2025 is the inaugural year of intelligent driving (autonomous driving) for the entire nation. Within the next 2 to 3 years, advanced autonomous driving will become a necessity like seatbelts and airbags, and by then, cars without safe autonomous driving capabilities will be in the minority.
Recently, as noted by BYD Chairman Wang Chuanfu, who declared the inclusion of autonomous driving features in all vehicle models, China is flooring the accelerator toward an "autonomous driving era for everyone." Chinese automotive corporations are pouring vast sums into research and development (R&D) for autonomous driving technology, and the government is easing regulations to pave the way. With China already dominating the global electric vehicle market, it is noteworthy whether it will also take the lead in the next-generation smart car sector equipped with autonomous driving technology.
◇ China aims to commercialize L3 this year… Guaranteeing 'autonomous driving equality'
On the 28th, following BYD's introduction of the "God's Eye" on the 10th, Tesla began updating its "Full Self-Driving (FSD)" software on the 26th, leading to ongoing comparisons. The Chinese economic media outlet Chailyan noted, "The world's two leading companies in the new energy vehicle sector have begun a head-to-head competition in China's autonomous driving field." Currently, the sentiment in China leans toward supporting BYD. In terms of price, BYD has taken the lead. Although BYD has differentiated functions by model, it has effectively made autonomous driving a standard option in its small electric vehicle "Seagull," priced at 70,000 yuan (approximately 13.9 million won). In contrast, customers must pay 64,000 yuan (approximately 13 million won) for Tesla's FSD features, which are also limited to certain models. The performance of the North American version of FSD reportedly falls short, disappointing some Chinese consumers.
However, analysts indicate that Tesla's approval for FSD in mainland China is significant. To increase its sales in China, Tesla will have no choice but to sequentially update the FSD features, which is expected to further accelerate the competition among Chinese automotive companies for securing autonomous driving technology. Beijing Business Daily remarked, "Whether Tesla can enhance its level of intelligence will be key to finding breakthroughs in sales," and added, "As Tesla's FSD finds its way in China, the automotive industry's autonomous driving war is on the brink of eruption."
Starting this year, China's automotive and information technology (IT) sectors are competing in technology development under the banner of "autonomous driving equality." Earlier this year, state-owned Changan Automobile announced through its "Beidou (North Star) Tianfu 2.0" plan that it will only develop smart cars from this year onward, aiming to release 35 models over the next three years. Starting in August, it plans to incorporate autonomous driving features into vehicle models priced above 100,000 yuan (approximately 20 million won). The day before, Li Auto released the "AD MAX 13" system, trained with 10 million images.
In particular, China is on the verge of entering the "L3" stage, where driver intervention is unnecessary except in emergencies. Currently, most vehicles are at the L2 stage requiring driver engagement, with significant adoption underway, except for Baidu, which operates fully autonomous "robo-taxis" at the L4 level. According to the Ministry of Industry and Information Technology, the penetration rate of passenger cars with L2 capabilities was 55.7% in the first half of last year, and it is expected to exceed 65% this year. Li Auto and Xiaopeng, often referred to as the "Chinese Tesla," aim to release L3 systems within this year. Yu Chengdong, CEO of Huawei's smart car solution division, stated, "The commercialization of L3 by 2025 is our top priority."
◇ China welcomes Tesla's entry… Aiming to dominate the autonomous driving market
China is demonstrating confidence in the autonomous driving sector. The warm reception in the industry following the news of Tesla's FSD release is a prime example. Xiaopeng CEO He Xiaopeng expressed, "We welcome Tesla's FSD launch," adding that it "will promote communication and development within the autonomous driving industry." Li Auto CEO Li Xiang stated, "I hope media and influencers will compare Li Auto cars with Tesla's FSD across the country." Avita President Chen Jue also expressed hope that through mutual exchanges with Tesla, they can jointly promote the arrival of the autonomous driving era.
China believes it can dominate the smart car sector equipped with autonomous driving systems, following its firm hold on the global electric vehicle market. This confidence is based on the fierce R&D competition among corporations. For instance, BYD invested 33.6% more in R&D in the third quarter of last year, totaling 33.32 billion yuan (approximately 6.66 trillion won) compared to the same period the previous year. Currently, the number of research personnel focused on autonomous driving technology reaches 5,000. Chairman Wang Chuanfu revealed plans to invest 100 billion yuan (approximately 19.8 trillion won) solely in autonomous driving during a shareholders' meeting last June.
Strong government support is a source of confidence for them. Leading with the capital city, Beijing, which approved the use of autonomous driving features in electric buses, rental cars, and shared vehicles, various local governments are relentlessly working on policies and standards. The state-run People's Daily reported that "as of the end of last year, a total of 16,000 autonomous driving test licenses had been issued nationwide, and 32,000 kilometers of test roads had been opened," adding that "China is accelerating the improvement of its autonomous driving regulation system."
China's financial media predicts that the market size for autonomous driving in China will surpass 500 billion yuan (approximately 99.2 trillion won) this year. It added that "Chinese corporations possess the strength to compete directly with Tesla, thanks to their robust technological capabilities and ongoing R&D investments," noting, "The Chinese government places significant importance on the development of autonomous driving technology and provides strong support, and as the technology becomes increasingly mainstream, related regulations and policies are continually being improved."