China Starts Heavily Regulating Foreign Self-Driving Firms

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China started regulating foreign self-driving firms in a heavy manner as part of a move that many industry watchers have been expecting for several years now. The effort officially started with Beijing which became the country's first city to allow and begin supervising the experimental use of autonomous vehicles in December, imposing severe restrictions on Western companies in the process of doing so, The Information reports. The rules recently put into place in the capital of the Far Eastern country prevent foreign firms from using their own mapping data for their solutions, citing national security risks. Google's Maps service has been effectively blocked in China since 2006 due to the same reason and is only available to local users in the form of a desktop browser client powered by the data collected by Beijing-based AutoNavi Software.

Without the ability to collect and use their own mapping data, foreign self-driving companies are at a significant disadvantage in China, being unable to rely on any of their own innovations in the crucial segment, at least without fully disclosing them to their mandatory partners in the country. A number of previously introduced Internet security laws have already been limiting foreign autonomous vehicle firms trying to operate in China since mid-2017, particularly the regulation requiring them to store all of their locally collected data on domestic servers. While not as restrictive as the mapping provision, the requirement still exposes such data to additional risks of being hacked and complicates the logistics of affected companies, some industry watchers believe.

Western automakers such as Ford, Tesla, and General Motors, as well as Alphabet's Waymo are hence unlikely to be able to compete with Chinese firms once full-fledged, Level 5 autonomous vehicles become a reality. The only way for them to remain on the market is to partner with local companies and provide them with a cut of their revenues in exchange for technologies they likely wouldn't need if not for the government restrictions. A number of U.S. firms have already been testing internally developed driverless vehicles for years now, yet their Chinese rivals remain unable to develop contemporary LiDAR systems required for such solutions and are sourcing them to this day. Component supply deals are hence the biggest opportunity for Western automakers and tech firms with self-driving ambitions in China, at least until local players become sufficiently advanced on their own and start refusing partnership proposals. Foreign companies are also unlikely to face brighter prospects in the country if trade-related tensions between Washington and Beijing continue rising, which currently seems like a probable scenario.

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