Aptiv, a global automotive technology company, announced last week that it has opened a new innovation hub in China—the fastest growing front in the self-driving tech wars.
The new entity is called the China Autonomous Mobility Center, and as a result of the move, Shanghai joins Aptiv’s roster of driverless car testing locations, which also include Singapore, Boston, Pittsburgh, and Las Vegas. The company said the Shanghai center will concentrate on the development and application of its level 4 (highly automated) self-driving technology.
Based in Ireland, Aptiv was formerly known as Delphi Automotive until it spun off its powertrain business in 2017. The reorganized company made a series of acquisitions, including buying Boston-based NuTonomy for at least $400 million two years ago, to beef up its mobility capabilities. Today, Aptiv is mostly focused on vehicle software, electrical components, and autonomous vehicle (AV) technology.
Karl Iagnemma, president of Aptiv Autonomous Mobility (and co-founder of NuTonomy), said in an e-mail interview that the time was right to set up shop in China. He said the company chose Shanghai because of its established roots in the city dating back more than 20 years. Aptiv began operations in China in 1993, and the company said it has a significant engineering and manufacturing presence in the country.
“With strong policy support and high market acceptance of autonomous driving in the region, we see demand for autonomous driving technologies in the Chinese market scaling over the next several years,” Iagnemma explained. “The Chinese market has demonstrated that it’s on the forefront of autonomous mobility, and the local government is leading in support of future transportation, making Shanghai an ideal next market.”
Shanghai stood out from other potential areas because of its strong government support of AVs and “a clear forecast of public acceptance,” Iagnemma continued. He pointed to a recent McKinsey report that predicts China will become the world’s largest market for autonomous vehicles, accounting for two-thirds of the passenger-kilometers traveled by 2040, generating market revenues of $1.1 trillion from mobility services and just under $1 trillion from sales of autonomous vehicles.
Iagnemma sees a strong demand for mobility-as-a-service in China. Consumers are moving away from traditional car ownership, he added, and are adopting multi-modal transport options that are more beneficial in urban environments.
“Aptiv is confident that the next milestone in the mobility evolution is bringing autonomous vehicles on demand to consumers,” he said. “We believe that a critical piece of achieving consumer trust is inviting the public at-large to experience autonomous vehicles.”
Iagnemma said that through its commercial deployment of AVs in Las Vegas, the company has seen a positive response from passengers. To date, Aptiv said, it has given more than 40,000 rides to the public in its self-driving vehicles, with nine out of 10 passengers saying they would ride again. “In the future, we hope to make a similar impact on consumer trust of AVs in China,” he said.
When asked about the regulatory pathway to getting AVs on the road in China, Iagnemma said, “We are cooperating with all local and regional government authorities and abiding by the regulations and policies in all markets where we have AVs deployed. Our goal is to ultimately launch a commercial ride-hailing service in China.” The company said it’s “actively in discussions with potential partners for mapping and commercial deployment of Aptiv’s vehicles in China,” but couldn’t share anything further on timing.
“We expect to pull the driver out in 2020, with initial deployments starting in 2021 or 2022 and scaling from there,” Iagnemma said. “By 2025, we expect the market to reach $10 billion. We’ve been very thoughtful about our timeline. It’s not about accumulating millions of miles or amassing a fleet of vehicles, it’s about understanding both the technology—software and hardware—as well as the ecosystem we’re trying to deploy it into.”
Aptiv is also expanding its Michigan operations. Iagnemma said the company is currently renovating its facility in Troy, MI, to accommodate 500 new engineers, support staff, and electronic lab technicians. He said those interested in working for Aptiv should check out the job listings on the company’s website.
