Although the the global market for autonomous vehicles is growing at an annual rate of 41%, the U.S. is dragging its feet in developing AVs, while China is ramping up production. The market is expected to reach over $320 billion by 2030.
China’s AV industry is one of the fastest growing in the world, strengthened by significant policy support from the Chinese government. An algorithm for a successful self-driving car needs several million miles of real-world data, and Chinese policy has only strengthened the framework for accessible road tests and innovation to rapidly validate and improve existing AV technology.
When Governor Tom Wolf signed a law allowing the testing and deployment of autonomous vehicles (AVs) last month, he accelerated our country's effort to compete in the cutting edge AV industry. Not only will Pennsylvania's new AV law help create jobs in the burgeoning AV sector, but it will also help American companies compete with foreign auto manufacturers who are years ahead in self-driving technology.
The simple fact is, to win in the AV race internationally, or even to compete well, states and Congress need to put more tires on the road. Meanwhile, the federal Department of Transportation caps the number of custom-built AV vehicles at 2,500 per company, and has not approved critical rules to boost AV innovation. Manual control standards for AVs still include things like brake pedals and mirrors that are irrelevant to cars without drivers.
At this rate, America’s AVs are hitting the road at a snail’s pace compared to the rest of the world, and this lack of urgency is having real-world impacts in Pittsburgh and across the country.
Argo AI, a promising AV company that started in Pittsburgh in 2016, suffered the consequences of Congress's slow action when they shut down just last month. The company was backed by Volkswagen and Ford with big ambitions for self-driving vehicles, but couldn't stay afloat due to a lack of new outside investors and the lethargic timeline for governments to put self-driving transportation on the roads.
Argo AI’s collapse was a step back for Pittsburgh, but the state and the city are still growing tech hubs for AVs, with the industry indirectly contributing to over 15,000 new jobs and generating over $34 million in local tax revenue for the city in 2021. Dozens of new tech companies and investors in AV and robotics research are moving to Pittsburgh and adding countless more jobs to its local economy, bolstered by the new AV law.
America needs to make beating China in building AI-powered vehicles a national priority.
Congress has taken action to help ensure the United States can compete in other areas of emerging tech. The Inflation Reduction Act (IRA) allocated over $369 billion towards electric vehicles and a significant tax credit for American-made EV batteries, attracting an influx of investors and establishing a stable EV battery supply chain in the U.S.
The CHIPS and Science Act of 2022 ramped up semiconductor production. The U.S. had dropped from making 40% of the world's semiconductors in 1990 to making 12% today. Congress allocated over $52 billion towards American semiconductor R&D and commercialization. It resulted in the American semiconductor industry nearly doubling the investment with a $50 billion match.
Both acts directly decreased our reliance on fragile foreign supply chains and increased American employment. They helped the global EV and semiconductor industries challenge China's current dominance. Congress and the Biden Administration should take the same approach for autonomous vehicles.
The U.S. is still the leading manufacturer of AVs, but that means now is the worst time to slow down. Pennsylvania serves as a great case study for what we could be doing; it has eager investors and manufacturers, a framework for what proper intervention and support looks like, and even bipartisan support. The only thing that remains is for national action.
Adam Kovacevich is the founder of Chamber of Progress.
First Published: December 14, 2022, 5:00 a.m.
