The pilot program for „vehicle-road-cloud integration“ smart connected vehicles has been initiated across 20 cities with over a month underway. These cities, which include major ones like Beijing, Shanghai, and Chongqing, have started design scheme tenders with planned investments now surpassing 30 billion yuan. Cities not included in this pilot round are preparing for future opportunities.
Vehicle-road-cloud integration aims to enable autonomous driving through the collaboration of vehicles, roads, networks, clouds, and high-precision maps. This initiative seeks to make significant advances in intelligent connected vehicle technology by integrating components such as onboard terminals, roadside infrastructure, and cloud control platforms. Government investments have significantly exceeded market expectations, thus accelerating demand for vehicle-road coordination by fivefold compared to the previous year.
Initial digital construction plans include 30 highways across 20 key cities within three years, laying the groundwork for a vehicle networking main infrastructure. The pilot period for the first batch of cities runs from 2024 to 2026, with proposed investments projected to exceed 600 billion yuan by year’s end and the technology anticipated to expand to 50 major cities involving over 20 automobile companies.
Investment in smart road infrastructure in urban settings is estimated at 404.7 billion yuan, with highway infrastructure at 132.7 billion yuan, and cloud-based solutions at 29.581 billion yuan. Stock prices for related companies, such as Wanji Technology and Kinyin Technology, have significantly risen due to the boom in market expectations following policy announcements.
Despite the rapid progression at a top governmental level, industry experts highlight significant challenges. These include high costs, technological innovation hurdles, the need for cross-industry collaboration, and the creation of robust business models.
Countries like the US and the EU have chosen a different path focusing on vehicle intelligence for autonomous driving. The Chinese government has shown a dual-approach mindset addressing both vehicle-road-cloud integration and single-vehicle intelligence, seeing them as complementary rather than contradictory.
Prominent companies in autonomous driving like BYD, NIO, and Changan Automobile have been approved to conduct pilots for higher-level autonomous driving (Level 3 and 4). The vehicle-road-cloud model can potentially leverage China’s advantages in 5G technology and infrastructure, although the challenge remains in securing adequate funding and creating sustainable commercial models.
Beijing, one of the most advanced cities in this aspect, has made substantial progress. Its Yizhuang project initially aimed at supporting L4 vehicles, now incorporates L2+ advanced driver assistance systems. The city’s wide-scale infrastructure setup and trials have been a relatively expensive endeavor with a preliminary investment of nearly 10 billion yuan. Replicating such projects nationwide highlights the financial and technical challenges that need to be addressed.
While the vehicle-road-cloud system is still in its infancy, regulatory authorities seek to establish a viable commercial loop. This involves extracting value from data sharing and optimizing urban governance using integrated systems.
Ultimately, automakers are cautious to commit to significant upfront investments in these integration projects. They prefer to benefit from the existing but limited infrastructure, hoping to see more concrete advancements and business models emerge before heavily investing. Nevertheless, the pilot projects represent foundational steps for a broader future adoption.
As vehicle-road-cloud initiatives scale up, differentiating between public service infrastructure and commercially viable projects remains an issue. Local governments, telecom operators, cloud providers, and various service entities are vying for their share, aiming to claim a significant stake in this emerging market. However, clear paths to profitability and operational sustainability continue to challenge this ambitious undertaking.
Autonomous driving in China continues to integrate vehicle-road-cloud systems while addressing economic and technical constraints, aiming for a nationwide standardization and scalable commercial success.