NAGOYA, Japan -- Toyota Motor will conduct its first self-driving tests on public streets in China through a partnership with local startup Pony.ai.
Lexus sport utility vehicles equipped with the autonomous driving system developed by Pony.ai. will travel on the streets of Beijing and Shanghai starting next month.
The announcement Monday follows Toyota's decision this summer to join the Apollo project, the self-driving development platform spearheaded by Chinese search engine provider Baidu. The two companies also are jointly developing driverless buses.
Toyota is stepping up research and development on the mainland with an eye toward the battle for high-tech supremacy between the U.S. and China. The automaker operates an artificial intelligence subsidiary in the U.S., but transferring American-developed technology to China could prove difficult under President Donald Trump's trade policy. The e-Palette, a Toyota self-driving mobility concept that can provide transportation or retail services, will run on software developed by the Apollo program.
Pony.ai was founded in 2016 by Tiancheng Lou and James Peng, who were both self-driving developers at Baidu's Silicon Valley location. The startup, based in Guangzhou with about 500 employees, tests driverless taxis within a geofenced area in the city. With U.S. venture capital firms providing financing, Pony.ai's enterprise value is estimated at $1.7 billion.
China's government is pouring resources into self-driving technology. The Xiong'an New Area in Hebei Province, pushed President Xi Jingping, is being transformed into a new city that integrates autonomous driving along with other innovations. Baidu and other big-name tech companies are moving into the city.
PwC Consulting projects that autonomous vehicles will account for 35% of China's new automobile sales in 2030, higher than the 10% share forecast for the U.S.