Increasing need for real-time cloud computing and fast cloud-car communication is creating a market for 5G-enabled connected cars. Counterpoint estimates that one out of every four connected cars sold in 2025 will have embedded 5G connectivity. China will account for a majority of such cars sold in the next five years.

The Chinese government support for 5G is the key factor responsible for making the country the preferred place for automakers to launch 5G connected cars. China’s top-down approach and the ability to bridge public-private divide through state-owned enterprises is speeding up 5G deployment. Clear road map and investment from the government is creating an environment for 5G that has not been seen anywhere else in the world. For instance, China plans to issue US$535.6 billion (RMB3.75 trillon) special purpose bonds in 2020 to promote development of strategic infrastructure, including 5G network. Furthermore, 5G R&D is being promoted for the last many years.

Initiatives Taken by Chinese Government During Last Decade

Push from state-owned telecom operators

The three big telecom operators in China – China Mobile, China Unicom and China Telecom – are expected to invest around $184 billion in 5G network by 2025. All the three operators support cooperation in the ecosystem.

• In 2016, China Mobile along with its 11 partners launched 5G Joint Innovation Centre to promote industry collaboration.
• In 2018, China Mobile partnered with Baidu for the Apollo open source software platform for autonomous driving.
• In 2017, China Unicom, ZTE, Datang, FAW and Ford entered a collaboration for pre-crash warning for pedestrians.
• In 2019, China Unicom and Chery signed an agreement to expand their partnership for 5G, connected and autonomous vehicles.
• In the 2017 Mobile World Congress, China Mobile, SAIC Motor and Huawei demonstrated the world’s first 5G-based remote driving.
• In 2019, China Mobile and China Unicom agreed to mutualise their 5G network deployment till 2026 to ensure faster deployment and save $47 billion during 2019-2026.
• In 2020, Volvo partnered China Unicom to explore V2X and other use cases requiring 5G network.

More than 480,000 5G stations have already been set up in China this year, well on track to reach the 2020 target of 500,000 5G stations.

Definitive industry announcements

Years of efforts on research, deployment and testing of 5G use cases have finally led to building of industry confidence in China.

• In 2019, Geely announced to offer 5G connected V2X-enabled vehicles in China starting 2021.
• In 2020, GM announced to equip all new Cadillac models and most Buick and Chevrolet cars in China with 5G by 2022.
• In 2020, Huawei partnered with 18 automakers to build a 5G-enabled automotive ecosystem for faster deployment of such vehicles in the country.