Artificial Intelligence China Opens AI Market to Western Automakers – With Conditions

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Mercedes, Tesla, and Volvo are allowed to use AI chatbots in their vehicles. The technology comes from Byte Dance and Deepseek. Without it, they face expulsion from the market.

The first foreign car manufacturers have been able to register AI chatbots for their cockpits in China. The Cyberspace Administration in Beijing registered the "Mercedes-Benz Virtual Assistant" on November 11, according to the South China Morning Post in Hong Kong. On the same day, the Cyberspace Administration in Shanghai registered AI chatbots for Tesla and Volvo.

Both authorities are local branches of the powerful China Cyberspace Administration (CAC), the country's top supervisory body for cybersecurity and data protection, which also oversees the use of AI models in the People's Republic.

All three currently registered car chatbots from foreign OEMs utilize large language models (LLMs) to provide better customer service to drivers either in the car itself or through their own smartphone app. This type of adoption of generative artificial intelligence is rapidly spreading in the Chinese automotive industry.

Mercedes Equips CLA with AI

The "Mercedes-Benz Virtual Assistant" is designed to provide drivers of the new all-electric CLA models with services such as voice control of vehicle functions and "intelligent navigation," reports the Chinese electronics trade publication Zhongguo Dianzi Bao. By next year, 70,000 Mercedes vehicles in China are expected to be equipped with this technology.

According to the report, the chatbot is based on the Yunque model developed by the Chinese AI company ByteDance. "Yunque" translates to "skylark" in English. Therefore, some English reports refer to it as "Skylark AI." ByteDance is the parent company of Douyin, known globally as TikTok. The report further states that it can "become smarter the more it is used."

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The AI is intended to make the cockpit in the Chinese CLA models more powerful from the outset compared to previous versions. The wake-up response time is reduced to 0.2 seconds, and the overall time for executing spoken commands is lowered to 0.8 seconds, as reported. This represents a performance increase of one and a half times compared to previous assistants.

Tesla xBot Offers Customer Service

Tesla's xBot customer service is an intelligent "Q&A" application for Tesla owners. Through the online customer service module in the Tesla app, it analyzes user inquiries and generates appropriate responses in multi-step dialogues. For example, users can inquire about vehicle prices, book test drives, or locate Tesla charging stations.

According to Chinese media reports, Tesla has also relied on Chinese AI technology. The recent registration "formalizes" partnerships with ByteDance and Deepseek, it was reported.

Volvo's AI Service Accessible Through Other Platforms

Volvo, which is predominantly owned by Chinese interests, is still mentioned in the same breath as the other two foreign automakers that have recently managed to register their chatbots in the People's Republic.

Volvo's "intelligent assistant XiaoWo" can be accessed via the OEM's app or through mini-services on other platforms, such as WeChat. It can also be integrated into the voice control system in the vehicle itself, allowing it to answer questions about vehicle usage, purchasing, or maintenance.

AI Technology: Important for Continued Market Access

Both cyberspace regulatory authorities have already registered more than a hundred Chinese AI chatbots for domestic automakers. Compliance with the regulations and laws of the CAC is being verified for this purpose. However, analysts in Beijing and Shanghai note that registration does not equate to final market approval.

Nevertheless, with these initial registrations, the Chinese government signals that foreign automakers are granted access to the Chinese automotive market even in the AI era, and that data security or issues of "national security" will not be used as an excuse to exclude them from this market.

Without AI chatbots, foreign car models would soon become uncompetitive in China, as the adoption of AI in the cockpit is rapidly spreading and car buyers will come to expect this as a norm within a few years. "It is generally anticipated that the next generation of vehicle models will inevitably be equipped with generative AI technology," writes the consulting agency McKinsey Greater China.