Cars with autonomous features are divided into six levels. At level zero a vehicle has no automation; at level five it does everything by itself. Much of the consumer market's attention is on level two (L2) and level three (L3). An L2 car can steer, accelerate and brake by itself but requires a human driver's sustained attention. A driver in an L3 car can check e-mails and watch TV, so long as he or she is ready to take over swiftly in an emergency. L4 vehicles, known as "robotaxis", are driverless cars permitted to ferry passengers within limited areas.
In 1995 researchers from Carnegie Mellon University drove 3,000 miles from Pittsburgh to San Diego without their hands on the steering wheel in the "No Hands Across America" tour. Thirty years later, Waymo, Tesla and Zoox operate robotaxi services in several American cities. Waymo has the world's biggest fleet, with 2,500 autonomous L4 cars providing paid rides in five cities; it surpassed 1m monthly active users in April 2025. Tesla has expanded its rudimentary robotaxi service (still between L2 and L3, with a human safety monitor) from Austin to San Francisco. Zoox, owned by Amazon, offers autonomous rides in Las Vegas and parts of San Francisco in a quirky vehicle without a steering wheel or pedals that can go in both directions.
Human drivers account for an estimated 50-70% of the cost of a traditional ride-hailing service. Yet all robotaxi services currently lose money. BCG estimates self-driving vehicles cost $7-9 a mile to operate, compared with $2-3 for traditional ride-hailers and $1 for personal cars. McKinsey estimates it will take a decade to bring robotaxi costs below $2 a mile. Dara Khosrowshahi of Uber has said that the market for self-driving technology could be worth $1trn or more in America alone, including software for long-haul trucks and delivery vans.
In a recent YouGov survey three-quarters of Americans said they had little or no trust in self-driving taxis. But J.D. Power found that confidence was 56 percentage points higher among those who had actually ridden in one. Under Donald Trump the Department of Transportation has said it will develop federal regulations for autonomous vehicles.
China is building a decisive global lead in autonomous driving. More than half of new cars sold in China are classed as L2. Morgan Stanley estimates that by 2030 China alone will account for half of the world's L2+ cars, an especially clever subset. Goldman Sachs expects China will have 5,000 robotaxis on the road by the end of 2025 and 632,000 by 2030, far outpacing America's 1,800 and 35,000 respectively.
Hyper-competition, strong supply chains and robust government backing enable what foreign firms call "China speed". Censorship of news related to accidents and a population optimistic about technology also play a role.
China's road-traffic safety law still assumes that all cars have fully active human drivers. But leaders in Beijing have given the industry room to develop by setting ambitious targets for adoption and issuing guidance. National standards for L2 and L3 systems remain in draft form, even though many L2 cars are already on the road, but piecemeal standards on software updates and data recording took effect in January 2026.
China's approach contrasts with Europe, where carmakers grumble about obstacles to testing on public roads. In China a "test first, regulate later" model helps regulators and industry learn together. More than 50 Chinese cities have written their own competing policies on liability, testing guidelines and subsidies—a patchwork that provides plentiful examples for national lawmakers. By 2024 more than 32,000km of road across China had been approved for testing autonomous driving. In Beijing, by end of 2023 techies had clocked up 39m kilometres of testing, mostly on the outskirts. Wuhan handed out its first licences to fully driverless robotaxis in 2022; passengers can now hail them on one-third of its streets.
American automakers face a higher risk of costly lawsuits, public protests and government investigations than their peers in China. Use of L2 systems such as Tesla's "Autopilot" and "Full Self-Driving" is rising, but regulatory caution and litigation risk slow deployment.
Over 50 Chinese cities allow testing of self-driving cars on public roads. In at least ten, commercial robotaxi operations are up and running—twice the number in America. China has 139 cities with over 1m people and an urban population more than three times as large as America's. Baidu's Apollo Go, Pony.ai, WeRide and CaoCao Mobility (the ride-hailing arm of Geely) all operate robotaxi services. Momenta, an autonomous-software startup, is building robotaxis with SAIC, a state-owned carmaker. Xpeng recently said it would start producing dedicated robotaxis next year.
HSBC puts the average cost of a Chinese robotaxi at $40,000, compared with $130,000-200,000 for Waymo's vehicles. Four Chinese companies, led by Hesai, control around 90% of the global lidar market. More than 70 new regulations for autonomous driving were put in place in various districts, cities and provinces in the first half of 2025 alone. Officials in Beijing have been reluctant to move forward with trials and have little intention of allowing robotaxis into the centre of the capital soon.
Chinese robotaxi operators are looking abroad. Pony.ai is testing in Luxembourg, has pilots in Dubai and Seoul, and has permission to operate across South Korea. Apollo Go has permissions to test in Abu Dhabi and Dubai, and plans to start tests in Switzerland with PostBus. WeRide has permits to test or run commercial robotaxis in six countries outside China. UBS reckons the robotaxi market outside China could be worth more than $210bn by the late 2030s, excluding America.
In March 2025 a student's Xiaomi SU7 crashed on a motorway in Anhui province after the driver-assistance system warned of an obstacle and the driver took over, killing all three occupants. The accident prompted China's industry ministry to gather 60 automakers and warn them against marketing L2 driver-assistance systems as "autonomous driving". In September 2025 regulators published draft national safety standards that all L2 cars will have to meet, which may require cars to turn off the driver-assistance system if the driver becomes disengaged. That same month regulators required Xiaomi to fix 117,000 SU7 cars because the system "may not be able to adequately recognise, warn against, or handle extreme scenarios". In February 2025 officials said automakers would have to do more testing and get approval before sending remote updates to systems already in the wild.
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