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.