In the near future, all Chinese cars could be required to carry tracking equipment.

A pilot project in the southern Chinese city of Shenzhen will allow the government to track 200,000 vehicles in real time.

The project could be used as part of an effort to tax vehicles depending on where and how much they drive. It also could serve as the first step in developing so-called vehicle-to-vehicle and vehicle-to-infrastructure, or V2V and V2I, technologies for tomorrow’s autonomous cars.

But the system, which could eventually be rolled out across China, also raises some significant privacy issues, especially in a country that is now proposing new restrictions on use of the Internet that would make it harder for government critics to remain anonymous.

(Ford sales in China take a tumble. Click Here for the latest.)

China is by no means the only country developing technology that could be used to identify individual vehicles. Europe, Japan and the U.S. are all working up connected car systems that, at their most benign, would automatically keep motorists apprised of things like traffic jams and crashes, as well as weather conditions. Such technology could become essential as the first autonomous vehicles begin rolling onto the highways in the coming decade.

In January, U.S. Transportation Secretary Anthony Foxx announced in Detroit plans to launch a major connected car pilot program, the Obama Administration saying it would request $6 billion in funding for the 2017 fiscal year.

A routine sight on Chinese roads. Tracking tech could help reduce crashes.

Chinese regulators have put no price tag on the project in Shenzhen, which this week issued the first batch of what will become 200,000 electronic vehicle IDs. The state-owned China Aerospace Science and Industry Corp., or CASC, said the project will eventually be expanded to all private vehicles in the city.

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Initially, eight types of vehicles are being targeted, including school buses and heavy-duty trucks.

The project could eventually be expanded to other cities, the Reuters news service noting that other technology trials have been piloted in Shenzhen before rolling out across the country.

The electronic IDs — which operate somewhat like the RF IDs stores now use to identify and track products in warehouses and on store shelves – could serve multiple “smart traffic applications,” according to CASC:

  • It would allow highway authorities to readily detect traffic flows, not only determining where there is a traffic jam, but also to see where vehicles are coming from and heading to;
  • It would make it easier to weed out vehicles with fake license plates and track other illegal activities;
  • In conjunction with other connected car technology, it could alert motorists if another vehicle were to run a red light, preventing crashes;
  • And it could be used to track the mileage a vehicle accrues, allowing a tax system based on mileage traveled.

But the technology also could be used to monitor the movements of journalists and government critics, something the Chinese government has been known to do using more conventional approaches.

Government regulators aren’t the only ones interested in finding ways to more closely monitor where and how motorists drive. In the U.S., for example, a number of insurance companies now offer potential discounts to drivers who agree to use vehicle monitoring systems, such as Progressive’s Snapshot. While good drivers get rewarded, those who speed or engage in other risky behaviors can be penalized with higher rates.

And several states have proposed the idea of pay-per-mile tax systems. Rather than having to rely on periodic odometer readings, a system like the one in Shenzhen would allow real-time monitoring.

(Cadillac puts increasing emphasis on China as it seeks global growth. Click Here for the full story.)

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