Funding Shortages and Tight Regulations... Domestic Autonomous Driving Faces Crisis [Autonomous Driving Ceded to China]

Low Technology Adoption and Limited Capital Market
Difficulties in Attracting Investment for Korean Autonomous Driving
High Costs of Purchasing Advanced Development Equipment
Commercialization Hindered by Positive Regulatory Environment
Social

The domestic autonomous driving industry is facing difficulties such as a lack of funding, a positive regulatory environment, and negative public perception of autonomous driving. Industry insiders agree that there is a need to establish a foundation for business operations by providing customized technical support or creating opportunities to participate in government-led artificial intelligence (AI) projects.

The autonomous driving industry cites funding shortages as its biggest challenge. Using the open automotive software "Autosar" alone costs 500 million won per year in licensing fees. Additionally, purchasing a finished vehicle and equipping it with sensors such as cameras or LiDAR to create an autonomous vehicle requires hundreds of millions of won. When conducting pilot operations to collect autonomous driving data, additional expenses for driver wages and operational costs are incurred. For these reasons, the industry argues that subsidies, tax benefits, and support for vehicle modification costs are needed to help companies survive until commercialization.

Recently, the demand for funding has surged. This is largely due to the rising costs of essential equipment for autonomous driving operations, such as graphics processing units (GPUs) and high-bandwidth memory (HBM). Operating a Level 4 robotaxi requires dozens of sensors that generate more than a terabyte (TB) of data per second in real time. To process this, at least 2,000 TOPS (trillion operations per second) or more of HBM is required. An industry official stated, "Tesla and Waymo have 5,000 TOPS-class platforms, but for domestic startups, this is out of reach."

It is estimated within the industry that even Elon Musk in the United States owns more than 200,000 high-performance GPUs. Tesla reportedly owns about 35,000 units, while xAI, the AI research and development company founded by Musk, is said to have more than 200,000 units. In contrast, the number of the latest GPUs in South Korea is around 2,000. The goal is to secure 10,000 units within this year and 50,000 units by 2030. The industry is also looking forward to actively utilizing the "AI Highway" initiative that the Lee Jaemyung administration is accelerating. An industry official commented, "If we can use the AI Highway, domestic technology could also grow rapidly."

The industry also agrees that efforts to improve social perception of robotaxis are necessary. This is because the cases in the 2010s when ride-hailing services such as Uber or Tada were blocked due to opposition from the taxi industry could easily be repeated with robotaxis. This is also why venture capital firms are reluctant to invest in robotaxis. The CEO of an autonomous driving company said, "If robotaxis are fully launched in Korea, taxi drivers will naturally feel that their jobs are being taken away," adding, "A collective social effort to address this concern is needed." He explained that, in the long term, as the population declines and the number of public transportation workers decreases, the role of robotaxis will grow, and this consensus will help improve public perception.

Regulatory reform is also needed. In Korea, even when permitting Level 4 unmanned autonomous driving without a driver, "positive regulation" is applied, requiring companies to "provide additional safety measures" or "ensure that a person is always present in the passenger seat." However, for those working in rapidly changing new industries, the "positive approach" can feel restrictive. If every permissible regulation must be specified, the system cannot keep up with the fast pace of technological change. In contrast, the United States and China allow unmanned autonomous driving in designated areas as long as prohibited actions are not violated. If an accident occurs, post-incident investigations and sanctions are conducted.

Furthermore, in Korea, remote driving for autonomous vehicles is highly restricted. As a result, it is impossible to respond immediately in emergency situations. In May, as part of the regulatory sandbox, a special exemption for remote control safety standards was granted in the vehicle-sharing service sector, but the industry believes it will take considerable time before remote control for autonomous vehicles becomes possible on public roads.

Another obstacle is that, under current regulations, autonomous driving is not permitted in child protection zones or senior protection zones. This prevents the creation of diverse autonomous driving routes. An industry official lamented, "In Korea, even a single minor accident can create such a strict social atmosphere that a company may have to shut down," adding, "For this reason, the government continues to leave regulatory clauses in place to avoid responsibility even as it grants permits."