Roadblocks stall Singapore’s driverless car dreams

Singapore has become Southeast Asia’s hotbed for autonomous vehicles (AVs), topping the list of KPMG’s Autonomous Vehicles Readiness Index in 2020. It traces its AV development back to 2014, and it’s the first country in the world to test self-driving taxi services. The technologically advanced city-state seems to be the perfect place for local driverless companies to spawn.

Photo credit: ake1150 / 123RF

Last month, Singapore launched a US$40 billion project to build the world’s biggest automated port that would feature drones and driverless vehicles.

Despite this push, very few AV players regularly test in the Singapore market, with most being large international players such as ComfortDelGro, Continental, and Hyundai-backed Motional. There are also only a handful of local names such as ST Engineering and MooVita.

Conversely, the US and China have seen several strides in innovation in the AV industry. General Motors’ Cruise is offering paid driverless rides to San Francisco passengers, while Motional is working with Lyft and Uber Eats for on-demand rides in Las Vegas and food deliveries in Los Angeles, respectively.

Meanwhile, Baidu transports nearly as many passengers with its driverless taxis as its normal cabs in Beijing. Earlier this year, Baidu and Pony.ai won the first-ever driverless robotaxi permits in China.

So why aren’t we seeing many local AV firms prosper in Singapore?

Running out of steam?

Worldwide, the early days of AV technology brought about significant investor interest. The technology proposed was disruptive and in a new domain – early financiers saw big potential returns. Investors were also still determining which firms were most credible, which meant that startups still had an equal, fighting chance.

Eventually, the lure of autonomous vehicles has slowed down, sources tell Tech in Asia. Stakeholders have realized that the long R&D process, slow return on investment, and tightening regulations complicate the process, making investors less liberal about dispersing funds. This has only worsened due to the pandemic.

Baidu shows off its driverless test mule BMW. / Photo credit: Baidu

Today, AV players must be able to sustain themselves through the intensive R&D period. This is why many startups have been absorbed by larger companies, such as Toyota’s acquisition of Lyft’s self-driving car unit, Amazon’s purchase of Zoox, and Aurora’s consolidation with Uber’s AV arm.

In 2021 alone, investments in AV tech companies reached US$12 billion in equity funding, up 50% from the previous year. However, most of that amount went into firms in the US and China.

A source tells Tech in Asia that funds awarded to Singapore-based AV companies are much smaller when compared to their counterparts in Silicon Valley.

Size does matter