China Clears First Hands-Off Cars, Igniting High-Stakes Autonomous Race

China just fired the starting gun on the autonomous vehicle arms race. The first batch of hands-off cars has cleared regulatory hurdles, setting the stage for a brutal, multi-billion dollar competition that will reshape global mobility.

The Green Light for Autonomy

Forget prototypes and pilot zones. This is the real deal: production-ready vehicles approved for conditional, driverless operation on public roads. The approval doesn't just validate technology—it unleashes market forces. Every major automaker and tech giant with skin in the game just got their marching orders. It's innovate at warp speed, or get left in the dust.

Winners, Losers, and the Capital Chase

The scramble for dominance is now fully funded and operational. Expect venture capital to flood into sensor suites, AI decision-making engines, and mapping technologies. The supply chain will become a battlefield. Legacy manufacturers face an existential 'adapt or die' moment, while agile startups see a once-in-a-generation window to disrupt. It’s a classic tech land grab, only the territory is physical asphalt and the trophy is data—tons of it.

Beyond the Hype: The Road Ahead

Clearing the cars was the easy part. Now comes the hard grind: scaling infrastructure, convincing a skeptical public, and navigating the ethical minefield of algorithmic decision-making. Safety isn't just a feature; it's the entire product. One high-profile failure could slam the brakes on the entire industry. The real competition isn't just about who has the best car, but who can build the most resilient and trusted ecosystem. Watch for alliances, brutal price wars, and a few spectacular flameouts. After all, if the last tech boom taught us anything, it's that you can burn a lot of cash racing toward a future that's perpetually five years away.

Firms are seeking level 3 driving clearance

These systems allow drivers to take their hands off the wheel under certain conditions, though people must still remain alert and ready to step in.

This matters because most cars sold with advanced features today still require constant human control. Until now, systems used in China have largely helped with steering or braking but stopped short of letting drivers fully disengage, even for short periods.

Now companies are looking for level 3 driving clearance. As was reported by Cryptopolitan, XPeng plans to launch robotaxis and humanoid robots in 2026, powered by its own chips. The company says testing will start in Guangzhou before expanding, as Chinese carmakers push beyond assisted driving into full systems built around automation.

The ministry stressed that the two newly approved models can only operate in designated zones. Changan’s car will be allowed to manage busy city roads at speeds of up to 50 kilometers an hour. BAIC’s Arcfox model can handle highways and expressways, with a higher ceiling of 80 kilometers an hour.

Both vehicles passed safety checks and road tests, according to the ministry. Officials said they WOULD continue to watch how the cars perform while supporting the wider development of smart driving across the industry.

China is yet to fully legalize driverless cars nationwide

China has not yet fully legalized level-three driving nationwide. Under global standards, such systems are classed as hands-off, but not mind-off. Drivers remain legally responsible and must be able to retake control at any moment, unlike in the far-off vision of fully driverless cars.

“The approvals showed that authorities were willing to deregulate the market,” said Phate Zhang, founder of Shanghai-based data firm CnEVPost. He added that regulators were likely to MOVE gradually rather than opening the door to everyone at once.

That slow approach reflects a balancing act. Beijing wants to support innovation in electric vehicles, an area where Chinese brands now lead globally. At the same time, it is wary of safety risks and public backlash if systems fail on busy roads at a time the market has been growing.

Sales of cars with advanced driver support have risen sharply in recent years, with many buyers in China keen to try new technology, especially when it promises to ease traffic stress in crowded cities. Carmakers have leaned into this demand, offering features once limited to luxury brands.

For now, Beijing’s approval sends a signal rather than a green light for mass rollout, but carmakers can begin building the models. However, the tight limits show regulators intend to learn as they go.

The move also puts pressure on rivals and other manufacturers are likely to seek similar approvals, hoping to avoid being left behind as rules slowly evolve.

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