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China Urges Cautious but Rapid Development of Assisted-Driving Technology

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China’s automakers are rapidly advancing assisted-driving technology, eager to capture a growing market. However, Beijing is pushing for a balanced approach—accelerate innovation but ensure safety and accountability.

Key Points:

  • Rapid Innovation, Careful Oversight: Chinese regulators are finalizing new safety rules for driver-assistance systems following a fatal crash involving a Xiaomi SU7 sedan in March, which killed three occupants shortly after the driver resumed control from the system.

  • Regulatory Approach:

    • China bans terms like “smart” and “autonomous” in marketing to avoid overselling capabilities.

    • Current rules allow automatic steering, braking, and acceleration only with driver engagement.

    • New regulations will require hardware/software to monitor driver alertness and control readiness.

  • Collaboration and Public Input:

    • Regulators worked with Dongfeng and Huawei to draft rules, with public consultation ending recently.

    • Plans to resume Level 3 validation tests this year after being paused post-Xiaomi crash; the first Level 3 vehicle approval expected in 2026.

  • Level 3 Ambitions:

    • Level 3 allows drivers to take eyes off the road under certain conditions—midway between basic driver-assist and full autonomy.

    • China has promoted Level 3 tests and aims to be a global leader in assisted-driving tech.

  • Industry Competition:

    • China’s automakers like BYD and Zeekr are aggressively pushing Level 2 and Level 3 tech, often offering features at low or no additional cost.

    • At the Shanghai auto show, Huawei and Geely’s Zeekr highlighted Level 3 readiness.

    • Traditional foreign automakers like Mercedes-Benz and Volkswagen focus on advanced driver-assist features but hold back on Level 3 due to higher costs and liability concerns.

  • Safety and Liability:

    • New regulations hold manufacturers and suppliers liable for accidents caused by system failures, similar to recent UK legislation.

  • Strategic Context:

    • China is using this push to support its domestic auto industry, much like its earlier backing of electric vehicles.

    • Over 60% of new cars sold in China this year are estimated to include Level 2 driver-assist features.

Expert Insights:

Markus Muessig of Accenture Greater China notes that China’s “feel the stones to cross the river” approach—steady, cautious exploration of new tech—has been effective. Meanwhile, Mercedes-Benz’s CTO Markus Schaefer highlights the ongoing challenges with balancing cost and safety requirements for Level 3 systems.

Xiaomi Faces Backlash as YU7 EV Buyers Confront Year-Long Delivery Delays

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Buyers of Xiaomi’s new YU7 electric SUV are voicing growing frustration after being told they may have to wait up to 60 weeks for delivery, despite paying a non-refundable deposit. The smartphone giant turned automaker received around 240,000 orders for the YU7 in the first 18 hours after sales opened last Thursday, but only a limited number of vehicles were available for immediate delivery.

By Tuesday, Xiaomi’s official app indicated wait times of 38 to 60 weeks, Reuters confirmed. More than 400 customer complaints have since been filed on the Sina Black Cat consumer complaint platform, with many saying they were unaware of the lengthy wait until after confirming their orders. Customers paid 5,000 yuan ($698) upfront and are now demanding refunds, citing concerns about EV tax exemptions expiring by year-end.

Xiaomi has not publicly responded, but CEO Lei Jun said he would address customer concerns in a livestream event on Wednesday via Weibo, where he has nearly 27 million followers.

The backlash mirrors earlier issues with Xiaomi’s first EV, the SU7 sedan, which debuted in March 2024. Though SU7 buyers initially faced seven-month delays, the car eventually outsold Tesla’s Model 3 in China from December onward. However, the SU7 brand image was hit by a fatal crash in March, and since then, Xiaomi has also faced complaints about unclear delivery schedules and optional feature configurations.

The YU7, Xiaomi’s second EV, is priced from 253,500 yuan ($35,360) — nearly 4% cheaper than Tesla’s Model Y, the best-selling SUV in China. Xiaomi has made clear its ambition to directly challenge Tesla’s dominance in China’s EV market.

To meet demand, Xiaomi is scaling up production at its Beijing factory, raising monthly output from 4,000 units in March 2024 to 28,000 in May, and is preparing to expand to two new factory sites nearby.

Still, unless transparency improves and production catches up, Xiaomi risks damaging its EV reputation — especially at a time when consumer trust and timely delivery are becoming major differentiators in China’s competitive electric vehicle landscape.

Xiaomi Tops Wearables Market in Q1 2025 with 19% Share, Surpassing Apple: Canalys Report

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Xiaomi reclaimed its position as the leading vendor in the wearable band market during the first quarter of 2025, following the launch of refreshed Mi Band and Redmi Watch models earlier this year. According to a Canalys report, the Beijing-based tech giant surpassed Apple, driven by a remarkable 44 percent year-over-year growth in shipments. Other notable players in the market included Huawei, Samsung, and Garmin, who secured third, fourth, and fifth places respectively. The surge in Xiaomi’s sales highlights its growing appeal among consumers seeking affordable and feature-rich wearable devices.

The Canalys Wearable Band Analysis report further revealed that global shipments of wearable bands reached 46.6 million units in Q1 2025, marking a 13 percent increase compared to the same period last year. Basic wearables, known for their simplicity and affordability, led the growth, with Xiaomi shipping the highest volume thanks to its new releases: the Xiaomi Smart Band 9 and Redmi Band 5. The Redmi Band 5, in particular, emerged as Xiaomi’s best-selling device, helping to secure its top spot in the market. Apple and Huawei followed closely behind, holding the second and third positions.

Apple’s market share in the wearable band segment stood at 16 percent during Q1, and Canalys predicts that this figure will rise in the latter half of 2025. This optimism is fueled by the upcoming launch of Apple’s 10th-anniversary smartwatch, which is expected to attract significant consumer interest. Meanwhile, Huawei experienced a solid 36 percent growth in shipments year-on-year, reaching 7.1 million units. This growth was largely driven by the strong performance of Huawei’s Fit and GT wearable series.

The Canalys study also shed light on consumer preferences in the smartwatch market, highlighting affordability, long battery life, and robust health tracking features as the top priorities for buyers. These factors are shaping the competitive landscape as manufacturers race to deliver devices that balance cost, functionality, and user experience. Xiaomi’s recent success demonstrates how aligning product offerings with these consumer demands can lead to substantial market gains.