Xpeng, Li Auto Secure L3 Autonomous Driving Test Approvals in China
- ByStartupStory | December 17, 2025
Chinese EV makers Xpeng and Li Auto have received regulatory approvals to test Level 3 (L3) “hands-off” autonomous driving systems in their home cities, accelerating commercialization amid a cooling car market.
Regulatory Green Light for Urban Testing
Xpeng obtained L3 road test permits in Guangzhou, enabling routine testing on designated expressways and highways. Li Auto secured similar permits in Beijing for conditional autonomous driving on selected intelligent connected vehicle test roads. These approvals follow China’s Ministry of Industry and Information Technology (MIIT) certifying the first L3 models from state-owned Changan Automobile and BAIC’s Arcfox brand just days earlier.
L3 systems, per SAE International standards, allow hands-off operation while requiring driver readiness to intervene, advancing beyond current L2+ features that mandate steering wheel contact. Xpeng VP Yu Tao hinted at “surprises” in Q1 2026, aligning with its VLA 2.0 rollout targeting L4 capabilities.
Boost Amid Sales Slump
The move signals Beijing’s push for advanced driver assistance to revive demand, as November passenger vehicle sales dropped 8.1% year-on-year to 2.23 million units. Analysts note two-thirds of new cars now feature L2 or higher, with consumers expecting full autonomy soon, potentially spurring upgrades.
Xpeng, backed by Volkswagen, and Tesla rival Li Auto aim to validate safety for production approvals, possibly enabling multiple L3 models if tests succeed. This positions them against peers like Huawei’s HIMA, which began Shenzhen L3 internal tests.
Path to Mass Deployment
Success could unlock urban and highway pilots, bridging to commercial L3 vehicles in designated zones. As China leads global EV autonomy, these permits mark a pivotal step from testing to scaled rollout, differentiating premium brands in a price-war saturated market.
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