Can Shanghai win the title of “First City for Smart Cars”?

In recent years, the intelligent connected vehicle industry has flourished. In addition to first-tier cities, many second-tier cities are also scrambling to gain a foothold. Regarding Shanghai's development, there are currently two competing opinions: one is that Shanghai is the fastest, has obtained many "first-mover" opportunities, and can be called the "first city"; the other is that it is too early to say that Shanghai is the first city for intelligent vehicles.

So why is Shanghai so popular? In the next commercialization stage, can it win the title of "the first city of smart cars"?

"Demonstration Application" pioneer

From the perspective of strategic planning and policy support, Shanghai has always been at the forefront of intelligent connected vehicles. Recently, the Shanghai Municipal Economic and Information Commission issued the "Shanghai Intelligent Connected Vehicle Testing and Demonstration Implementation Measures (Draft for Comments)", which added a number of related contents such as intelligent connected vehicle high-speed and expressway testing, quasi-commercial demonstration operation, unmanned testing and demonstration, network and data security, and traffic accident handling.

In particular, it is clarified that the applicant can carry out unmanned testing, that is, testing without a safety officer, which will to a certain extent promote road testing of driverless cars in Shanghai.

Xiao Jianxiong, founder and chairman of AutoX, said in an interview with Caixin that "unmanned testing and demonstration" was listed as a separate section for the first time, which was unprecedented in Shanghai. This shows that fully unmanned driving companies are expected to test on public roads in Shanghai in the future, but the specific situation needs to be detailed.

Needless to say, this is not the first time Shanghai has been given the opportunity to "go first and try first". In June 2016, the first closed test area of ​​the "National Intelligent Connected Vehicle (Shanghai) Pilot Demonstration Zone" approved by the Ministry of Industry and Information Technology was launched in Shanghai Jiading International Automobile City. In March 2018, Shanghai issued the first three open road test license plates for intelligent connected vehicles in the country. At that time, China's intelligent connected vehicle industry had just begun to shift from R&D testing to demonstration applications.

Image source: Shanghai Municipal People's Government

The actual travel scenarios of intelligent networked vehicles include not only urban public roads, but also highways, industrial parks, ports, mining areas, etc. The General Office of the Shanghai Municipal People's Government issued the "14th Five-Year Plan for the Development of Shanghai's Advanced Manufacturing Industry", which proposed to focus on the development of new energy vehicles, intelligent networked vehicles, complete vehicles and parts manufacturing, and extend the development of smart travel, auto finance and other service areas.

Specifically in the sub-sector of autonomous driving, the plan aims to further expand autonomous driving road testing and application scenarios, and support testing and application in specific scenarios such as urban expressways, highways, airports, ports, buses, parks, scenic spots, etc.

Public data shows that Shanghai has opened 243 test roads with a total length of 560 kilometers, with more than 5,000 test scenarios, and issued 184 intelligent connected vehicle road test and demonstration application licenses to 24 companies, with a total test mileage of more than 1.9 million kilometers. Looking at the data for the whole year of 2020, Shanghai has issued road test and demonstration application qualifications to 152 vehicles from 22 companies, ranking first in the country in terms of the number of companies and licenses, and its overall construction and development level is leading the country.

Indeed, in terms of both breadth and depth, Shanghai's intelligent networked vehicles are second to none in the country during the "demonstration application" stage. So, in the next commercialization stage, what are the chances of Shanghai becoming the first city in China for intelligent networked vehicles?

Completely equipped, with "substitutes"

Shanghai has a unique automotive industry cluster, which brings together a large number of traditional car companies and international parts suppliers. Looking around, it is a fertile ground for the growth of intelligent connected cars. Traditional car companies include SAIC, new car-making forces include NIO and Tesla, in-vehicle chips include Horizon, and in-vehicle networking includes Zebra...

According to Qichacha data, there are currently 624 companies in Shanghai whose names or business scopes include "autonomous driving, intelligent driving, and unmanned driving", accounting for 12% of the total number in China. Among them, 74.2% of the related companies were established within 5 years.

