China grants permits to VW joint venture and Xpeng as autonomous driving race intensifies

China has recently granted new autonomous-driving permits to electric vehicle maker Xpeng and a Volkswagen mainland joint venture, fueling the commercialization race between Chinese firms and US company Tesla. Xpeng is now permitted to conduct demonstration operations of its Yoyo driverless taxis in Guangdong province's capital, marking a significant test for fleet operators before gaining approval for commercial operations.

This license allows the robotaxis to carry paying passengers and will enable Xpeng to gather real-world operational validation, ultimately leading to comprehensive solutions for global partners and large-scale commercial deployment. The company's Yoyo robotaxi currently offers level 4 (L4) autonomous driving capabilities, where vehicles can operate without human intervention in specific, mapped environments or conditions.

Volkswagen (Anhui) Automotive Company secured a Level 3 autonomous driving road test license in Hefei, Anhui province, where the joint venture between Volkswagen and JAC Automobile Group has already begun real-world road testing and data collection for conditionally automated driving technology. As the global robotaxi sector is projected to become a $1 trillion market by 2040, Chinese players like Baidu, Xpeng, and WeRide are expected to be regional frontrunners, alongside global leaders Tesla and Waymo.