China sets stage for competition after clearing first hands-off cars

Beijing has approved China’s first two passenger cars that can drive themselves in limited situations, a move seen as a careful step towards hands-off driving in the world’s biggest car market. The decision gives state backing to a technology long promoted by carmakers but tightly controlled by regulators. The Ministry of Industry and Information Technology said Changan Automobile and BAIC may begin producing electric vehicles fitted with level-three driving systems.Firms are seeking level 3 driving clearanceThese systems allow drivers to take their hands off the wheel under certain conditions, though people must still remain alert and ready to step in.This matters because most cars sold with advanced features today still require constant human control. Until now, systems used in China have largely helped with steering or braking but stopped short of letting drivers fully disengage, even for short periods.Now companies are looking for level 3 driving clearance. As was reported by Cryptopolitan, XPeng plans to launch robotaxis and humanoid robots in 2026, powered by its own chips. The company says testing will start in Guangzhou before expanding, as Chinese carmakers push beyond assisted driving into full systems built around automation.The ministry stressed that the two newly approved models can only operate in designated zones. Changan’s car will be allowed to manage busy city roads at speeds of up to 50 kilometers an hour. BAIC’s Arcfox model can handle highways and expressways, with a higher ceiling of 80 kilometers an hour.Both vehicles passed safety checks and road tests, according to the ministry. Officials said they would continue to watch how the cars perform while supporting the wider development of smart driving across the industry.China is yet to fully legalize driverless cars nationwideChina has not yet fully legalized level-three driving nationwide. Under global standards, such systems are classed as hands-off, but not mind-off. Drivers remain legally responsible and must be able to retake control at any moment, unlike in the far-off vision of fully driverless cars.“The approvals showed that authorities were willing to deregulate the market,” said Phate Zhang, founder of Shanghai-based data firm CnEVPost. He added that regulators were likely to move gradually rather than opening the door to everyone at once.That slow approach reflects a balancing act. Beijing wants to support innovation in electric vehicles, an area where Chinese brands now lead globally. At the same time, it is wary of safety risks and public backlash if systems fail on busy roads at a time the market has been growing.Sales of cars with advanced driver support have risen sharply in recent years, with many buyers in China keen to try new technology, especially when it promises to ease traffic stress in crowded cities. Carmakers have leaned into this demand, offering features once limited to luxury brands.For now, Beijing’s approval sends a signal rather than a green light for mass rollout, but carmakers can begin building the models. However, the tight limits show regulators intend to learn as they go.The move also puts pressure on rivals and other manufacturers are likely to seek similar approvals, hoping to avoid being left behind as rules slowly evolve. Get up to $30,050 in trading rewards when you join Bybit today