China’s self-driving car revolution is already gathering speed at home. Now the country’s leading autonomous car makers are spreading abroad.

Take Guangzhou-based WeRide. Its robobuses ferried passengers between event venues at the French Open tennis in Paris in May, and carried VIPs attending a major international investment forum in Riyadh last October. By the end of this year, its robosweepers will be cleaning the streets of Singapore around the clock. 

Strong support from regulators, including the rollout of pilot schemes across the country this year, has already helped leading firms like WeRide and Pony.ai expand in China’s domestic market. Such companies now see an opportunity to expand overseas, particularly in places where competitors are few and potential revenue growth high. 

Experts say there is demand in many countries for sophisticated transport solutions like self-driving taxi fleets, which can improve traffic flow and reduce congestion. The question is whether Chinese companies can convince enough foreign governments to trust them — especially given concerns over how they gather and use personal data. 

“[Chinese carmakers’] early expansion efforts have allowed them to establish a presence and gain valuable experience in diverse environments, which could differentiate them from competitors,” says Mohit Sharma, an analyst at market research firm Counterpoint Research. But to succeed, “they will need to adapt to local regulations, environmental conditions, and cultural differences while addressing technical challenges unique to each region.”

Chinese autonomous vehicle [AV] companies have so far benefited from tax exemptions and subsidies for research and development, as local governments race to usher in a driverless future. But the country’s recent move to open up more roads for testing is giving them the most important thing they need: real-world data. 

Chinese authorities have to date issued 16,000 licenses for autonomous vehicles to test on over 32,000 km of roads across 16 cities, the Ministry of Public Security announced last week. In the city of Wuhan, for example, Apollo Go — owned by tech giant Baidu — now runs a fleet of 400 fully driverless robotaxis, offering rides with a base fare of just 4 yuan ($0.56): The company aims to double its number of cars by the end of the year. In pilot zones in Beijing, companies are meanwhile taking advantage of existing infrastructure, such as the city’s network of surveillance cameras, to help autonomous vehicles navigate freeways and intersections.

“China is now testing more robotaxis than any other country in the world,” says Sharma. 

Such testing allows the vehicles produced by Chinese startups to rack up the miles they need to train and improve their autonomous driving systems, which in turn is helping them catch up with U.S. companies such as Cruise and Google’s Waymo. 

Artificial intelligence plays a crucial role here. The more data companies can gather through testing, the more they can feed into generative AI models which “opens up the possibility that you simply train the virtual driving system by observing how human drivers react,” says Stephen Dyer, co-leader of the Greater China practice at consulting firm AlixPartners.  

“There’s a little more risk-taking appetite among some of the Chinese players, which allows them to go fast,” he adds.

Influential figures such as Miao Wei, a former minister of industry and information technology, have recently encouraged Chinese automotive companies to shift their focus to foreign markets. 

“In many countries, such as Singapore and those in the Middle East, governments want to build smart cities and have more modernized transportation systems. So there’s definitely a demand out there,” says Jason Low, an analyst at market research firm Canalys. 

WeRide says it is eying potentially lucrative markets in the Middle East, South America and North Africa. Meanwhile startup Pony.ai has formed strategic collaborations with the likes of Japan’s Toyota to produce and deploy cheaper robotaxis at a larger scale. It secured a $100 million investment from Saudi Arabia’s NEOM Investment Fund last October to build a fleet of robotaxis in the region, and teamed up with South Korean tech company GemVaxLink in March to put its cars on the roads of Seoul. That same month, Pony.ai announced plans to build a regional hub in Luxembourg. 

“There’s a global demand for cheaper, more reliable, and safer mobility options,” said James Peng, chief executive of Pony.ai, at a conference in London in June.

Chinese AV companies are aware of market gaps they can fill, says Ricco Kampfer, team lead in autonomous driving at the consultancy P3. In Europe, for instance, Israeli company MobilEye is currently the only autonomous driving company in operation. “There’s a huge chance for [Chinese companies] to get a foot in the door and be a main player,” says Kampfer. 

Yet there’s a catch. The extent to which foreign markets open up to Chinese companies will also come down to the issue of data. 

The information autonomous companies gain in domestic markets may not be wholly applicable in other countries, where traffic systems and customs differ. “Once companies hit a saturation point, they need local data to fine tune their technology towards a specific market,” says Shaoshan Liu, a co-founder of PerceptIn, a California-based autonomous vehicle company. 

[AVs] can be seen as intelligence gathering. That data, including data on consumer behavior, is intended to be shared with the headquarters so that they can continuously improve algorithms for autonomous driving.

Stephen Dyer, co-leader of the Greater China practice at consulting firm AlixPartners

This is where things might get tricky. Autonomous vehicles gather information about the environment via many sensors, including cameras, light detection and ranging systems, and radars. 

“They can be seen as intelligence gathering,” says AlixPartners’ Dyer. “That data, including data on consumer behavior, is intended to be shared with the headquarters so that they can continuously improve algorithms for autonomous driving.”

In turn, that’s raising national security concerns in countries already sensitive about Chinese data gathering by Chinese-owned social media apps like TikTok. A group of U.S. lawmakers last year wrote a letter to Chinese companies questioning them on how they handle data collected during tests on American roads. Reuters reported last month that the Biden administration plans to ban Chinese software in autonomous vehicles, a move that could seal off the American market to Chinese robotaxis. 

WeRide’s attempt to go public in the U.S. has stalled amid the scrutiny. The company, which had planned to raise up to $440 million last month, postponed its initial public offering days before the event, citing the need for more time to complete necessary documents. Pony.ai has also been quiet about any U.S. IPO, even though the Chinese authorities have greenlit the plans. 

Pony.ai declined to comment. WeRide referred to its latest filing, which noted that “the U.S. will not be a market for our products.”

“Commercialization of these Chinese AV companies outside of the country will likely happen first in more favorable geopolitical markets, such as the Middle East,” says Lei Xing, a Chinese EV expert. Others see Chinese companies and their Western counterparts dividing the global market along geopolitical lines. 

There is still a chance Chinese companies can overcome data-related hurdles in Europe, says Kampfer, but they will “have to at least prove that all the data will be kept in [the continent] and that nothing goes to the Chinese government.”

Despite the current momentum, the road ahead for Chinese robotaxis may be long and winding, as Robin Li, chief executive of Baidu, seems to agree. Despite hitting a milestone in cost reduction, “our share in the entire ride-hailing service market is very small,” Li said in an earnings call last month. “It will take many years for us to reach a meaningful market share in China or elsewhere.”

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