Vehicle production has long been a symbol of national technological prowess and the manufacturing capability of countries such as the United States, Japan and Germany in the 20th century. As a result, China’s rapid global expansion in electric vehicles (EVs) in recent years has been a hot topic.
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While the winner of the EV competition is yet to be determined, the next chapter of the contest is to achieve autonomous driving, which relies on artificial intelligence (AI), semiconductor technology and data-driven intelligence. This underscores a broader geopolitical contest where leadership in this domain equates to shaping the global balance of tech power.
Progress in autonomous driving is continuing steadily. The Society of Automotive Engineers categorises automation from Level 0 to Level 5, with Level 0 involving full human control and Level 5 representing complete machine control. Currently, Tesla operates at Level 2, or partial automation.
Some companies have blamed regulation for keeping them from achieving Level 3 certification. So far, Level 4 automation is primarily seen in robotaxis approved for experimental services, such as Waymo in Phoenix, Arizona, and Baidu’s Apollo Go in Wuhan. As of the end of 2024, no commercial vehicle has been certified for Level 5 automation.
The US currently has an advantage when it comes to the development of AI chips for vehicles. Although Chinese companies have shown excellent performance in the global EV market, only 10 per cent of the chips used in vehicles made in China are developed domestically, with the other 90 per cent imported from the US, Europe and elsewhere. This has raised valid concerns that the US could tighten restrictions on the export to China of AI chips used in vehicle manufacturing.
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These high-end chips are difficult to develop independently. By limiting Chinese access to such critical technologies, the US could weaken China’s competitive edge in the global EV market. This aligns with broader US efforts to curb China’s technological rise in sensitive sectors such as AI and semiconductors.