Xpeng, Li Auto get approval to test hands-off driving in China

Xpeng and Li Auto have received approval to test level 3 autonomous driving features in designated urban areas in China.

Xpeng will conduct tests in Guangzhou, while Li Auto will operate in designated areas of Beijing.

This follows approvals for Changan Automobile and BAIC to assemble cars equipped with level 3 self-driving systems.

Level 3 technology allows vehicles to operate “hands-off” under certain conditions, but drivers must remain alert and ready to take control if needed.

The move signals increased regulatory support for advanced driver assistance systems in China as the country’s car market slows.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

Level 3 approvals remain tightly restricted to specific roads and supervised fleets

After test approvals for Xpeng in Guangzhou and Li Auto in parts of Beijing, regulators still fence L3 use into pilots 1. Approved features work only on marked road segments with firm speed caps 1. Changan Deepal SL03 runs at up to 50 km/h on set Chongqing stretches during jams, while BAIC ARCFOX Alpha S is limited to 80 km/h on approved Beijing expressways 1. These cars are not sold to retail buyers and need joint filings from the maker with ride-hailing or logistics operators 1. Features scale back or switch off beyond smart roads that carry high precision maps and roadside sensing, so drivers must take control 1. China favors vehicle-road-cloud integration 1. That means cars lean on roadside sensors, high precision maps and cloud support 1. That departs from Western single car intelligence 1. Given that stance, Xpeng and Li Auto tests will stay bounded.

LiDAR and high compute Electronic Control Unit (ECU) suppliers should prepare for a demand turn as pilots scale

Automotive Light Detection and Ranging installs hit 1.5 million in China in 2024, up 245 percent year over year, with 6 percent penetration 2. Hesai Technology targets more than 1 million units in 2025, then about double in 2026 3. Premium models stack multiple LiDARs for redundancy, with NIO ET9 and AITO M9 using several, while a GAC L3 model will carry four 2. Suppliers of LiDAR and high compute Electronic Control Units can watch Xpeng and Li Auto orders to time outreach. Funding plans can track demand as it moves beyond ride hailing fleets into wider commercial use.