Summary
- China’s
MIIT and Public Security tighten smart-driving technology rules for
safety. - Automakers
banned from using “smart” or “autonomous driving” in ads; must specify
automation levels. - Features
like remote parking and smart summon are prohibited. - Public
beta tests need official approval; OTA updates require government
clearance. - Driver
monitoring must detect hands-off steering and activate safety actions. - Violators
face fines, license loss, or criminal charges if accidents occur. - New EV
battery safety rules to prevent fires and explosions. - Rules
respond to fatal Xiaomi SU7 accident in March 2025. - Annual
inspections and stricter control for Level 3+ autonomous vehicles
introduced.
China is dramatically tightening its road traffic laws and
regulatory oversight of smart-driving systems following high-profile accidents
and growing public scrutiny over the rapid integration of automation in
vehicles. The revised legal framework announced by the country’s two main
regulatory bodies and confirmed across multiple media outlets targets
carmakers, software developers, and marketers, imposing tough measures designed
to ensure public safety, clarity in advertising, and responsible deployment of
emerging driving technologies.
What Are the New Road Traffic Regulations and Who Issued
Them?
As reported by Brenda Goh and Zhang Yan of Reuters,
China’s Ministry of Public Security (MPS) and Ministry of Industry and
Information Technology (MIIT) revealed plans on July 23, 2025, to tighten road
traffic regulations and set out legal responsibilities to ensure public
safety. These steps come in direct response to the increasing prevalence
and adoption of intelligent driving systems in particular, those providing
advanced driver assistance or partial automation in both electric and hybrid
vehicles.
According to Devdiscourse, the public security ministry
is actively amending road traffic regulations to acknowledge the complexities
and risks associated with smart-driving and assisted-driving technologies as
they become more widespread. The regulatory overhaul intends to keep pace
with a fast-evolving mobility landscape marked by new entrants, keen price
competition, and a surge in technology-led features in vehicles.
What Prompted the Clampdown on Smart-Driving Systems?
APCO Worldwide details that the regulatory tightening
follows a tragic accident in late March 2025, when a Xiaomi SU7 sedan caught
fire after a crash in Anhui province. The fatality was linked to the incorrect
use of its assisted-driving feature—sparking renewed regulatory attention and
immediate introspection across China’s sprawling auto industry.
As disclosed by Zhang Yan and Brenda Goh at Reuters,
the incident heightened urgency among authorities to examine not only the
reliability of advanced driving assist systems (ADAS) but also how automakers
represented these features to the public.
“Chinese regulators are tightening
scrutiny of electric vehicle technologies as the industry has grown faster than
expected, with sales of EVs and hybrids accounting for more than half of total
vehicle sales late last year,”
reported Goh and Yan, referencing a milestone
achieved ahead of policy schedules.
How Has China Banned the Use of “Smart” and “Autonomous”
Terminology in Ads?
According to a directive reviewed by Reuters and
reported by the Insurance Journal, the MIIT convened a high-level meeting
with nearly 60 representatives from automakers and warned that the terms “smart
driving” and “autonomous driving” may no longer be used for vehicles still
requiring driver supervision—currently classified at Level 2 (L2) under the
globally recognized SAE standard. Car companies are now required to use
explicit labels like “L2 assisted driving” and avoid any suggestion that their
cars are fully autonomous unless they meet higher levels of certified
automation, which no models in China currently do.
Arena EV further confirms that the new ban was
communicated directly to automakers after the MIIT obtained transcripts and
accounts from the industry, noting that manufacturers are no longer allowed to
push OTA software updates related to ADAS without going through extensive
testing and approval from the governing body.
What Features and Functions Are Now Prohibited?
As outlined by Car News China, the MIIT is banning
various advanced features that enable unsupervised vehicle operation. These
include:
- Automated
valet parking - Smart
summon (remote activation and movement of vehicles) - One-touch
remote control features
A ministry statement highlighted that,
“These functions will
not be approved for products as they cannot ensure driver engagement and
operational safety”.
Automakers must additionally implement robust driver
monitoring systems, which cannot be deactivated and must detect when a driver’s
hands are off the wheel. If a driver ignores the steering wheel for longer than
60 seconds, “the system must implement risk mitigation strategies such as
slowing down, activating hazard lights, or pulling over”.
