By YU Hao

When Xiangtan University students need something delivered to their dorm, they place an order through a mobile app. Soon enough, a yellow van drops off the package. The driverless AV can carry 500 kilograms of goods, navigate among bikers and pedestrians and stop at traffic lights. It is no surprise that college campuses have become the testing ground for autonomous deliveries. Speed is low, demand is high. Similar vehicles can now be seen on over 200 of China’s college campuses. Tech companies have also been running pilot programs in wealthy suburbs.

Rewrite the rulebook

Autonomous delivery vehicles are now almost cheap enough to replace human workers, though plenty of obstacles remains to their widespread use. For one, traffic laws will have to be rewritten.

Vans made by Neolix can make 200 deliveries a day, said JIE Jinhua, partner of the company. On some college campuses, the number can be as high as 300, and the industry is on the cusp of mass deployment.

Startups like Neolix are expanding quickly. JD Logistics has a fleet of a thousand AVs. Alibaba has completed well over 100 million autonomous deliveries in 22 provinces. Meituan expects autonomous vehicles to be cheaper than humans across the board within five years. But others are less enthusiastic. TAN?Yun, an executive at the artificial intelligence company Xingshen Intelligent Technology?estimated that mass deployment is only viable at a cost of around 80,000 yuan (US$12,500) per vehicle, far less than current costs.

“In 2019 the average cost of an autonomous van was about a million yuan. In 2020, the number halved, to about 500,000. Now the most cost-efficient companies can make vans at less than 300,000 yuan per vehicle,” said HOU?Jun of the autonomous driving company Haomo. Hou expects costs to fall below 100,000 yuan by the end of the year.

There is an intrinsic conflict between scaling up and customization. Startups tend to adapt their vans to each customer’s specifications, no matter how small the order is. Production costs can be astronomical, so startups tend to partner with tech giants rather than compete with them. They focus on specific aspects of design or technology without the need to produce entire vehicles. Others are backed by automakers. Haomo is backed by Great Wall Motors, and contracted to Meituan.

Chip challenge

Tech giants like to draw the autonomous driving future as a utopia ripe with opportunities for everyone. During the release of Meituan’s Modai 20 last July, the company painted an imaginative backdrop of a smart city with autonomous vehicles whizzing hither and thither. Meituan describes a flourishing ecosystem of developers and manufacturers. But the infrastructure, of course, would be provided by Meituan, who will also dictate terms.

At the end of the day, it all comes down to lowering the costs. Tan Yun is confident that the 80,000-yuan-per-vehicle threshold is achievable within a reasonable time frame, “given that chip makers recover from the global supply chain crunch.” Jie Jinhua expressed similar views. “Everyone is at the beginning stage. Whoever can lower the costs will win,” he said.