Off the Map: The Rough Road Ahead for Self-Driving Cars in China

By Liza Lin in Shanghai and Tim Higgins in San Francisco Features Dow Jones Newswires

As auto makers such as General Motors Co. and Ford Motor Co. along with tech companies including Google and Apple Inc. rush to develop self-driving vehicles or the software behind them, the world's largest auto market--China--is creating roadblocks.

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Self-driving cars need detailed maps to help them discern their exact location, navigate tricky intersections and avoid fixed objects like buildings. But China limits the amount of mapping that can be done by foreign companies, citing national security concerns.

Global car makers already need to partner with a local company to open factories in China, but some are skeptical they will be able to find a way to operate their autonomous-car software in China because of the mapping restrictions.

Brian McClendon, an industry pioneer who helped created Google Maps and later headed up Uber Technologies Inc.'s self-driving effort, said he doubted U.S. software would ever be adopted for self-driving cars in China.

"We're going to have a bifurcated market for self-driving--China will do China and the U.S. will do U.S. and the rest of the world will quickly choose and do one or the other," said Mr. McClendon, now a research professor at the University of Kansas.

To secure turn-by-turn navigation maps, foreign car makers currently work with Chinese mapping companies. But auto makers and tech firms may have reasons to hesitate before working with a third-party map provider in China on the high-definition maps needed by autonomous cars.

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James Wu, co-founder of U.S. mapping startup DeepMap Inc., who formerly worked at Alphabet Inc.'s Google, Apple and China's Baidu Inc., said ownership of mapping data is crucial in self-driving cars.

"If a non-Chinese company works with a Chinese local map company with a license, then who owns the data? Who would be responsible for safety issues, privacy issues, security issues associated with the map data? It is a pretty messy problem to sort out," Mr. Wu said.

GM, Apple and Ford declined to comment on the issue of mapping data in China. Alphabet's autonomous-driving unit, Waymo, didn't reply to an email seeking comment.

Earlier this year, Li Shufu, founder of Geely Automotive, the Chinese auto maker that owns Volvo, urged the National Committee of the People's Political Consultative Conference to relax the mapping barriers, which he cautioned could hurt the country's development of self-driving vehicles.

Unless his call is heeded, foreign tech and car companies will need to work with one of 13 Chinese companies licensed by the government for surveying and mapping. The three largest are Baidu, the AutoNavi unit of Alibaba Group Holding, and NavInfo Co., which is backed by Tencent Holdings.

German auto supplier Robert Bosch GmbH, for example, announced a partnership this spring with Chinese mapping firms including Baidu and AutoNavi to co-operate on high-definition maps there.

"The market with regards to maps in China is quite strongly regulated, which is different from other countries," said Renaud Bonhomme, director of advanced innovation and system engineering with a Robert Bosch unit in China.

South Korea's Hyundai Motors also announced recently it would use Baidu's maps in its vehicles sold in China, and said it is exploring joint efforts into autonomous driving technologies with the Beijing-based company. Baidu claims its high-definition maps have collected data from 300,000 kilometers of highway in China.

The Chinese companies are considered to be far behind Waymo, which launched in 2009 and has already chalked up more than three million miles of autonomous driving on public roads in the U.S. Baidu started its autonomous-driving research in 2014 and claims its high-definition maps have collected data from just 300,000 kilometers of China's nearly 5 million kilometers of roads.

German mapping provider HERE, owned by automakers Audi, BMW and Daimler, will bring its maps to China after receiving investment and forming a 50-50 joint venture with Navinfo last December.

Meantime, GM, Volvo and Daimler are in talks about possibly using high-definition mapping technology in China from Autonavi, according to a person familiar with the situation.

Mapping restrictions play out in a small scale today with Google's connected car platform Android Auto. Despite a rollout in 31 markets world-wide, Google's platform, which connects smartphone applications to a car's dashboard, isn't available in China.

Google's services, including Google Maps, are restricted by China regulators, resulting in a bad user experience for Chinese consumers, said Colin Bird, a senior analyst at IHS Automotive.

The California-based technology giant currently has only a local partnership to provided maps for desktop computers in China, and gaining permission to expand that to smartphones, cars and other uses could be problematic given the company's stormy departure in 2010 over government censorship of its search engine.

Further hurdles await foreign software and car companies beyond maps. They are likely to face difficulty gaining approval to conduct test drives in the country, as the government will seek to support its domestic enterprises, said Li Zhishan, an auto technology analyst at Analysys in Beijing.

Industry watchers say the situation is another reminder of the dilemma facing Western countries: China is too big to ignore, but there is always a price for a seat at the table.

"Once again, China uses leverage to lock in a competitive advantage, and can do so because they know everyone wants market access," said Michael Dunne, president of Hong Kong-based investment advisory firm Dunne Automotive.

Mike Colias in Detroit and

Wang Fanfan

in Beijing contributed to this article.

Write to Liza Lin at Liza.Lin@wsj.com and Tim Higgins at Tim.Higgins@WSJ.com

(END) Dow Jones Newswires

July 13, 2017 05:44 ET (09:44 GMT)