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Over the past decade, Level 2 systems have proliferated in China, including Tesla’s Full Self Driving system, as well as the Xiaomi feature involved in the March crash. The capability ranges from basic vehicle following on highways to handling most tasks on busy urban roads, under driver supervision.
Automakers have pushed down hardware costs to levels that allow them to offer Level 2 features at little or no extra cost. China’s No. 1 automaker BYD (002594.SZ), opens new tab has rolled out its “God’s Eye” assisted-driving software for free across its entire product line-up. More than 60% of new cars sold in China this year will have Level 2 features, according to an estimate from research firm Canalys.

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While Chinese officials want to prevent carmakers from overselling the capabilities of such systems, they are also threading the needle between innovation and safety to ensure their automakers don’t lose out to U.S. and European rivals.
Setting clear regulations for assisted-driving tech without slowing its advancement could give China’s industry an edge over global competitors, analysts say. This approach is in stark contrast to the U.S. market, where companies pursuing autonomous cars have expressed frustration that the government has not implemented a regulatory system to validate and test the technology.

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