China's Smart Driving Goes Global: VW Turns to Chinese Partners as Global AV Regulations Take Hold

Recently, two pivotal developments have accelerated the globalization of China's intelligent driving industry. First, Volkswagen, citing slow progress and cost pressures, plans to terminate its collaboration with Bosch in autonomous driving and shift its focus toward Chinese tech companies for its intelligent driving supply chain. Second, the United Nations World Forum for Harmonization of Vehicle Regulations (WP.29) has officially released the world’s first technical regulation for automated driving systems—the ADS GTR—co-developed with China’s active participation. Under the new regulation, DCAS UN Regulation No. 171, Series 02, approved by WP.29, will become mandatory in the European Union six months after its adoption. Starting around the end of 2026, autonomous vehicles meeting these standards will be legally permitted to enter global markets. Jointly led by multiple countries including China, the regulation requires that automated driving systems perform at least as well as a competent human driver. Manufacturers must demonstrate that their systems are robustly designed, comply with traffic rules, pose no unreasonable safety risks, and are equipped with data storage devices. Previously, inconsistent autonomous driving regulations across countries forced automakers to adapt their vehicles to varying—and sometimes conflicting—standards for export. The ADS GTR establishes a globally harmonized regulatory foundation, significantly reducing compliance costs. Currently, China’s advanced driver-assistance systems (ADAS) market is highly competitive, while regions like Europe and Southeast Asia are still in the early stages of intelligent vehicle upgrades. With the implementation of this regulation, European automakers now face not only intensified competition in the Chinese market but also mounting pressure to accelerate their own intelligent transformation at home. Backed by supportive policies, Chinese companies have already accumulated valuable experience in regulatory compliance procedures, road testing, and emergency response mechanisms, giving them a first-mover advantage in the global arena. However, expanding overseas remains challenging: Europe’s complex road environments, diverse climates, and distinct driving habits require extensive localization of algorithms and systems—demanding substantial investment of both time and capital. The enforcement of the ADS GTR now creates favorable conditions for Chinese automakers to enter the European market.