Podcast INTO GERMANY!
Episode 22: Self-Driving Solutions – Autonomous Mobility and German Automotive
- September 2024 -
It may be some years of technological development, but Europe’s automotive heartland is gearing up for a future of driverless cars.
Sep 02, 2024
Germany remains a pioneer when it comes to self-driving cars. Europe’s automotive heartland is the first country in the world to pass nationwide regulations for level-4 autonomous vehicles. International businesses that expand to Germany will find top-class research facilities, a well-trained and innovative workforce and an open-minded car culture!
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Our Guests
Yang Ji is founder and CEO of LiangDao, a Chinese-German software and engineering service provider of AI-based sensor systems with offices in Munich and Berlin, as well as in Beijing and Shanghai. LiangDao is focusing on the so-called LiDAR technology, which is crucial for self-driving cars.
Christoph Mester is Manager of Transportation Technologies at GTAI and works for the agency’s investor service department. As an expert for future mobility, he advises international companies planning to expand to Germany.
Transcript of this episode
| This transcript was partly generated automatically, text errors are possible |
[Sound of honking cars and traffic jams]
Presenter:
Ah, the joys of a daily commute. Hundreds of millions, if not billions of people, subject themselves to this frustrating waste of time every week. If only there were a better way.
AI voice:
Hello, where can I drive you today?
Imagine leaning back in your seat, reading, watching a video or even – gasp! – doing some work, while your CAR drives YOU to your job. That’s just one potential benefit of autonomous driving. Self-driving vehicles also promise to make the world more accessible to the elderly, disabled people and people in rural areas. They can reduce the number of accidents, most of which are caused by human error. And yes, they can ALSO help avoid traffic jams.
No wonder, then, that autonomous driving is considered one of the most important future technologies in the automotive industry. Consultant McKinsey predicts the market for driver assistance systems and autonomous driving for private vehicles will increase by 15 to 20 percent annually between now and 2035. And yearly market VOLUME could rise eightfold to around 400 billion US dollars.
Christoph Mester, Manager Transportation Technologies, GTAI
It will still take a lot of time until we actually have fully level five autonomous vehicles on the roads, where you can just turn your back to the road and enjoy your movie. But there's a lot happening globally. And we're very eager to push this aspect forward, this technology and help German as well as foreign companies with their cooperation and pushing this technology forward. Hopefully in Germany, but also obviously down the line globally.
Presenter:
Welcome to INTO Germany, the German business podcast, brought to you by the international business promotion agency Germany Trade and Invest. I’m your host Kelly O’Brien.
We just heard Christoph Mester from GTAI’s investor service department. As an expert for future mobility, he helps international companies expand to Germany. Over the last few years, he has observed a significant increase in interest from firms active in the field of autonomous driving. In metropoles such as San Francisco and Beijing, autonomous cars are already on the road. And Germany is also getting ready for a driverless future. But before we talk to Christoph, let’s look at a company that’s working on bringing autonomous cars to the roads.
Yang Ji is founder and CEO of LiangDao, a Chinese-German software and engineering service provider of AI-based sensor systems. They’re crucial for self-driving cars. LiangDao is focusing on so-called LiDAR technology. LiDAR, short for Light Detection and Ranging, is a remote sensing method that uses light in the form of a pulsed laser to measure ranges and speed. It is like radar but uses laser beams instead of radio waves.
Yang, many thanks for joining us. Could you give us a brief introduction to the technological challenges of autonomous driving?
Yang Ji, founder and CEO of LiangDao
There are three major areas. The first one is: We have to enable the cars to percept the environment. So, without eyes and ears, you cannot see and know what happens in the surrounding environment. So, the first technology is actually what we are doing, to enable the car to see the environment. The second one is, to make a decision. Artificial intelligence plays a very crucial role in this area. So how can the car safely drive on the road? And the last one is action. So, any decision made by AI should be realized by the car. So, it means acceleration and you have to change the lane and react to the decision. This is a concept which has been created a couple of years ago. Now we are working on end-to-end solution. That means from perception directly to a reaction as a car. So, we will jump through this middle step to make the decision more efficient and reduce the complexity. So, this is the current trend of the technology.
Presenter:
Your company LiangDao is active in the first area: Enabling the car to perceive its environment. How exactly does that work?
