China technology giant Tencent Holdings is recruiting self-driving car engineers in Palo Alto, the latest in a crowd of Chinese companies flocking to Silicon Valley. Of the 60 companies that have permits to test autonomous vehicles in California, 14 of them are from China.
Why it matters: China's aspiration to dominate the AV field is heavily dependent on R&D centers in Silicon Valley, where Chinese companies employ hundreds of software engineers and partner with critical U.S. tech suppliers.
Even though some companies don't even plan to deploy self-driving vehicles in the U.S., there's a certain cachet that comes from validating their technology and securing investment in California — the epicenter of AV research.
The 800-pound gorilla is Baidu, China's Google counterpart. Like Google, it has big ambitions in AVs. Baidu’s Intelligent Driving Group is based in Sunnyvale, Calif., and has 4 test vehicles on the road, with 2 more coming soon, a spokesperson tells Axios.
But there are others to watch:
- Pony.ai, cofounded by ex-Google and Baidu engineers, splits its headquarters between Guangzhou, China, and Fremont, Calif. The company has raised $214 million and claims a nearly $1 billion valuation. It already launched a self-driving taxi fleet in Guangzhou.
- Roadstar.ai, with headquarters in Shenzhen and Silicon Valley, develops technologies to quickly sync and interpret information gathered by different sensors on self-driving cars. Founded in May 2017, the company has raised $138 million.
- TuSimple, based in San Diego, is developing self-driving semi-trucks. Its specialty is long-range perception: trucks that can see 1,000 meters ahead, even in bad weather. The 3-year-old company has raised $86 million.
- Didi Chuxing, the Chinese ride-hailing service, employs more than 100 people at Didi Labs, its R&D center in Mountain View where they're developing AV technology.
The big picture: China aspires to have 30 million AVs by the end of the next decade and McKinsey estimates the market there could be worth $500 billion by 2030.
The big question: Do any of China's AV firms have the staying power to survive a global shakeout?
- China's government typically picks one or two industry champions to lead the way. Baidu is the one to watch. With its Apollo open-source development program, it has lined up more than 130 partners. Just in the last week, Baidu announced deals with 3 automakers: Volvo, Ford and China's First Auto Works.
- With so many companies working on self-driving car technology, consolidation is inevitable, Michael Ramsey, research director at Gartner Group, tells Axios.
The bottom line: China's leading self-driving startups are betting on leveraging talent and capital in Silicon Valley in order to grab those precious seats.
Go deeper: China races for global leadership in AVs