How Do the New OTA and Beta Testing Restrictions Work?
Under the new regulations, reported by the Insurance
Journal, over-the-air (OTA) updates for driver-assistance systems are now
heavily restricted. Automakers are barred from rolling out unfinished or
unapproved features via wireless updates unless these have undergone extensive
government scrutiny. “Emergency updates will now require recall procedures and
the State Administration for Market Regulation approval,” stated officials,
essentially bringing the software update process in line with traditional
vehicle recalls.
Public beta testing where automakers would traditionally
recruit thousands of early adopters to test experimental features is strictly
prohibited unless it passes through official approval channels. Car News
China noted that,
“Public testing, whether with thousands or tens of
thousands of users, must go through official approval channels.”
What Are the Legal and Financial Penalties for
Noncompliance?
As explained by Zhang Yan and Brenda Goh in Reuters and
also cited by the Insurance Journal, automakers who engage in misleading
advertising of assisted-driving functions could face fines of five to ten times
the advertisement fee or have their business license revoked under China’s
advertising law. If an accident with casualties is linked to false or
exaggerated advertising, company executives may be prosecuted and face up to
two years in prison.
How Are Companies and Industry Experts Responding to the
Crackdown?
Fu Bingfeng, deputy secretary general of the China
Association of Automobile Manufacturers, commented—as quoted by ICARTEA—that
these technologies must be accompanied by targeted awareness campaigns and
guidance programs for first time buyers and elderly drivers. Experts such as
Zhang Jinhua, president of the China Society of Automotive Engineers, highlight
frequent confusion among consumers between driver assistance and true
autonomous systems. This confusion has led to several accidents due to
driver overreliance.
According to the same ICARTEA article, automakers
such as Haval and Landto have reaffirmed at recent vehicle launches their
commitment to preserving the driver’s primary control while offering only
auxiliary assistance features. They emphasized that accurately defining automation
levels must be paired with clear explanations of system limitations and a
precise allocation of responsibilities between manufacturers and users.
What Is the Impact on the Automotive Market and Consumer
Behavior?
The crackdown is expected to create a shift toward safer,
more transparent automation integration and to escalate R&D costs placing
smaller, less-resourced manufacturers under pressure to consolidate or exit the
market, observed researchers at the Pangu Institute and Electric Vehicle Union.
Reporting from APCO Worldwide and Car News
China indicates increased caution among traditional automakers, while more
aggressive entrants and EV startups may lose ground. Chinese stock market data
cited by Car News China suggests sector volatility, with leading auto
stocks such as BAIC dropping nearly 7% and Seres more than 5% on the news of
the regulatory shift.
Despite stricter regulations, ICARTEA notes that
more than three-quarters of new car buyers in China now demand features like
automated highway steering and intelligent parking, and that the share of cars
equipped with advanced driver assistance systems is projected to hit 65% by
2025.
How Will Battery Safety and Broader EV Standards Be
Affected?
Insurance Journal and Arena EV both make note
of tightened technical requirements for EV batteries, as the government seeks
to mitigate risks of fire and explosions in the rapidly expanding EV market. This
will require further investment in product quality controls, defect tracking,
and post-sale monitoring by automakers and suppliers.
What Are the Broader Implications for Driver Responsibility
and Public Awareness?
Authorities are simultaneously launching awareness campaigns
aimed at educating first-time and elderly drivers, while industry leaders at
J.D. Power and McKinsey underscore the need for clear consumer information and
boundaries regarding automated driving features.
In their review, Global Times referenced
adjustments by EV makers in their promotional language replacing “intelligent
driving” with explicit references to assisted driving levels as part of
compliance and public transparency efforts.
What’s Next for Smart Driving Regulations in China?
Observers cited in articles from Reuters, Car News
China, and Insurance Journal agree that China’s intervention will
shape the global discourse for safe and responsible integration of automation
into personal transport. As EVs, hybrids, and advanced automation become the
norm, the challenge for regulators is to balance innovation with public safety,
clarifying liability while encouraging industry consolidation and consumer
confidence through rigorous oversight.
