Volkswagen has started testing Level 3 automated driving on public roads in China after winning a road test permit in Hefei, the German carmaker said on Monday, hours after its Chinese partner XPeng received approval for Level 4 robotaxi operations in Guangzhou.
The permit allows real-world testing on public roads and data collection at scale as the company aims to have its Level 3 technology ready by 2027.
“At Volkswagen, safety and reliability come first in autonomous driving,” said Ralf Brandstätter, Member of the Board of Management of Volkswagen AG for China and Chairman and Chief of Volkswagen Group China.
“With this permit, we can test in real traffic in Hefei and collect data at scale. It is the next step on our road to Level 3 readiness,” he said.
Volkswagen did not say which authority issued the permit, which vehicles it is testing, how many cars are in the fleet or which roads they can use.
The permit comes days before Volkswagen holds its first Volkswagen Group China Technology Day in Hefei on Wednesday.
German President Frank-Walter Steinmeier begins a state visit to China on Tuesday and is expected to visit Volkswagen’s Hefei technology center.
Level 3
Level 3, or conditional driving automation, lets a vehicle perform the driving task by itself while requiring a human driver to remain available to take over when the system asks.
A road test permit is not a product approval. It lets Volkswagen test and collect data but not sell Level 3 cars to customers.
China’s Ministry of Industry and Information Technology (MIIT) granted its first conditional product approvals for Level 3 in December 2025, to two electric models from Changan Automobile and BAIC Motor’s Arcfox, allowing trials on select roads in Chongqing and Beijing.
China issued a mandatory national safety standard in July for vehicles with Level 3 and Level 4 automated driving systems, which takes effect on July 1, 2027, Xinhua reported. It sets requirements for human-machine interaction and for notifying users to prevent misuse.
The ministry also proposed this month that only cars with Level 3 or higher systems be allowed to carry blue-green marker lamps showing the system is in control.
A 2027 target set in July
Volkswagen set its Level 3 timetable in July, when it deepened its collaboration with Horizon Robotics through CARIZON, its intelligent driving joint venture in China.
“Deliveries of L3 capabilities are targeted to start already in the second half of next year,” Volkswagen Group China said at the time.
Under that agreement, CARIZON gained what Volkswagen called “white-box access” to Horizon’s AI foundation model, to help it build its own unified AI driving model.
“It enables us to advance our own L3 and L4 solutions faster, safely and at scale,” Brandstätter said in July.
The stack combines the AI model with CARIZON’s own C7H system-on-chip, which Volkswagen says is designed to support up to Level 4, and its GAIA world model data platform.
Han Sanchu, Executive VP of Volkswagen Group China and Chief Executive Officer of CARIAD China, has said Volkswagen aims for Level 3 in 2027 and Level 4 in 2029.
L2++
Volkswagen’s current system in China is CARIZON’s Hyper Sense 8, its first full-scenario driver assistance system, which offers navigation on autopilot on city roads and highways.
The L2++ system is being rolled out on seven new electric and plug-in models from Volkswagen’s Chinese joint ventures this year, before spreading to the wider lineup from 2027, the company said in July.
Two of those models, the ID.ERA 5S and the ID.AURA T6, have each drawn about 30,000 locked orders in four weeks, according to Brandstätter. Both run Hyper Sense 8 on Horizon Robotics chips.
Volkswagen’s sales in China have nonetheless kept falling. The group’s deliveries there dropped 38.5% in the third quarter to 405,800 vehicles, and it is relying on locally developed models and software to win back buyers.
XPeng’s lead in Guangzhou
XPeng, in which Volkswagen bought a stake in 2023 and with which it co-developed its China Electronic Architecture, is a step further along.
The Guangzhou-based carmaker said on Monday it had obtained a qualification for L4 robotaxi demonstration operationsthroughout Guangzhou. Its XPENG YOYO service will open gradually to riders through invitation codes.
XPeng’s robotaxi is based on its GX SUV, with four in-house Turing AI chips and a camera-based system that does not rely on LiDAR or high-definition maps.
The two carmakers are pursuing separate driving technology in China. Volkswagen’s driver assistance and Level 3 work run through CARIZON and Horizon Robotics, while XPeng develops its own chips and software.
Why Hefei
Hefei is Volkswagen’s main technology base in China. The group has invested more than 3.5 billion euros ($3.9 billion) in the city, where Volkswagen Group China Technology Company, its largest research center outside Germany, employs about 3,000 engineers.
Volkswagen Anhui, which builds models developed with XPeng, is also based in the city.
Hefei produced more than 1.37 million new energy vehicles in 2025, the most of any Chinese city, and is home to JAC, BYD and Nio.
Volkswagen first won permission to test autonomous cars in Hefei in August 2020, using Audi e-tron SUVs on about 80 km (50 miles) of open roads.
