China set to become worldwide leader in automated driving market volume by 2035

For now, self-driving vehicles will remain in the realm of robotaxis that operate in specific geographies, the report said.

S&P Global Mobility estimates that fewer than 800,000 robotaxis will be sold and operating on worldwide roads by the middle of next decade. The majority, about 57 percent, will be in mainland China, the forecast said.

A lack of national regulations is not necessarily hindering deployments in the U.S., Carlson said. But China has developed a cohesive national strategy supporting deployments, one in which firms are accommodated with infrastructure improvements while individual companies work closely with city and regional governments in specific areas to fast-track commercial operations.

Chinese robotaxi provider Baidu, for example, has rapidly scaled its presence in Wuhan. The company operated five robotaxis there in August 2022 and has increased that to approximately 300 today. Wuhan is one of four Chinese cities where Baidu now operates.

S&P Global Mobility said technical and infrastructure challenges remain formidable in all global regions. Unlike some of the ups and downs in the U.S., with city officials in San Francisco expressing frustration about problematic behavior from self-driving taxis on their streets, there’s no signal of angst or retrenchment from China.

“I routinely ask our team in China, ‘Do we think there’s any resetting of expectations or a reality check that may take place,’ ” Carlson said. “They haven’t said yes yet.”

That’s particularly true at lower levels of automation — those defined as Level 2 or Level 3 by engineering standards organization SAE. Cars with these levels of automation continue to be the focus of industry development worldwide, the S&P report said.

Chinese auto companies are well-positioned to add automated features in greater number, in part because many have designed newer electric vehicle models from scratch. Cutting-edge electronic architectures make it easier to add more sophisticated automated systems. That has readied the country’s supply chain for a new generation of automated driving.

“There’s not a single company carrying this,” Carlson said. “We’ve seen more of the supply chain develop in China. It’s not just chip companies, it’s sensor suppliers and companies that have software running on those [systems on chip]. They’ve built a strong, broad-based supply chain.”

Across China and every other region, some commonalities remain. Driver-assist technology is still costly, and 63 percent of global vehicle sales in 2035 will contain no such technology or only basic driver-assist functionality, per S&P.

More sophisticated driver-assist systems — those that permit hands-off driving or allow for the vehicle to take responsibility for operations — will reach about 31 percent of new vehicles in 2035, according to the forecast.