China has prohibited automakers from marketing their vehicles with misleading language such as “autonomous driving” and “intelligent driving,” as regulators impose sweeping new restrictions following a deadly crash involving driver-assistance technology.
The sweeping restrictions, announced at an April 16 meeting with nearly 60 automotive executives, require companies to use precise technical classifications instead of promotional language that regulators say misleads consumers about vehicle capabilities.
The crackdown was triggered by a March 29 highway crash in Anhui Province that killed three college students when their Xiaomi SU7 sedan, operating in “Navigation on Autopilot” mode, collided with a concrete barrier at 97 kilometers per hour and burst into flames.
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Under the new rules, automakers must:
- Replace marketing terms with Society of Automotive Engineers classifications ranging from “Level 0” to “Level 5”
- End public beta testing programs without official approval
- Disable unsupervised functions like automated valet parking
- Ensure driver monitoring systems cannot be turned off
The regulations particularly impact Tesla (NASDAQ: TSLA), which had to pause its “Full Self-Driving” rollout in China and rebrand the system as “Intelligent Assisted Driving.” Chinese companies including Xiaomi, Xpeng, Li Auto, and Nio also face significant marketing overhauls.
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“The blurring of boundaries in marketing and the distortion of user perception have become a growing problem,” said Zhang Jinhua, president of the China Society of Automotive Engineers.
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Xiaomi’s stock fell more than 5% following the crash announcement, erasing roughly $15 billion in market value over two days. The company said its vehicle data showed the system detected obstacles and began slowing before the driver attempted to take control.
The new requirements mandate that emergency software updates be treated as vehicle recalls requiring regulatory approval, and that drivers who remove their hands from the wheel for more than 60 seconds will trigger automatic safety responses, including vehicle deceleration and emergency stops.
The regulations could accelerate consolidation in China’s competitive electric vehicle market, where autonomous driving features have become key selling points among younger consumers.
China’s hands-on regulatory approach contrasts with looser oversight in markets like the United States, where Tesla’s “Full Self-Driving” branding has faced criticism but remains largely unregulated despite requiring constant driver supervision.
China’s crackdown contrasts with the looser oversight in markets like the United States, where Tesla’s “Full Self-Driving” branding has faced criticism but remains largely unregulated despite requiring constant driver supervision.
These restrictions also come as China positions itself to dominate the global autonomous vehicle market, with analysts projecting the country will account for over 60% of Level 3 vehicle production by 2030.
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