China’s transportation business leaders weigh in on Covid-19 impression

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The coronavirus pandemic could boost newer modes of transport in China, such as making autonomous driving more mainstream, a panel of industry leaders told CNBC.

The Covid-19 outbreak accelerated the commercialization of autonomous aircraft – or driverless drones – used to transport goods, medical supplies and even passengers in and out of quarantine zones, Edward Xu, chief strategy officer at Chinese drone maker EHang, told Arjun Kharpal during the CNBC Evolve Virtual Global Summit on Wednesday.

Headquartered in Guangzhou, the company made headlines in 2016 when it unveiled a passenger drone concept.

Pony.ai self-driving cars drive on a road during a test run on February 1, 2018 in Guangzhou, China.

VCG | Visual China Group | Getty Images

“In the future, we will be working with … Chinese government officials to expedite the commercialization of our product,” said Xu, adding that the company has had two meetings with regulators and plans to have its passenger drones certified within two years.

The Chinese driverless car start-up Pony.ai has sent some of its unmanned vehicles to transport medical personnel to Covid-affected areas and to transport urgently needed goods. It showed people how new technologies can be used to fight a pandemic, according to founder and CEO James Peng.

“We can imagine that after the post-pandemic era people will become more familiar and comfortable with fully driverless vehicles and we are ready to move that forward,” he added.

Growing demand in urban mobility

While the pandemic made many commuters suspicious of public transport, some turned to personal mobility devices for their travels.

According to CEO Yan Li, the Chinese electric scooter manufacturer Niu Technologies recorded “great demand for individual urban mobility devices”. He said the company shipped nearly 150,000 e-scooters in the first quarter.

Read more about electric vehicles from CNBC Pro

Even after the pandemic, the trend should continue, according to Li. He said people in China would likely continue to commute on scooters as they offer more freedom compared to public transportation.

“We’re not seeing the trend of people using public transportation again. A lot of people are starting to get used to these custom mobility devices and I think that’s a good trend for us,” Li added.

Future challenges

According to industry leaders, the general adoption of autonomous vehicles faces a number of challenges. Pony.ai boss Peng listed three topics: technical progress, regulation and consumer acceptance.

It takes time for customers to get used to and understand that autonomous driving is indeed a safer and more convenient way of getting around.

“I think from a technical point of view we have made leaps and bounds in the last few years,” he said. Peng added that the company has received a fully driverless test permit in California and will soon also be granted in China.

Driverless vehicles have come a long way over the years as companies have repeatedly tested their technology to fix potential problems and prevent accidents. Still, public and regulatory safety issues remain a major hurdle on the road to mainstream adoption.

According to Xu from EHang, regulation is the “biggest bottleneck” for unmanned passenger drones.

An Ehang 216, a two-seat autonomous aircraft from the drone manufacturer EHang, can be seen at its presentation in Vienna on April 4, 2019.

Leonhard Föger | Reuters

“Because there is no regulation so far. There is no precedent in the past that would allow the AAV to fly over the city area,” he said.

“Right now the situation is becoming more and more convincing because we have carried out the test flights over 43 cities in 8 countries with more than 4,000 flights carried out,” added Xu.

Convincing passengers to take either driverless cars or autonomous passenger drones also remains a major obstacle.

“On that front, it takes time for customers to get used to how it feels (and understand) that autonomous driving is actually a safer and more convenient way to get around,” Peng said.

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