At the glitzy Auto Shanghai show in April this year, the message was clear: China is making the cars of the future, and that future will be increasingly electrified, connected, and autonomous.
At the world’s biggest car expo, domestic players — once dismissed as mere knockoffs of their Western counterparts — were the stars: BYDBYDBYD Auto is a Chinese carmaker that became the world’s leading EV manufacturer in 2023, competing with Tesla for market share and global attention.READ MORE’s premium EV Denza, HuaweiHuaweiHuawei is a Chinese technology company focused on mobile phones and telecommunications, and is seen as a poster child for China’s global tech ambitions.READ MORE’s luxury sedan, Pony.ai’s fleet of next-generation robotaxis. They were marketed less like cars and more like smartphones, packed with ultrafast charging technology, facial recognition systems, and self-driving features.
With these and other players, China’s autonomous vehicle industry is nearing what some have called its “ChatGPT moment” — a tipping point where breakthrough technology goes mainstream. It is already the world’s largest auto market, and a global leader in electric and autonomous vehicles. More self-driving cars are tested there than anywhere else in the world. By 2030, a fifth of new cars sold in China will be fully driverless, and 70% will feature advanced assisted-driving technology, according to the China Society of Automotive Engineers.
Major tech and auto companies, from Baidu to XPeng, are racing to bring self-driving cars to the market. These firms use AI-powered advanced driver assistance systems (ADAS) that collate data from cameras, radar, and other sensors. While still short of full autonomy, these systems, which are part of consumer cars and robotaxis, are a step toward full self-driving.
China currently leads the world in ADAS, and is at the forefront of deploying robotaxis — autonomous fleets that operate without human drivers. More than half the cars sold in the country are equipped with Level 2 systems, which can handle steering and braking under certain conditions. In China, five firms operate 2,300 robotaxis across 30 cities; in the U.S, Waymo, the sole fare-collecting player, runs over 700 such vehicles in five cities.
Chinese tech companies have an edge in AVs because they are much more deeply integrated into the digital lives of consumers.
Several factors drive the success of China’s AV industry — most crucially, strong government backing and infrastructure investment. As with EVs, China treats AVs as a strategic industry, pushed forward with national government policies. Local governments in cities like Beijing, Shanghai, and Shenzhen compete to set up pilot zones, offer R&D subsidies, fast-track permits, and build urban roads that driverless cars can navigate more easily. This is in stark contrast to the U.S., where the regulatory environment is fragmented across states, and innovation is driven by private industry, slowing deployment and testing.
China’s push to build infrastructure gives it a significant advantage in deploying AVs, according to Bill Russo, the chief executive of Automobility, a Shanghai-based strategy firm. Unlike traditional cars, AVs are embedded in a digitally connected environment, requiring everything from high-speed telecommunications to smart traffic signals to recharging facilities.
“In China, I can drive to remote mountains at 15,000-feet elevation and still have [a signal],” Russo told me. “Whereas in Reno, Nevada, where I am right now, there are still many places where I can drive and completely lose connectivity.”
Backed by the robust digital infrastructure, Chinese tech companies can move into the AV market much more easily. No U.S. tech giant other than Google has ventured into cars, while many Chinese tech companies — from BaiduBaiduBaidu is a Chinese technology company that operates the country’s biggest search engine and video-streaming service iQiyi.READ MORE to Alibaba to Huawei — have made mobility a major pillar of their business. Huawei supplies self-driving software and smart cockpits; Alibaba partnered with XPeng to build a data center to store driving data; smartphone maker Xiaomi unveiled its first car, the SU7, last year.
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Chinese tech companies also have an edge in AVs because they are much more deeply integrated into the digital lives of consumers. Xiaomi, for example, rapidly expanded into the auto market by plugging its cars into an existing ecosystem of smart products from vacuum cleaners to air-conditioners. AVs thrive on data, and China’s vast population and looser privacy rules give companies access to a wide range of information including traffic patterns and pedestrian behavior. That data has powerful flywheel effects: More vehicles on the road translates into more data, which in turn means better model training, improved performance, greater consumer trust, and ultimately wider adoption.
Additionally, far more people in China ride public transit or use ride-hailing than drive private cars. About 40% of Chinese households own a car, in contrast to more than 90% in the U.S. AVs create the most economic value, not through individually owned cars, but through fleets — ride-hailing, delivery, and logistics — that operate much more efficiently. China’s massive e-commerce market has also generated significant demand for new autonomous logistics and trucking companies, like DeepWay and Neolix.
Public acceptance of AVs is also significantly higher in China, allowing for faster adoption. About 85% of Chinese consumers said they were comfortable with autonomous driving that doesn’t require human supervision, compared with just 39% of U.S. consumers, in a 2023 survey. There are also more instances of driverless cars being vandalized and attacked in the U.S. The openness extends to all AI technologies: 72% of surveyed adults in China trust AI, versus 32% in the U.S., according to the 2025 Edelman Trust Barometer.
The Western world’s understanding of mobility is still stuck in the 20th century.”
Overconfidence in new technologies, however, could lead to greater risks, more accidents, and public pushback. Today, all consumer cars on the road are below Level 4, meaning they still require drivers to pay attention and intervene as needed. But drivers often become complacent and can be lulled into a false sense of security.
In March, a fatal crash in Anhui province involving a Xiaomi SU7 sparked widespread concern over vehicle safety. The car ploughed into a cement pole seconds after its driver took control from its self-driving system, killing three passengers. A month later, regulators banned carmakers from using the terms “smart driving” in their ads, and tightened rules around how self-driving technologies are deployed. The new guidelines mandate that driver monitoring systems cannot be disabled, and must detect when drivers remove their hands from the steering wheel.
Chinese AV companies have since been downplaying their cars’ intelligent driving features, with sales representatives only mentioning them when customers explicitly ask.
The AV industry’s “growth was probably too aggressive, and the education and awareness part really needed to catch up,” Tu Le, managing director of the consultancy Sino Auto Insights, told me.
In contrast, in the U.S., the debate over safety is playing out in courtrooms case by case, rather than with top-down, nationwide legislation. Earlier this month, a Florida jury found Tesla partly responsible for the fatal crash of an Autopilot-equipped Model S in 2019, and liable to pay $243 million to the victims.
Despite the crash and the regulatory tightening, China’s AV market shows no sign of slowing, with regulators aiming to resume Level 3 approvals by 2026. Establishing strong and transparent safety standards could restore consumer confidence, allow companies to scale with reduced risk, and give Chinese AVs greater credibility in foreign markets.
Chinese AV companies are already taking their cars abroad, to Southeast Asia, Europe, and the Middle East. Some are doing this through partnerships with established global firms. Last year, WeRide partnered with Uber to promote its vehicles in the United Arab Emirates — the first driverless robotaxi service in the Middle East. In July this year, WeRide launched a robobus fleet in Singapore. Baidu’s Apollo Go has deployed its robotaxis in Dubai and Abu Dhabi, and has plans to expand to other markets.
Chinese AV companies will most likely continue to target emerging markets, where data privacy rules and regulations are less strict, said Russo.
“Many regions will want to partner with China to upgrade their infrastructure and leapfrog over the Western world, whose understanding of mobility is still stuck in the 20th century.”
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