Yang Ji, founder and CEO of LiangDao
We are developing a toolchain. So, a software toolchain which can help car companies to collect data with lots of sensors. And we will help the company to get the object. We are talking about the ground truth, so: What happens really in the surroundings? And with this ground truth, the car companies can evaluate and develop their own sensor software and compare with our ground truth. So, we accelerate the development process and accelerate the testing procedure for autonomous driving. Our goal is to accelerate autonomous driving with better sensor technology and software toolchain.
We are not hardware providers, so we are not building the sensor or manufacturing the sensor. But we are helping sensor companies and OEMs to integrate the sensor into the car and to support them with our software to process the data of the sensor. So, you can imagine there is lots of data during the development and during the usage of the car. So they need support to process the data efficiently for developing, testing and operation later.So we are going to provide very good information about the surroundings, about obstacles and with high precision and high quality. So, we can make a better decision and, of course, this helps the car companies to realize autonomous driving.
Presenter:
Just to be clear, ground truth is a technical term for the description of reality as depicted in a digital model. So, Yang, you’re originally from China – how come you set up part of your company in Germany?
Yang Ji, founder and CEO of LiangDao
I have been living in Germany for more than 20 years, so I know Germany very well. I see there's lots of opportunity here. I have been to different European countries. I think in Germany we have a really reliable decision and very good universities. And I met always motivated people, and they are open minded.
Presenter:
Are the Germans open to having driverless cars on the road? Some people might find the idea a bit scary…
Yang Ji, founder and CEO of LiangDao
I think Germany has a very good tradition. And what I have seen, young people in Germany are looking for new challenges. I think the spirit of producing a good car for the future is still there. So I think in Germany, we have a good opportunity to find good customer, to find investment partners and, I would say, to bridge both countries and to find more business opportunities.
Presenter:
Your company has offices in Germany as well as China. How does the cooperation work?
Yang Ji, founder and CEO of LiangDao
We have customers, for example, BMW Magna in Germany. So, we are helping them to develop autonomous driving not only in Germany but in China. So, we can help the customer to operate in both countries. So, this is our major focus. And in China, we are working with Chinese OEM, who are cooperating with German OEM. We founded the company in the beginning in both locations. In Munich and Berlin in Germany and in Beijing and Shanghai in China. I will say there's a really interesting cooperation because, you know, in Germany, all love cars, mechanical cars. And we have a very strong tradition of how we build cars. This is unique and a key industry in Germany. So, we have well defined procedures. Now, the Chinese companies are coming from a different background. They are more internet-based companies. They are company, which don't have any experience of building cars, but they are very good at providing digital services, so they are good at digitalization.
Presenter:
You’re talking about companies like Xiaomi which started with smart phones and are now producing cars.
Yang Ji, founder and CEO of LiangDao
There is a different culture and different speed and different, I will say, different cooperation models of how you can build a product very fast. You just build MVP and try to improve this MVP, minimal valuable product on time. But, you know, building a car is not building a shelf. You cannot just give the customer an unsafe product and let them improve your product. So, the big challenge is how to get a common understanding about safety, about digitalization and how to increase the efficiency of the development. Because with people of two different cultures coming together, the first question is about how we work together. I think it's a learn from each other and make a better product for the future.
So we see Germany as a market, as a partner. And I will say as a very strong R&D, a research and development partner. So, we can learn lots from Germany. But I think Germany can learn lots of things from China, especially how we deal with that digital model and the digital services. The Chinese market is very strong with this point.
Presenter:
You were mentioning Germany being a strong partner when it comes to R&D. Are there any other advantages to Germany as a business location?
Yang Ji, founder and CEO of LiangDao
The transformation into smart city, autonomous driving, it's really happening in Germany and people are looking for change. People are looking for a challenge. So, I think, 20 years ago, 2001, 2002, is a different situation. But now I think in Germany we are in a very dynamic environment. And this is a really good chance to come to Germany because everything is new and we have the opportunity to create something new and this is a chance. We have to take it.I think as a moment, from the government, politics as well as industries, there are so many opportunities for startups, for young and established companies, for international companies. Just one example: A couple of years ago, you cannot imagine that you speak English, and that you will have a good life in Germany. But now the international effort is really here, so I can speak English. My colleagues come from Nepal, from Bulgaria. Germany becomes international and this is a really good situation for foreign companies to come to Germany.
