovating in the field of intelligent vehicles, including providing them with more government guidance funds and financial incentives. The amount of funds the city would allot, however, wasn't disclosed in the plan.


"The autonomous driving systems that are being developed by carmakers and technology firms now are all preliminary technologies, and the industry size can grow to trillions of yuan when L4 and L5 autonomous driving become a near certainty over the next decade," Phate Zhang, the founder of the Chinese electric vehicle news outlet CnEVpost, told SCMP. “Government support will greatly help Shanghai-based companies develop autonomous driving cars.”

Tesla's Shanghai factory. Credit: CNN

L5 refers to fully automated driving, which essentially describes a system that doesn't have limitations in its self-driving capabilities.


The 70% goal for the locally built intelligent vehicles reportedly translates to about 2 million vehicles a year in 2025. For context, Shanghai produced about 2.83 million vehicles in 2021, serving as the home of factories operated by Tesla and the joint venture between General Motors and SAIC Motor.


The plan is supposedly part of the Shanghai government's effort to help the local economy recover after the extended COVID-19 lockdown earlier this year. It's also part of the financial hub's new push to boost development in the field of artificial intelligence as it looks to keep up with Beijing and Shenzhen.

 
  • The Shanghai government unveiled plans to accelerate research and development of key technologies related to intelligent vehicles, with the industry expected to contribute an estimated 500 billion yuan (US$72 billion) to the economy by 2025.

  • The city wants to have more than 70% of vehicles produced by the target year to have L2 and L3 driverless systems, while L4 is realised in “specific areas and scenarios”.

  • This involves creating more policies that would support the companies and research institutes that are innovating in the field of intelligent vehicles.


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