As the core area for Shanghai to build a world-class automobile industry center, Jiading has a complete automobile industry chain and talent support. As of 2020, Jiading has more than 4,300 automobile industry chain-related enterprises, and more than 90 intelligent connected car-related enterprises, including foreign giants such as Continental, Bosch, and Valeo, as well as well-known domestic smart car companies such as SAIC Zero-Bundle, Huawei, Didi, and AutoX. The total output value of the automobile industry exceeds 850 billion yuan, and the annual output of complete vehicles exceeds 2 million.

With the support of policy planning and industrial supporting facilities, the commercial application of autonomous driving has become the focus of the industry. Earlier this month, Pony.ai announced at the World Artificial Intelligence Conference that its autonomous driving travel service was officially launched in Shanghai. On July 28, Shanghai Baidu Apollo Park opened in Anting Auto City, Jiading, Shanghai. After the opening, the deployment of Apollo autonomous driving operation vehicles will gradually expand to more than 200 vehicles in the future, becoming the largest autonomous driving fleet in East China and achieving high-density operation in the Jiading area.

Not only Jiading, the Lingang New Area of ​​Shanghai Free Trade Zone is moving towards a new highland for global smart new energy vehicle industry investment. In May, 18 smart new energy vehicle industry projects including SAIC, Magna, and Shanghai Inspection Center were launched in Lingang New Area, with a total investment of over 16 billion yuan. According to official statements, it is expected that by 2025, the scale of the smart new energy vehicle industry in the entire new area will reach 200 billion yuan, and sprint to 300 billion yuan.

Image source: Shanghai Lingang

Of course, the completeness of the industrial chain is only one level. What is more important is the reserve of core technologies for intelligent connected vehicles. Zhangjiang Science City brings together 22,000 innovative companies and has 171 foreign-funded R&D centers. It is in a leading position in China in core technologies related to future intelligent driving, such as integrated circuits and artificial intelligence. According to the "14th Five-Year Plan for the Development of Strategic Emerging Industries and Leading Industries in Shanghai", during the "14th Five-Year Plan" period, the average annual growth rate of the scale of the integrated circuit industry will reach about 20%, and the average annual growth rate of the scale of the artificial intelligence industry will reach about 15%. A number of unicorn companies will accelerate their growth, and a number of leading companies will continue to land.

The accumulation of core technologies is inseparable from the reserve of high-tech talents. In recent years, the gathering of innovative talents has accelerated significantly. Zhangjiang now has more than 400,000 scientific and technological talents of all kinds, which can be called a national highland for the gathering of innovative talents. On the other hand, innovative resources continue to gather, and nearly 20 universities and research institutes such as Shanghai University of Science and Technology and Shanghai University of Traditional Chinese Medicine have settled in Zhangjiang.

According to the data provided by Foresight Economist, from the distribution of representative enterprises in China's intelligent connected vehicle industry chain, representative enterprises are densely distributed in Guangdong Province, Beijing and Shanghai, and there are also a certain number of distribution in Jiangsu Province and Zhejiang Province. The representative enterprises in Guangdong Province, Beijing and Shanghai basically cover the entire industrial chain, but in comparison, Beijing and Shanghai have more Chinese headquarters of foreign companies. And another advantage of Shanghai is that the industrial chain of Jiangsu Province and Zhejiang Province can also make necessary supplements for Shanghai.

At the 2020 World Intelligent Connected Vehicle Conference, relevant departments of the three provinces and one city in the Yangtze River Delta signed a cooperation agreement to jointly build a national-level Yangtze River Delta regional Internet of Vehicles pilot zone. After being awarded the "National Internet of Vehicles Pilot Zone" plaque, the relevant cities can enjoy national-level support in terms of funding and policies when developing the smart car industry.

First City? Too Early

In order to promote intelligent connected vehicles continuously and effectively, in addition to the intelligence of the vehicles themselves, smart transportation and smart cities are also crucial, which requires unified coordination, deployment and promotion by the government and relevant departments. Li Lin, deputy chief engineer of Shanghai International Automobile City (Group) Co., Ltd., said in an interview with Xinhua News Agency that Shanghai has basically built a "1+1+N+1" overall framework for the coordinated development of smart city infrastructure and intelligent connected vehicles.