Presenter:
What would you tell other companies planning to set up a business in Germany?
Yang Ji, founder and CEO of LiangDao
I think, it is very important that companies coming from foreign countries and settle down in Germany – it’s important that they know the regulations in Germany and cooperate with local government. I’m in Munich. So I'm working closely with city of Munich, with Invest in Bavaria. And they are all nice people and helping us to integrate in the economic system, to help us find partners. Germany is a really good country and we get lots of help, even financial support from the government to build more capacity. So, I think this is a really good resource. But some companies think in Germany, it's difficult to get all this support because there are lots of procedures, processes. But I think it's worth doing that because as soon as you know how it works, I will say the second project is much easier. So, after that you know it and you will get more support. So, I will encourage people to do that.
Presenter:
Before we end, I’d like to ask you for your assessment: When will we see the first autonomous cars on the road?
Yang Ji, founder and CEO of LiangDao
Six years ago I will say: everyone is very optimistic. So we thought that autonomous driving will be done in 5 or 10 years. We will see lots of autonomous cars on the street and maybe worldwide we have lots of commercial success with autonomous driving.
Lots of companies made this mistake: Autonomous driving will come in 5 or 10 years. I think at the moment, my feedback is, we have to be more realistic and define a small area, which is suitable for autonomous driving. But don't think autonomous cars come everywhere and tomorrow the world is changing. No. Maybe let's start with this agile methodology – starting with, for example, campus, university, hospitals, which is really useful, suitable for autonomous cars or shuttles and then extend the area to highway and the other areas. I will say: Be patient. Don't give up but be more realistic. The lessons learned is: Step by step is very important.
Presenter:
Many thanks Yang Ji for this glimpse into a driverless future. We’ll go shortly to Christoph Mester, GTAI’s expert for future mobility, for an overview of the German framework conditions for autonomous driving. But first, it’s time for our monthly news wrap up:
NEWS
Green Growth
Environmental protection is big business in Germany. And it’s growing bigger by the year, as government figures show. The Federal Statistical Office says that 2022 turnover in goods and services in the sector reached EUR 107.5 billion – an annual increase of 16.9 percent. The largest share came in climate protection, followed by measures to improve energy efficiency and reduce energy use, and renewable energy measures.
Sporting Achievement
Germany’s professional football league, the Bundesliga, is also setting records. Turnover reached EUR 3.8 billion in the 2022-23 season, according to a new study by business consultants Deloitte. Annual growth was 22 percent. The Bundesliga is the second most lucrative national league in the world after the English Premier League, but ahead of Spain’s La Liga, Italy’s Serie A and France’s Ligue 1. The figures do NOT include transfer fees.
Getting Going
Germany has officially kicked off some two dozen Important Projects of Common European Interest involving green hydrogen as an energy carrier. They’re part of the third stage of what’s called Hy2Infra. National and regional German governments are putting 4.6 billion euros into the projects. They focus on improving production capacity, developing innovative storage solutions and distributing hydrogen.
Getting Charged
A research consortium led by the Technical University of Munich has developed a rapid EV charging process that will encourage electromobility. The research alliance NEFTON, which also includes heavy vehicle constructor MAN, succeeded in fully charging an electric freight truck within four and a half hours. That’s within the legally mandated rest period for long-haul transport, meaning that drivers would not have to do any additional waiting for their vehicles to charge. And finally…
Getting Back on Track
The German Start-Up Association says that the sector is undergoing a “turn around” after a decline in 2022. 1384 young companies had been founded in the first half of 2024, organization figures show. The rebound is being driven by fledgling software and particular artificial intelligence companies.
Presenter:
Okay, so put future mobility together with AI and you automatically arrive at autonomous driving. Experts believe it’s one of the most important technologies in the industry. Why? And what’s the state of play in Germany? These are the questions we’ll put to Christoph Mester from Germany Trade and Invest. Christoph, why is autonomous driving a given?
