From smart electric vehicles to robots – The Diplomat

Over the past decade, China has spent more than that $100 billion to stimulate the growth of the intelligent electric vehicle (IEV) industry. Consequently, China now owns the most sophisticated IEV supply chain and is the largest IEV market in the world. While the dominant argument is that China has made this investment reduce greenhouse gas emissionsI argue that this investment is having a much more profound impact on the Chinese economy. The IEV supply chain, including its talent pool, technologies and manufacturing capabilities, will shrink to empower various segments of the robotics and automation industry, thereby accelerating China’s economic transformation in the automation era.

In the context of globalization, the Chinese economy has benefited from its huge supply of cheap labor by serving as a factory of the world. However, as labor costs rise and its population ages rapidly, China may no longer enjoy that demographic dividend. Indeed, many companies are in movement their factories outside China. To avoid falling into middle income trapa structural change in the Chinese economy is imperative.

Historically, only a few countries have managed to escape the middle-income trap, and no country with an aging population has ever succeeded. However, traditional theories of economic structural change are human-centered, such that human labor is the source of productivity. Today, technological innovations allow robots to handle many agricultural, industrial and service tasks. As robots become more ubiquitous in our daily lives, robots can be a source of productivity and thus, robots can save China from the middle income trap. Indeed, we have seen various forms of robots integrating into the Chinese people’s daily life, whether it is a food delivery robot on the street or a cleaning robot at home.

For China’s economy to transform into the age of automation, a complete supply chain of robotic technology needs to be developed. Key components of this supply chain include artificial intelligence (AI) software, batteries, sensors, computer chips and servo motors. All these components are also required in IEVs, albeit with a higher volume and more stringent technical requirements. China’s massive investment in the IEV industry has generated fierce competition in these technical areas, which will lead to over-provisioning of production capacities and rapid cost decline. As a result, the robotics and automation industry will benefit to produce effective and cost-effective robots.

Let’s now look at the key components of the robotics technology supply chain. The figure below compares the market share of the robotics technology supply chain between China and the United States.

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First, both the United States and China have the advantage AI talent, with China accounting for 32.3% and the US accounting for 44.2% of global AI talent. It is no coincidence that many AI talents work in IEV companies, such as Tesla in the US and Baidu in China. From my personal experience, in China, AI talent mobility is very active between the IEV industry and the robotics and automation sector, as many AI technologies developed for IEV can also be used for various types of robots. This is also verified by Tesla’s recent move to produce Tesla robots.

While the United States currently leads the way in AI talent, recent trends may change that. China generates more STEM graduates compared to the United States, and more and more technological talents are come back into China from the United States and Europe. With a thriving IEV industry and a promising automation and robotics sector, China could soon develop the largest AI talent pool in the world.

As the global factory in the mobile phone era, many Chinese companies have become key suppliers of iPhone, especially battery companies. As a result, China already is dominant the global battery market, supplying over 56% of the world’s batteries. In comparison, because battery manufacturing is considered a high-polluting industry, the United States has outsourced most of its battery manufacturing overseas. Realizing this problem, the US government is trying to bring battery manufacturing back through the Inflation Reduction Act of 2022.

Sensors, especially LiDAR sensors, are essential for IEVs and robots. Although US companies are pioneers in sensor technologies, Chinese sensor suppliers have experienced tremendous growth in recent years, benefiting from the booming Chinese IEV industry. Today, Chinese sensor suppliers own 26 percent of the global market, while US companies own just 3%. Furthermore, Chinese suppliers continue to grow rapidly, while the market share of US companies continues to shrink.

Servo motors determine the accuracy and controllability of robots, especially industrial robots. Japanese manufacturers dominate this area due to their technological advantages, but Chinese manufacturers have grown rapidly due to their cost advantages. Today, Chinese manufacturers have a 30 percent share of the global market while the US presence is almost negligible. Similar to how the Chinese IEV industry has spurred the growth of the battery and sensor supply chain, it is reasonable to expect that Chinese servo motor suppliers will grow rapidly with the Chinese robotics and automation industry and gain global market share in the future. near future.

While China’s booming IEV industry has spurred growth in many technical areas, computer chips have always been China’s weak spot. Today the United States again dominates the global microprocessor market, especially high-end AI processors. Realizing the strategic importance of microprocessors, the US Congress recently passed the CHIPS and Science Act of 2022 to further strengthen domestic semiconductor production, design and research. In addition, the newly opened Taiwan Semiconductor Manufacturing Company of a new plants in Arizona is another big win for the US semiconductor industry. Without a supply chain of advanced microprocessors, China still has to rely on US supply to support the growth of its robotics and automation industry in the foreseeable future.

In summary, China’s huge investment in IEV industry will not only make China greener, but more importantly, accelerate China’s economic transformation in the automation era. Examining supply chains reveals that China has acquired, or is about to acquire, dominance in many key technology areas of the robotics and automation industry. If this trend continues, we could soon find ourselves in a world powered by Chinese robots.