In late October 2026 Volkswagen received approval to test Level 3 (L3) automated driving in Hefei, Anhui province, through Carizon, its software joint venture with Chinese chipmaker Horizon Robotics. At L3, the car drives itself in defined conditions and the driver need not supervise, but must take over when asked.
The details
According to electrive and the South China Morning Post:
- the approval covers road testing of Carizon's L3 system in Hefei;
- Volkswagen is aiming for series production of the technology in China from 2027;
- the permit is part of a wider wave of Chinese approvals, with Xpeng starting Level 4 demonstrations in Guangzhou in the same week. Last week's round-up covered the Guangzhou licence.
Regulatory context
China has been moving quickly from pilot zones to formal permits for higher levels of automation. Our 27 October round-up covered a second batch of L3 product-access approvals. Unlike most of those, Volkswagen's approval goes to a foreign carmaker working through a local partner, showing that Beijing's framework is open to joint ventures that keep data and software development in China.
The SCMP links the permits to a race among Chinese and foreign carmakers to commercialise autonomy. It cites projections that the robotaxi market could be worth US$1 trillion by 2040.
Why it matters financially
For Volkswagen, China is its largest market and the place where it is losing ground to local electric-vehicle makers on software. An L3 permit is an important step towards selling higher-value autonomous features there. Chinese approvals for foreign joint ventures also set expectations for regulators in Europe, where L3 approvals remain limited.