Christoph Mester, Manager Transportation Technologies, GTAI
It's crucial for future technology. It makes the driving experience and road traffic a lot safer in general, comparing to the human driven automotive industry. Every accident that involves autonomous driving is for sure a big headline in the news. But if you just currently look at what causes accidents, they are always or almost always due to human failure. Obviously, there are further follow up questions arising when you have accidents that are caused by autonomous vehicles. Who's liable for instance? Obviously, these questions need to be asked. Rightfully so. But we can expect road traffic to be a lot more safer when we have a mature autonomous driving technology on the roads.
Second aspect, despite the safety issue, is environmentally friendliness. With higher efficiency, for instance pairing or twinning vehicles together in the logistics department, you get a much more efficient fleet management. And that also reduces CO2 emissions down the line. And lastly, what I think makes it such a crucial future technology, is the user orientation. So, you have the entertainment side of things, where the autonomous driving vehicle can become a space to relax, to watch movies. But even beforehand, when it comes to user orientation, it makes mobility inclusive to all age groups and also all people living maybe for instance in more rural areas. It makes mobility more accessible, where they don't have to wait for a bus that might arrive every 2 or 3 hours, for instance. But maybe they can on demand order vehicles that are being driven autonomous to reach their destination.
Presenter:
We heard earlier from LiangDao founder Yang Ji that we have to lower our expectations. Autonomous cars won’t arrive as quickly as we thought a couple of years ago. We’ve already talked about the technical issues. But what other challenges are there?
Christoph Mester, Manager Transportation Technologies, GTAI
There's the financing challenge, obviously. You really need deep pockets. And you're in for the long run to develop such a technology. You need a lot of partnerships. You have to do a lot of research and development before actually those new business models emerge, and you can get your return on investment. And lastly, a big challenge obviously is the legal framework. Who's liable? How can we ensure that data is being protected? And then also safety. We've mentioned the topic of consumer acceptance within this technology. It takes a long time, because we are so used to human driven vehicles, to accept these new vehicles that might not have a driver on the steering wheel, which can be quite scary at the beginning.
Presenter:
Regulation is increasingly becoming an issue. Several countries have already passed local legislation and agreed on standards. With autonomous driving, there are five levels: From level 1 – driver assistance – which includes for instance adaptive cruise control to level 5, involving vehicles that can drive entirely without human pilots anywhere in road traffic. Christoph, what’s the legal situation in Germany?
Christoph Mester, Manager Transportation Technologies, GTAI
Germany is definitely trying to pioneer when it comes to nationwide regulation in autonomous driving. It was in around 2017 where there was the first legislation or act on autonomous driving that allowed level three autonomous applications entered into force. So you can take your hands off the wheel on the German autobahn. Not going above 60km/h, but below where there are traffic jams for instance, you can take your hands off the wheel and then the driver assistance systems take over. And then just very recently in 2022, the amending road traffic regulation and also an amendment in liability insurance allows up to level four autonomous technology to be allowed on German roads. That makes Germany the first country globally to have a nationwide regulation for autonomous driving up to level four. So, Germany definitely takes a leading role here. Besides that, Germany also has various testbeds into place here in Germany on highways for instance, but also regional and interregional testbeds where they are testing future technologies in this segment.
Presenter:
The so-called “Autonomous Driving Act”, passed in 2021 and the “Autonomous Vehicle Approval and Operation Ordinance” of 2022 have created the legal framework for implementing level four cars. Level four systems take over control so that the vehicle can also cover longer distances within a defined operating range without driver intervention or monitoring. But how does it work in practice?
Christoph Mester, Manager Transportation Technologies, GTAI
The German framework, they have amended road traffic regulations and is allowing up to level four autonomous vehicles applications to be on German roads under specific conditions. What those conditions are, for instance shuttles, passenger transport in rural areas and how you can commercialize this legal framework, is something that has to be discussed in dialog with the Federal Ministry for Digital and Transport. So, it is still a dialog, to see: All right, where do we want to have the first deployment of this technology? Is the technology mature enough? That is going to be key aspects. Because you won't be able to register a vehicle with a level four autonomous driving if it's not certified yet.
Presenter:
Let's take a look into a future when self-driving cars are standard on our roads. How will that affect the automotive industry and what business opportunities will it create?
