May 10, 2017
The concept of self-driving cars conjures up images of Silicon Valley, at least in my head. I'm sure I'm not alone.
But I should be looking a lot closer to my Hong Kong home. Asia is a major battleground in the fight to bring driverless cars to life.
The governments of Singapore and South Korea have this week both provided ammunition, leading to investment plays in the companies below. Japan already has a thriving industry producing technology and parts for autonomous driving.
South Korea on Monday gave Samsung Electronics permission to test drive autonomous cars in the country, according to the Korea Herald. The tech giant can now start a pilot program.
The company is working only on sensors and computing power for the Grandeur sedan made by Hyundai Motor, the largest Korean carmaker. Samsung said it picked the sedan purely because it's so common in Korea, so it can test its algorithm and software. It is particularly proud of their performance in bad weather.
South Korea's transportation ministry has already approved 19 companies to test self-driving cars since it approved Hyundai at the start of 2016. But Samsung is the first electronics company granted such permission, the ministry said.
The Samsung chaebol, which accounts for 15% of the entire Korean economy, exited the car business when it sold Samsung Motors to Renault in 2000, as a result of the Asian financial crisis. But while it refuses to get back into making entire cars, it quietly set up a car-component division in 2015 to make "smart" car parts.
Samsung's first big move in that direction came last October, when it bought U.S. car-parts supplier Harman International. Samsung is now reportedly in talks to buy the auto-parts maker Magneti Marelli, a subsidiary of Fiat Chrysler.
The Korean government gave the whole self-drive industry a boost at the same time as approving Samsung. It cut the number of mandatory passengers for driverless cars in Korea from two to one. The transport ministry also said it would approve the testing of autonomous vehicles that do not have steering wheels or pedals.
Separately, NuTonomy announced on Wednesday that it will partner with Peugeot to test self-drive cars in Singapore.
Pocket-size Singapore is the perfect microcosm to study autonomous driving in an urban environment. City life and urban obstacles require a radical approach to vehicle design, particularly with the software and sensors, an R&D executive at Peugeot's parent, the PSA Group, told Reuters.
Boston-based NuTonomy will provide computing hardware and software, as well as sensors that will go into Peugeot 3008 cars, which should require no driver input to function. One aim is to develop a vehicle suitable for large fleets. PSA Group is looking to learn what parts make sense in such cars, and which suppliers to use.
If this test works out, the team plan to roll it out to other major cities. NuTonomy already automates Renault Zoe and Mitsubishi i-MiEv cars, which are both electric-powered.
NuTonomy, which is privately held, last year became the first company to start road testing of driverless taxis with those electric cars. It also ran that test in Singapore, which has a strong (some would say stern!) government set on fostering innovation.
In the Singapore taxi test, a small group of pre-selected riders can download an app from Grab, the Singapore-based ride-hailing company that functions across Southeast Asia, and hail a free taxi to drive them on four miles of roads in the One-North tech business park. An engineer rides along just in case. That should provide feedback for a proper launch of the service in 2018.
Samsung is backing NuTonomy via its venture-capital arm, Samsung Ventures. Ford chairman Bill Ford and the Singapore government are also among its investors.
Didi Chuxing, China's version of Uber, is also working on self-driving cars and artificial intelligence.
Didi only operates within China for now. It was in a fierce battle for market share with Uber China until last year, when Uber caved and sold out to its competitor. Didi now owns a stake in Uber, and has also invested in Lyft in the United States, Grab from Singapore and Ola in India.
Didi is currently looking to raise $5 billion to $6 billion from investors to fund its work on self-drive vehicles, according to the Financial Times, citing "two people close to the funding deal." It will also use the money to expand outside China.
The scale of that investment would slap a $50 billion value on Didi Chuxing, which would make it the second-largest private tech startup by value, behind only Uber itself.
Beijing-based Baidu, "China's Google" and then some, is also working on driverless cars. It plans restricted tests in China in July before a full rollout of driverless cars in 2020.
The Asian companies join U.S. large caps from both the car and tech industries in the race to make hands-free cars.
Tesla, Ford and General Motors are all hard at work on the vehicle side, as is Toyota Motor. Google parent Alphabet, a holding in the Action Alerts PLUS, which Jim Cramer co-manages as a charitable trust, plans to go beyond tests with its Waymo unit and start making hundreds of vehicles available to commuters in Arizona. Apple last month won approval from regulators in California to test self-driving vehicles there.
Source: TheStreet.com