The global autonomous vehicle market is rapidly evolving, with companies like Tesla, Waymo, and Zoox leading innovation in technologies and services. As Chinese firms join the competition, this dynamic landscape presents both challenges and opportunities for South Korea's automotive sector, particularly Hyundai Motor Group.
Allied Market Research forecasts that the autonomous vehicle market will grow from US$158.3 billion in 2023 to US$207.4 billion in 2024, ultimately reaching US$2.75 trillion by 2033.
Boston Consulting Group predicts that the autonomous mobility services market will surge to US$700 billion by 2030, with the robotaxi segment expected to reach US$38 billion and achieve an annual growth rate exceeding 60%.
US and China boost autonomous services as Hyundai ramps up R&D
During Tesla's recent "We, Robot" event, the company unveiled its innovative "Cybercab" robotaxi prototype alongside the Robovan concept bus, setting new standards for autonomous vehicles. Tesla remains committed to advancing its full self-driving (FSD) technology globally, demonstrating its dedication to transforming transportation.
Waymo has successfully commercialized 24-hour autonomous taxi services in Los Angeles and San Francisco, while Zoox has launched fully autonomous services in Las Vegas. Uber plans to collaborate with Chinese firm BYD to deploy over 100,000 autonomous taxis worldwide, a groundbreaking initiative poised to reshape the market.
Cities such as Beijing, Shenzhen, and Wuhan are witnessing various self-driving cars navigating their streets. In addition to major automakers like Geely Auto and Dongfeng, tech giants including Huawei, Xiaomi, and Baidu are focusing on the mobility sector. For example, Baidu has launched its "Apollo Go" autonomous ride-hailing service, while Dongfeng has introduced the "Sharing-VAN," an autonomous bus.
Analysts indicate that although China entered the autonomous driving sector later than the US, it has quickly approached or even surpassed American capabilities due to extensive data collection. Baidu, which entered this field in 2013—five years after Waymo—reported that by 2023, its autonomous taxis in Wuhan had completed 732,000 rides, compared to approximately 700,000 rides by Waymo.
In response to competition from leading US and Chinese firms, Hyundai established the joint venture Motional with American autonomous driving company Aptiv in 2019 to advance self-driving technology. After Aptiv recently decided to cease additional investments and divest its shares in Motional, Hyundai swiftly acquired Aptiv's stake, strengthening its control over Motional and reaffirming its commitment to developing innovative autonomous driving solutions.
Hyundai plans to invest over KRW7 trillion (approx. US$5.18 billion) in autonomous driving and mobility services by 2025. While this investment is relatively smaller than those of global competitors, it is viewed as a proactive strategy considering Hyundai's financial standing and business scale. Furthermore, Hyundai prioritizes quality over quantity, focusing on efficient capital operations to maximize results with limited investments.
Hyundai is advancing its independent research and development of autonomous driving technology. After achieving Level 3 capability by the end of 2022, the company aims to commercialize Level 4 technology by 2025. Hyundai implemented autonomous taxi demonstration services in Las Vegas in 2021 and in Seoul, South Korea, in 2023, marking a crucial phase in accumulating real-world driving experience.
China emerges as the world's largest testing ground for autonomous vehicles
While companies like Tesla and Waymo have effectively commercialized Level 4 autonomous driving technology, Hyundai's 2025 goals lag behind. According to the 2024 report from the Presidential Advisory Council on Science & Technology (PACST) in South Korea, the US technology level is rated at 100, with China at 86.3, Japan at 85.8, and South Korea at 84.2. This data indicates that China has now surpassed both Japan and South Korea in advanced mobility technologies, including autonomous driving.
China's rapid technological development can be attributed to an environment that allows for unrestricted experimentation and data collection, supported by the government, making it the world's largest testing ground for autonomous vehicles. In June 2024, the Chinese government approved nine automotive manufacturers, including BYD and Nio, to test Level 3 vehicles on public roads, with designated testing cities including Wuhan, Beijing, Shanghai, and four others.
Wuhan is recognized as China's leading hub for autonomous vehicle testing, with over 500 autonomous taxis currently operating and transporting passengers. The South Korean industry highlights that Wuhan spans an area 14 times larger than Seoul, featuring 3,378 kilometers (approximately 2,099 miles) of roads suitable for self-driving taxis and other autonomous vehicles—allowing for the equivalent of eight round trips between Seoul and Busan. Additionally, Baidu's mapping application, utilized in 360 cities across China, boasts the world's largest dataset, with plans to deploy 1,000 autonomous taxis in Wuhan by 2024.