Christoph Mester, Manager Transportation Technologies, GTAI
It's going to change consumer experience of driving a vehicle. And also, what makes a good vehicle will change a lot. You don't have the vehicles with a huge amount of horsepower that can go on the autobahn without a speed limit. I'm not sure this is going to be the biggest selling point if we talk about autonomous vehicles in the future, but much more so is going to be the infotainment system within the vehicle. What can you do within the vehicle? How easy can you connect your phone? It's a computer on four wheels down the line. How easy can you watch your favorite show? Connect with friends and family? Chat on any messenger? That will define a good vehicle in the future. And that is also going to shake up the industry where it's not the biggest internal combustion engine with the highest tag price – that is not the best vehicle in the future, I think. But it's going to be also a lot related to the infotainment system within the vehicle, how comfortable it is to drive, the suspension systems. Those are going to be a whole lot more important in the future.
Presenter:
Christoph, as an expert on future mobility: Where will we first see self-driving cars?
Christoph Mester, Manager Transportation Technologies, GTAI
I think in the public sector, public transport, talking about buses and shuttles, I think it will be deployed first. Because, in my opinion, there is the biggest use case. In rural areas, for instance, buses do not arrive very frequently and it's not very demand orientated. But if people could just say, all right, I need a transport here at point A at time X – I think those vehicles, driving autonomous or somewhat autonomous, I think there the deployment of the technology would make a lot of sense. And because it is the relatively most easy deployment, it will also be deployed in fixed routes. So obviously a bus route is fixed, but also at the airport, for instance, or at logistics hubs, at companies – there are fixed routes where vehicles go from A to B and then from B to A again. I think there we will experience the first commercial and public deployment of the technology. Then at a later stage, we’ll experience the technology a lot more in the private sector.
Presenter:
Before we say goodbye, tell us: Why is Germany an interesting market for companies active in this industry?
Christoph Mester, Manager Transportation Technologies, GTAI
For foreign investors, Germany offers a great investment climate. You have a strong automotive industry. It's been historically strong since the vehicle has been developed around 140 years ago. There are several great research institutions you could potentially cooperate with. And also you have a well-developed infrastructure to just test these vehicles. We've mentioned the legal framework in Germany, the test beds in Germany. So, there are a lot of investment opportunities. And also, Germany, despite its strong automotive industry, it has also always been strong in the premium sector. And in the past, we've always experienced cutting edge technology being deployed first in the premium sector. And then it trickles down to the mass market eventually. And we think that with the autonomous driving technology, we will experience the same thing. And that's why Germany is taking a pioneering role here.
We've been working with several companies active in the autonomous technology sector within the automotive industry. And we've been able to help them out with several issues, legal questions, just general assessment of the market, where in Germany it could be best to relocate their industry with a subsidiary and then also, when it comes to the incorporation, itself, how you do that in Germany, how do you establish a so called GmbH a limited liability company? We are very pleased to get in touch with foreign companies that are interested and helping them. Everything free of charge as we are a public entity and all the information we receive is kept very confidential.
Presenter:
And there we have it: science fiction becoming reality. Many thanks to our guests, Yang Ji from automotive technology company LiangDao and Christoph Mester from Germany Trade and Invest. As usual, before we say goodbye we’ll look at HOW GERMANY WORKS.
HOW GERMANY WORKS
The government body that will determine when and in what form autonomous driving vehicles are allowed in Germany is the Federal Motor Transport Authority or KBA. It’s part of the Ministry for Digital and Transport and has been around since 1951. The KBA approves vehicles for use on Germany’s roads and monitors compliance and quality in motor vehicles. It also collects a wealth of data about everything on Germany’s streets and highways, including the points drivers incur for traffic infractions. It’s located in the country’s northernmost city, Flensburg. So reckless German drivers are given “points in Flensburg”. And THAT’s how Germany works.
Presenter:
We've come to an end of another episode of Into Germany. If you’d like to road test your autonomous mobility business idea in Europe’s automotive heartland, we’d like to steer you to Germany Trade and Invest. As Christoph said, we’ll be happy to advise you… all at no cost because we’re a government agency. Get in touch at gtai.com. We’re also keen on your opinions, suggestions and questions about this podcast. Please leave a comment in your favorite app or drop us a line. You’ll find all the details in our show notes.
AI voice:
We have reached our destination. I hope you enjoyed your journey.
Presenter:
And with that - till next month, drive safely, “Auf Wiederhören” and remember: Germany means business.
