China: ADAS to Self-driving Cars – The Journey Starts

The move towards self-driving cars is relentless and China as the world’s largest auto market and a leader in internet technologies wants to be at the cutting edge of this revolution.

That self-driving cars is a huge potential market seems clear. On March 3, 2017, IHS Markit, the leading automobile market intelligence firm, published its latest Advanced Driver Assistance Systems (ADAS) Applications and Sensors Report[1]. This report noted that the global ADAS market is set to explode and surpass 302 million units annually in 2022 – which would be a nearly 200% increase over the 2016 numbers. This growth is mostly driven by advances in sensors technology that can be combined to provide better automated driving and includes aftermarket ADAS solutions for existing vehicles.

The importance of sensor technology is also shown by Intel’s acquisition of Mobileye for USD15.3 billion — the largest ever acquisition of an Israeli hi-tech company.[2]

Mobileye is the leading supplier of software that enables ADAS and already has partnerships with some of the world’s largest automakers.[3] The acquisition illustrates not just that hi-tech computing and internet companies have automotive ambitions but also the importance of ADAS for autonomous driving. ADAS is one of the fastest-growing sectors in the automotive field in recent years[4] and is considered by most commentators to be an essential milestone towards automated driving.

However, even if self-driving cars will not be standard in the very near future the safety applications of ADAS will be. One example is that the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) has mandated that by May 2018 all new vehicles weighing less than 10,000 pounds and sold in the United States must have ADAS installed rear visibility technology.[5] In addition, the NHTSA also announced that 20 automakers, representing more than 99 percent of the U.S. auto market, had committed to making automatic emergency braking systems standard for nearly all vehicles by September 2022.[6]

Accordingly, ADAS is no longer decoration but rather a very real disruptive force for the auto industry.

What is ADAS?

ADAS is generally understood to be systems developed to automate/adapt/enhance vehicle systems for safer and better driving. It is also sometimes known as level 1 autonomous driving. These include safety features designed to avoid collisions and accidents by offering technologies that alert the driver to potential problems or avoid collisions by implementing safeguards and taking over control of the vehicle.[7]

ADAS features include adaptive cruise control (ACC), forward collision warning (FCW), automatic emergency brakes (AEB), pedestrian protection system, lane departure warning (LDW), intelligent speed adaption (ISA), alcohol drug ignition interlock, automotive night vision, blind spot monitor and driver drowsiness detection.

These are all laudable features for safe driving but to make this possible ADAS requires vision and range sensors that are able to accurately make situational assessments and implement actions. Common sensors for ADAS include video, radar, LIDAR[8], ultrasonic and infrared (IR). ADAS takes many forms with some features built into cars or available as add-on packages. There are also aftermarket solutions available such as Mobileye’s aftermarket warning-only system that can be retro-fitted to any existing vehicle.[9]

Current PRC legal regime for aftermarket ADAS products

Although market, demand and the technology for ADAS is in place in China and manufacturers are ready to introduce such systems the widespread adoption has been slowed by the sluggish pace of regulations.

This article focuses on the main legal issues for aftermarket solutions under the current PRC legal regime.

As mentioned above, ADAS has two core features. One is to warn (e.g. LDW, the systems will warn the driver when the vehicle begins to move out of its lane unless a turn signal is on in that direction on freeways and arterial roads) (“Warning Function”) and the other is to control (e.g. AEB, where systems may automatically apply brakes to assist to prevent or reduce the severity of an impending forward crash with another vehicle) (“Controlling Function”).

Aftermarket solutions refer to solutions provided by ADAS products (e.g. video camera and range sensors or independent devices) that are installed or retro-fitted onto existing vehicles (e.g. sensors installed on the front, side or top of a vehicle) to provide these two ADAS core features of Warning Function and/or Controlling Function (“Aftermarket Solutions”).

As the technology is innovative it is natural that the legal regime has difficulty in keeping up – the PRC legal regime is no exception. Under current PRC law, Aftermarket Solutions for ADAS will likely face both legal barriers as well as liability issues.

1.Vehicles Refitting Restrictions under PRC Law

In China, motor vehicle ownership is tightly controlled and requires registration in order to obtain a license plate and driving certificate. In addition PRC law prohibits changes to a vehicle without permission and also requires updating of the registration if certain features of a car are altered.

The current regime does allow some limited retrofitting to be carried out without registration. Alterations that can be done without registration include installation of front and rear anti-collision devices on small cars or installation of tertiary items to freight vehicles, such as water tanks or tool boxes.

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