Tesla gains license to manufacture in China

What lies ahead for the autonomous vehicle (AV) industry with the opening of Tesla's first manufacturing facility in China. 
21 October 2019

Tesla Motors Assembly Plant in Tilburg, Netherlands. Source: Shutterstock

Tesla has received full approval to operate in China and its first manufacturing facility is based in Shanghai.

The full-scale plant costs approximately US$2 billion and is ready to operate at any moment’s notice with the license to operate now at hand. 

With already 24 stores operating across China, the American automotive company aims to start operations at the Gigafactory Shanghai by the end of this year.

Tesla carries big plans and high investments in its venture in China; it announced the production of a more cost-effective, energy-efficient version of Model 3 line with 150,000 units rolling out each year.

The stated production marks the second generation of Model 3, which was a popular choice in the Netherlands.

In its second-quarter update for shareholders, Tesla stated the potential of the electric vehicle industry in China and promoting the Model 3 line as an economical option to the Chinese market: “Given Chinese customers bought well over a half a million mid-sized premium sedans last year, this market poses a strong long-term opportunity for Tesla.”

Tesla’s venture into the Chinese market marks a significant milestone of the automotive company, yet its vision to commercialize self-driving cars is still a work in progress.

Nations racing to lead in the AV industry

By 2024, the global autonomous vehicle market will rise to US$172.3 billion, according to research and market insights

Nations are competing to commercialize and mass-produce self-driving vehicles within the next few years and many are transiting from deploying semi-automated vehicles (level 3) to fully automated vehicles (level 4).

According to the Society of Automotive Engineers, there are five levels of autonomous technology whereby level 3 refers to drivers taking over the vehicle when needed and level 4 indicates a vehicle that is fully autonomous in certain conditions (at certain speeds and terrains). Level 5 is the ultimate level of autonomy, capable of handling any road condition with human oversight. 

South Korean President Moon Jae-In predicted, “self-driving cars will account for half of all new cars on South Korea’s roads by 2030.

“So far, the policies related to self-driving have been based on Level 3 (autonomy), but we now aim to commercialize fully automated driving cars in Level 4 by 2030.”

Despite the positive outlook on commercializing automated vehicles as Elon Musk once envisioned Tesla to produce reliable self-driving cars by 2017, the reality is fully autonomous vehicles still require vigorous testing and development.

For example, Tesla’s employment of computer vision technology “Smart Summon” on training autonomous cars faces progress and setbacks at the same time.

Computer vision technology allows the car model to ‘make sense’ of images it sees, often the content presented consists of common encounters on the road such as a stop sign, traffic light, zebra crossing, and pedestrians. The technology relies on deep learning algorithms to interpret multimodality content and execute an appropriate course of action.

It is reported that Smart Summon can execute simple acts such as exiting a parking lot, avoiding obstacles and pedestrians and slowing down in traffic.

Even so, there are concerns about the performance of autonomous vehicles in crowded, congested areas in which the limitations of autonomous vehicles clearly exhibits, where the technology still needs further testing and development to ensure it can respond to unexpected situations, such as a child running into the street or a speeding car appears. 

Self-driving cars may thrive in a controlled environment where road encounters are within the ‘predictions’ of the algorithm.

These are the pressing issues in the development of autonomous vehicles, but in a larger sense, the benefits of autonomous vehicles in the public domain drives industry leaders to speed up their delivery, while prioritizing safety. 

With ongoing support from government bodies and authorities, the deployment of autonomous vehicles on public roads is set to the right path, though a discernible ‘due date’ remains so far out of reach.