L3 Autonomous Driving Gains Policy Boost but Faces High Costs, Poor Experience, and Handover Challenges

In December 2025, China’s Ministry of Industry and Information Technology (MIIT) granted the first batch of L3-level autonomous driving access permits to Changan Deepal and BAIC Arcfox. In January 2026, Chongqing issued the nation’s first dedicated license plate for L3 vehicles. On June 16, 2024, MIIT released a draft of mandatory safety standards specifically for L3/L4 autonomous driving systems, scheduled to take effect on July 1, 2027. The key distinction between L3 and L2 lies in liability allocation: under L2, drivers bear full responsibility for accidents, whereas under L3, if an accident occurs while the system is active, the automaker assumes liability. To mitigate payout risks, automakers must incorporate extensive redundancy into their designs, significantly increasing costs. According to Changan Automobile, the optional cost increase for its next-generation L3 system will be capped at RMB 30,000. However, L3 faces a “handover paradox”: although it allows drivers to take their hands off the wheel and eyes off the road, they must remain attentive enough to resume control within 3 to 10 seconds. In practice, drivers struggle to quickly regain situational awareness after relaxing. Additionally,出于 safety concerns, automakers generally calibrate L3 systems conservatively, causing frequent disengagements and occasional “phantom braking,” which degrades user experience. By contrast, current L2+ systems offer broader operational design domains (ODD), clearer liability boundaries, simpler accident handling procedures, and more mature functionality. Some automaker executives argue that L3 delivers limited user experience improvements and low commercial value, suggesting skipping this stage altogether. Currently, automakers are advancing L3 primarily for regulatory compliance and strategic technological positioning. For average consumers, opting for stable and reliable L2+ systems remains the more prudent choice until the mandatory standards take effect in 2027, technical issues are resolved, and costs decline.