China grants permits to VW joint venture, Xpeng as autonomous driving race intensifies
China has granted new autonomous-driving permission to electric vehicle (EV) maker Xpeng and a mainland joint venture of Volkswagen, intensifying the commercialisation race between China’s autonomous driving firms and US company Tesla. Xpeng would now be allowed to conduct “demonstration operations” of its Yoyo driverless taxis in the capital city of southern China’s Guangdong province under a…
China's government has granted permits to both electric vehicle maker Xpeng and the Volkswagen-Anhui joint venture to test autonomous driving technologies. This intensifies the competition between Chinese companies and US firms like Tesla in commercialising autonomous vehicles. Xpeng will be able to conduct "demonstration operations" of its Yoyo driverless taxis in Guangzhou, southern China, after receiving the licence.
This permits the robotaxis to carry paying passengers, a crucial step before they can operate commercially. The licence is seen as a significant validation for fleet operators before gaining full regulatory approval. Xpeng's Yoyo robotaxi achieved level 4 (L4) autonomous driving capabilities, meaning it can operate without human intervention in specific, mapped environments.
Volkswagen-Anhui secured a Level 3 permit in Hefei, eastern China, allowing its joint venture with JAC Automobile Group to carry out real-world road testing and data collection for conditionally automated driving. The race for autonomous driving supremacy is heating up between China and the US, with both countries already operating commercial robotaxi services in 11 and 10 cities, respectively, as of March, according to the International Energy Agency.
China aims to mass-produce vehicles with autonomous driving capabilities by 2030. Xpeng's robotaxis will join those of other licensees in Guangzhou, including Pony.ai, WeRide, Baidu, and Guangzhou Automobile Group. Tesla plans to launch its Cybercab robotaxis by the end of this year, but revenue from robotaxi services is not expected until 2027.
Meanwhile, Xpeng is exploring overseas opportunities, with CEO He Xiaopeng discussing talks with European ride-hailing platforms. Despite facing a subsidy reduction and domestic competition, Xpeng's loss widened by 173% year on year to 3.1 billion yuan (US$465 million) in the first half of the year. The global robotaxi market is projected to reach US$1 trillion by 2040, with Chinese players like Baidu, Xpeng, and WeRide expected to lead the way alongside global leaders like Tesla and Waymo.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