In China, there are virtually no restrictions on the collection and use of personal data. Ho-Geun Lee, a professor in the Department of Future Automotive at Daedeok University, pointed out that the Chinese government often overlooks companies collecting personal information, including facial recognition data, to foster business development. Consequently, South Korea is once again being outpaced by China, as autonomous vehicles face challenges in accumulating data through road operations. Currently, there are no established regulations regarding the anonymization of pedestrian data.
Regulatory challenges in South Korea hinder Hyundai's progress
While 34 areas have been designated as autonomous driving pilot zones across South Korea's 17 administrative districts, the data available remains limited due to incomplete regulatory frameworks. Autonomous A2G, the leading operator in South Korea for accumulated self-driving distance, has logged about 400,000 kilometers. In contrast, as of September 2023, China has accumulated 70 million kilometers of autonomous driving data, comparable to levels seen in the US.
Importantly, South Korea has yet to establish specific regulatory frameworks to determine liability for traffic accidents involving Level 3 and above autonomous vehicles. This absence of legal clarity poses a significant obstacle to the advancement of the autonomous driving industry.
Reports indicate that the US has established legal frameworks for autonomous vehicles in states such as California and Nevada, while the South Korean government intends to implement specific procedures by the end of 2024. Furthermore, the US, known for its general permissiveness regarding visual data collection, only lifted restrictions for certain companies in February 2024, underscoring ongoing developments in autonomous driving regulations.
Industry insiders have expressed that while the pace of regulatory improvements may lag behind corporate innovations, the significant gap is still beyond comprehension. The inability to commercialize Level 3 and above autonomous vehicles in South Korea is not due to a lack of technology, but rather because the existing regulations hinder innovation.
As a result, alongside automakers investing in R&D, government support is seen as a vital factor for progress. This includes comprehensive policies focused on easing regulations, developing infrastructure, and providing substantial research and development support. There is an urgent need to establish relevant laws and regulations to effectively enable the commercialization of autonomous vehicles.
AI tech at the core: South Korea's national team pursues cross-industry collaborations
To achieve a high level of autonomous vehicle capabilities, the development of AI technology is essential. According to the "2022 ICT Level Survey and Technology Competitiveness Analysis Report" by the Institute of Information & Communications Technology Planning & Evaluation (IITP), South Korea's AI technology level stands at 88.9 percent of the US level for 2022, showing a slight decline. The US and China lead in AI investments through major players like Waymo and Baidu, widening the gap with other countries.
Compared to US and Chinese companies, South Korean firms have a significant gap in AI investment. To address this, Hyundai is collaborating with major corporations like Samsung Electronics and LG Electronics to build a self-driving car ecosystem, focusing on the development of software-defined vehicles (SDVs) powered by AI.
The South Korean government has recently begun to actively utilize AI computing technology to lead the development of Level 4 autonomous driving. The goal is to invest KRW800 billion in national funding by 2027, along with an additional KRW100 billion in private investment for developing AI specifically for autonomous driving and innovative technologies like 5G-V2X.
An industry insider from South Korea stated that to ensure the widespread application and driving stability of autonomous driving in everyday life, continuous policy support will be provided to enable AI to learn from high-quality data in various situations. The South Korean automotive industry needs bolder innovations and investments, fundamentally transforming business models, decisively implementing acquisition plans, and pursuing strategic collaborations with global tech giants.
The dramatic changes in the global autonomous vehicle market pose significant challenges for South Korea's automotive industry. Companies like Hyundai Motor Group are working to turn these crises into opportunities, but they still lag behind the speed of leading global players. In the future, how Hyundai narrows the gap amidst various constraints in South Korea and ensures competitiveness in the global market will be a key issue affecting the future of South Korea's automotive industry.
Source: Precedence Research, compiled by DIGITIMES, October 2024
Source: Presidential Advisory Council on Science & Technology (PACST), compiled by DIGITIMES, October 2024
Tesla's Cybercab robotaxi prototype. Credit: Tesla
Autonomous driving technology developments in major countries | ||
Country | Policy Update | Key Developments |
South Korea | Revised Autonomous Vehicle Act (July 2024) | Designated highways and major roads for autonomous driving tests; expanded autonomous vehicle test areas to 34 zones. |
The US | Updated NHTSA Vehicle Safety Standards (March 2022) | Under new regulations, self-driving vehicles are allowed to operate for more than 30 days consecutively. Tesla launched FSD testing in China and unveiled the "Cybercab" prototype; Waymo and Zoox rolled out autonomous driving services in several US cities. |
China | Approval of Level 3-4 Autonomous Driving Tests in 7 cities, including Beijing (June 2024) | Baidu launched its autonomous taxi service in 2021, expanding to 10 cities. Baidu plans to deploy 1,000 autonomous vehicles as part of its efforts to push commercialization and full automation of self-driving services. |
Source: South Korean industry insiders, compiled by DIGITIMES, October 2024
