Connected and autonomous vehicles (CAV) set to drive smart mobility development in Hong Kong

New market study commissioned by ASTRI from Deloitte China indicates cross-sector collaboration and innovation backed by policy support are key to boosting CAV ecosystem growth

Published date: 15 April 2024

Hong Kong has vast potential to build a connected and autonomous vehicle (CAV) ecosystem that is collaborative and innovative, according to a new market study commissioned by the Hong Kong Applied Science and Technology Research Institute (ASTRI) from Deloitte China.

The Hong Kong Connected & Autonomous Vehicle (CAV) Development Study maps development paths for CAV technology in the city through a comprehensive analysis of the key success factors of industry-leading markets, based on ecosystem enablers including policy and regulations, infrastructure, R&D capabilities, supply of talent, and funding and commercialisation.

Underpinned by its ambition to develop into an international Innovation and Technology (I&T) hub, Hong Kong has rolled out a range of policy documents to propel smart mobility development, including the Smart Mobility Roadmap for Hong Kong and Hong Kong Smart City Blueprint 2.0. These documents recognise the significance of Vehicle-to-Everything (V2X) technology in tackling traffic congestion, enhancing road safety and reducing air pollution. The newly enacted Road Traffic (Autonomous Vehicles) Regulations further set the stage for CAV to play a greater role in revolutionising the city’s transport system.

Edward Au, Southern Region Managing Partner, Deloitte China says, “Deloitte is delighted to have been commissioned by ASTRI to conduct Hong Kong’s first comprehensive study on the development of CAV, as part of our commitment to supporting smart city development driven by our INspire HK strategy. With I&T as a new engine of our city’s future growth, we are working closely with government, industry and academia to fuel new innovations and accelerate R&D commercialisation, including through the establishment of the Deloitte AI Institute at our Innovation & Assets Development Center in Hong Kong Science and Technology Park. Leveraging our professional expertise, global resources and diverse investor network, we are determined to advance the development to a healthy CAV ecosystem and drive towards Hong Kong’s smart mobility goals.”

As part of Hong Kong’s smart mobility drive, the Transport Department plans to unveil a Transport Strategy Blueprint in 2025 to build a smarter, more efficient transport system. Meanwhile, staunch support from technology incubators and research institutions including ASTRI, the Automotive Platforms and Application Systems (APAS) R&D Centre, Hong Kong Productivity Council (HKPC), Hong Kong Science and Technology Parks Corporation (HKSTP) and Hong Kong Cyberport Management Company (Cyberport) have promoted the deployment of C-V2X technology and infrastructure in collaboration with industry, academia and the R&D sector.

Referencing five benchmark markets with similar geographical features and CAV industry development to Hong Kong (Korea, the Netherlands, Singapore, the UK, and the USA), the study highlights the importance of establishing a dedicated governing body and robust regulatory framework for CAV. It also illustrates that developing highly connective digital infrastructure and stronger R&D capabilities are pivotal to supporting CAV deployment. Furthermore, in addition to boosting talent resources via public-private and academia-industry collaborations, ample public funding for CAV projects is essential to drive industry growth and encourage private investment.

Falcon Chan, Hong Kong Consulting Strategy and Transformation Offering Leader, Deloitte China says, “Hong Kong has vast potential for the deployment of CAV technology in diverse application areas, including public transport, elderly and disabled care, tourism and hospitality, logistics and supply chains. The key to successful CAV ecosystem development is not only setting clear goals and targeting strategic deployment areas, but also orchestrated efforts supported by all stakeholders in the CAV value chain, from upstream technology and R&D players, midstream automakers, service providers and incubators to downstream distributors and users.”

With policy and regulations central to creating clear guidelines and favourable conditions for industry collaboration, the study recommends the establishment of an authoritative, cross-sector committee focused on long-term policy planning beyond sandbox regulatory design. It also advocates for risk-sharing public-private partnerships (PPP) to develop technology, build infrastructure, and operate and maintain projects.

Robert Lui, Capital Market Services Group Hong Kong Leader, Deloitte China says, “Equally important is to strengthen R&D capabilities by establishing a centralised knowledge transfer office that leverages upstream research results of local incubators and universities, with the abundant R&D research facilities of the Greater Bay Area. To attract more strategic CAV enterprises to establish in the city, Hong Kong should enhance government initiatives that foster business matching services, connect enterprises with potential investors and diversify funding sources beyond government resources.”

“The Government has launched the Smart Mobility Fund, New Energy Transport Fund and other funding programmes, and there is a need for thematic funds that target applied research trials and projects in CAV-enabling sectors such as AI, robotics, V2X connectivity and communications, semiconductors and microchips. As a leading international financial centre with mature capital markets, Hong Kong also serves as an ideal platform for CAV enterprises to raise capital for R&D commercialisation and business development through public and private funding.”

Additionally, the study makes recommendations for the development of a CAV-friendly infrastructure, including fostering 4D map development, modernising traffic infrastructure by deploying sensors, cameras and smart traffic tools, expanding the EV charging network and embedding CAV development into urban planning.

To ensure clear, top-down goal setting and coordinated implementation of strategic activities, the study recommends a three-stage framework for driving sustainable CAV development in Hong Kong (covering foundation enhancement, development coordination, and new industry incubation), with the ultimate goal of realising full deployment with seamless integration of autonomous and manual vehicles in real-life environment, such as the Northern Metropolis.

Falcon Chan concludes, “Hong Kong’s many successes in deploying CAV technology demonstrate the boundless innovation and seamless collaboration of our city’s growing CAV ecosystem. Realising the full potential of possibilities for CAV will require a multi-pronged approach to boost physical and digital infrastructure connectivity, accelerate R&D commercialisation opportunities through targeted funding support and attract more enterprises and talent to Hong Kong as we collectively shape this thriving industry.”

Click here to download the full report.

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