Building Up Technology in Gangnam to Target Overseas Markets: "The Entire Market Could Be Lost" [Korean Autonomous Driving Surrenders Home Turf to China]

Widening Gap in Autonomous Driving Technology Between Korea and China
Domestic Companies at Risk of Falling Behind as Chinese Robotaxis Gain Ground

A PonyLink autonomous vehicle driving in the autonomous driving pilot zone in Gangnam-gu, Seoul. PonyLink

On August 18, following a PonyLink autonomous vehicle operated by the self-driving company PonyLink as it drove around the Gangnam-gu area of Seoul, the vehicle maintained a smooth ride throughout the journey. The technological prowess of Pony.AI, one of China's leading autonomous driving companies, was evident. While driving at around 50 km/h in the autonomous driving pilot zone on Seocho-daero in Gangnam, the vehicle reduced its speed to 10-20 km/h upon entering the back alleys of Nonhyeon-dong. In a section with three consecutive speed bumps, it slowed down further to about 15 km/h and drove carefully.

Even on Yeongdong-daero, where traffic was heavy on a weekday afternoon, the vehicle changed lanes smoothly and detected yellow traffic lights from a distance, braking like an experienced driver. According to the safety operator in the driver’s seat, except for a school zone near Hakdong Elementary School, there was no need to switch to manual driving during the 40-minute drive.

When the PonyLink autonomous vehicle makes a right turn following the vehicle ahead, the passenger tablet displays the traffic lights, surrounding vehicles, and current speed. PonyLink

The vehicle demonstrated a perfect understanding of Korea’s Road Traffic Act. In situations where several cars lined up to make a right turn, the PonyLink vehicle came to a complete stop before the crosswalk, as required by law. It waited until a pedestrian who was approaching from behind had fully crossed before making the turn.

To operate a robotaxi in Korea, companies must obtain autonomous vehicle operation approval from the Ministry of Land, Infrastructure and Transport under the Automobile Management Act. However, there are currently no institutional measures to prevent domestic companies from bringing in Chinese technology.

The Growing Gap Between Korea and China in Autonomous Driving

Concerns are mounting over PonyLink’s entry into the Korean market because Chinese autonomous vehicles, which possess more advanced technology than their Korean counterparts, could gain a competitive edge in data acquisition on domestic roads. The technological gap between Chinese autonomous driving companies and Korean startups is widening significantly.

Pony.AI has obtained autonomous driving permits in all four of China’s first-tier cities: Beijing, Shanghai, Guangzhou, and Shenzhen. The company currently employs around 1,400 R&D personnel and secured an investment of $240 million (333.3 billion won) last year. Although it began test operations in California in May 2021, these were halted after six months. Since January, the United States has prohibited the sale and import of passenger vehicles that integrate hardware or software for connected cars and autonomous driving systems produced by Chinese or Russian companies.

Not only Pony.AI but also Baidu, which is seeking to enter the domestic robotaxi market in partnership with Kakao Mobility, poses a significant threat. Although Baidu entered the business later than Google’s Waymo, a leader in autonomous driving, it succeeded in commercializing fully unmanned robotaxis in 2022, demonstrating its technological capabilities. Currently, Baidu operates nearly 1,000 robotaxis in major Chinese cities such as Wuhan, Chongqing, Beijing, and Shanghai, with cumulative rides exceeding 5 million.

Autonomous Driving Technology Stages

Inevitable Decline of Domestic Autonomous Driving: A Matter of Time

If robotaxi services become widespread, led by Chinese companies with advanced technology, domestic autonomous driving companies will inevitably be pushed out of the competition. As the ecosystem shifts to focus on Chinese vehicles and parts, the damage could spread to Korean automobile and parts manufacturers. An official from an autonomous driving company, who requested anonymity, stated, "Kakao Mobility currently holds over 1,000 taxi licenses, and if these are converted to Chinese robotaxis, it will have a significant impact."

With economies of scale, the amount of data that can be collected increases dramatically. PonyLink plans to add six more autonomous vehicles as early as August or September, bringing the total to ten for ongoing test drives in the Gangnam area. The company aims to launch a robotaxi service for actual customers within the year. If PonyLink begins operating robotaxis in Gangnam, it will become the second operator after SWM, which introduced late-night autonomous taxis in September last year. PonyLink also plans to launch autonomous buses and 35-ton class robotrucks next year.

Industry experts have raised concerns that Chinese robotaxis could become "moving CCTV cameras." There are worries that all road information could be collected via cameras and that domestic data could be used as leverage. Robotaxis not only collect and analyze mobility data but also geographical and personal information. Experts argue that, similar to key industries like telecommunications or electricity, where foreign market entry is restricted, the government should establish a system to manage information or require high-level information management capabilities.

Professor Kim Pilsoo of Daelim University stated, "If domestic big data is allowed to be used overseas, in the worst-case scenario, the protection of domestic personal information may not be guaranteed."

Baidu's autonomous vehicle 'Apollo Go'

There are also arguments that future mobility technologies such as autonomous driving, which are directly linked to the automotive industry-a key national industry-require careful consideration of the risks posed by the entry of foreign technologies into the domestic market. An industry official said, "If taxis, buses, or trucks equipped with foreign autonomous driving technology were to suddenly stop due to variables such as international disputes, it would cause major disruptions. Unlike mobile technologies from companies like Google or Apple, losing control over mobility technology could result in significant physical damage." The official added, "If the core technology is not developed in-house, it is difficult to detect hidden backdoor programs, increasing the risk of hacking."

A PonyLink representative explained, "All data, including high-precision maps, are stored on Korean cloud servers and are never transferred overseas. Only in the event of an accident or unusual occurrence do we send five seconds of data before and after the event to Pony.AI; all other information is managed domestically."