China reins in self-driving car promotions after fatal Xiaomi crash

Crackdown on autonomous driving claims reshapes Auto Shanghai 2025.

A Xiaomi Corp. SU7 Ultra electric vehicle on display at the Shanghai Auto Show in Shanghai, China, on April 23, 2025. Photo by Qilai Shen/Bloomberg

By Anna Fadiah and Hayu Andini

China's automotive industry is undergoing a forced recalibration in its approach to promoting autonomous driving technology after a fatal accident involving a Xiaomi SU7 prompted swift government intervention. The tragedy, which claimed the lives of three young women, has cast a shadow over Auto Shanghai 2025 and intensified scrutiny over self-driving car promotions in China.

The incident occurred last month when a Xiaomi SU7 smart sedan, equipped with the company’s Navigate on Autopilot system, crashed on an expressway. The accident triggered a national conversation about the readiness of autonomous driving technology and the marketing surrounding it. Xiaomi's founder Lei Jun expressed sorrow, calling the event "heavy-hearted," and acknowledged the outpouring of public criticism. He confirmed the company was cooperating fully with police investigations.

Xiaomi, which entered the electric vehicle (EV) market with considerable fanfare, was expected to unveil its first electric SUV — the YU7 — at the country’s premier auto event. But the accident derailed that plan. Lei Jun, usually a magnet for large crowds at public appearances, opted to skip the Shanghai event. Nonetheless, Xiaomi said the SUV’s release timeline remains on track, with a launch scheduled for between June and July.

Beijing orders auto industry to scale back hype

The fatal crash prompted the Ministry of Industry and Information Technology (MIIT) to summon representatives from more than 60 automakers to deliver a stern warning: avoid exaggerating the capabilities of assisted driving technologies. The ministry emphasized that carmakers must “effectively enhance the safety level of intelligent connected vehicle products.”

This directive marks a turning point for self-driving car promotions in China. Auto Shanghai 2025, traditionally a stage for technological bravado, is noticeably more subdued this year. Rather than boasting about full autonomy, manufacturers are stressing safety features and using moderated language when referring to advanced driver-assistance systems (ADAS).

Carmakers shift tone amid tighter scrutiny

Global and local carmakers alike are adjusting their marketing strategies in response to Beijing’s crackdown. At a roundtable on Tuesday, Giovanni Lanfranchi, CEO of Zeekr Technology Europe, underlined the new industry ethos: “We need to be super paranoid about what we’ve achieved. Safety is very important.”

Mercedes-Benz, which launched its new CLA L model at the show, clarified that its ADAS platform still requires drivers to remain engaged. Oliver Thöne, head of Mercedes-Benz China, called the system “handy and reliable” but emphasized that driver supervision is mandatory. Ola Källenius, the company's global CEO, echoed that sentiment, noting the directive was a much-needed call for manufacturers to “clean up communication.”

Nio CEO William Li welcomed the regulatory move, stating, “We welcome the government’s tightening of the regulations over the ADAS sector.” Meanwhile, Volkswagen’s CEO Oliver Blume stressed that “safety is number one” and acknowledged that the rapidly evolving technology still has limitations: “You will never have a system with zero defects.”

Huawei leads new self-driving initiative

In tandem with 11 automakers and a government-affiliated regulatory body, Huawei announced a new initiative aimed at building public trust in assisted driving systems. Jin Yuzhi, who heads Huawei’s automotive unit, urged industry-wide efforts to “eliminate false advertising” and define the boundaries of smart driving features.

Huawei also introduced an updated ADAS platform, incorporating collision prevention tools and emergency support functions, such as response mechanisms for tire blowouts and driver incapacitation. The shift toward practical safety upgrades is emblematic of the changing narrative in self-driving car promotions across China.

From ‘God’s Eye’ to cautious terminology

Some of the adjustments have been semantic but symbolically significant. BYD, one of China’s EV giants, recently instructed influencers and domestic media outlets to drop terms like “God’s Eye” — the brand name of its self-driving feature — and avoid glamorizing descriptions such as “valet parking.” Other companies, including Huawei and Audi’s joint venture with FAW, have rebranded their smart driving systems using more reserved language like “combination assisted driving.”

This linguistic shift is a response to heightened public skepticism. Last week, two automotive industry associations issued a public petition calling on carmakers to clarify the “fundamental difference” between “driver assistance” and “self-driving.” The petition highlights widespread confusion among consumers about the extent of control these systems actually offer.

Chinese law and the limits of autonomy

Under current regulations in China, drivers are fully liable for accidents involving vehicles with Level 2 autonomous features. These include assistance with steering, braking, and acceleration — but still demand constant driver oversight. For Level 3 systems, which can manage more complex driving scenarios, responsibility is shared between drivers, insurers, and manufacturers, though these systems are not yet widely deployed.

This legal framework compounds the urgency for carmakers to align their messaging with regulatory expectations. As driver assistance systems become more advanced, the burden of ensuring public safety — and avoiding misinterpretation — rests heavily on how these features are marketed.

Foreign carmakers adapt to new Chinese norms

Tesla, BMW, and Mercedes-Benz, all heavily invested in China’s EV market, now face the challenge of syncing their global branding with local rules. While Tesla has long pitched its Autopilot and Full Self-Driving (FSD) systems as cutting-edge, it too has faced backlash in the United States and China over misleading promotional language. In light of Beijing’s clampdown, it’s likely that Tesla and other foreign companies will recalibrate their messaging to meet Chinese expectations.

Moreover, China’s tightening grip could have ripple effects in other markets. With global regulators watching closely, what happens in Shanghai this week may shape self-driving narratives far beyond China’s borders.

A pivotal moment for autonomous tech in China

China’s response to the Xiaomi SU7 crash represents more than a regulatory adjustment — it is a fundamental shift in how self-driving technology is perceived and promoted. The country's regulators are asserting greater control just as the technology nears a critical juncture in development and deployment.

For automakers, the new landscape demands caution, transparency, and a renewed focus on safety. As China redefines the parameters of acceptable marketing for self-driving car promotions, the world’s largest auto market is signaling that innovation must be matched with responsibility. What happens next will determine not only consumer trust, but also the trajectory of autonomous driving worldwide.