Faster Commercialization China: New Liability Rules for Autonomous Driving in the Works

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In China, automakers will be held liable in the future if traffic laws are violated while the vehicle is in autonomous driving mode. This measure is also intended to accelerate the commercialization of autonomous driving.

The Standing Committee of the National People’s Congress discussed a corresponding amendment to the law on August 25, 2026, according to the official news agency Xinhua. A separate, new chapter is dedicated to autonomous vehicles in the amendment. In the future, it will make a difference whether autonomous driving functions are activated or not. If they are, the manufacturer or importer will be held liable. If, on the other hand, the system is deactivated, the familiar rules for conventional cars will continue to apply. “This means that autonomous driving is moving beyond the phase of pilot projects, standards, and technical regulations and is formally entering the realm of national legislation,” writes the state-run science newspaper Keji Ribao.

Switching from the Driver to the Machine

Like that of every other country, China’s traffic laws are entirely tailored to human drivers. Now, a gradual transition is underway that takes both humans and machines into account. For automakers, this isn’t all bad news. The newly established clarity is just as important for investors as it is for engineers. The report quoted Li Wenlong, a legal expert at Zhejiang University, as saying that unclear liability boundaries had previously held some companies back from making long-term investments in research and products. With the new law, the costs of operation, accident liability, and insurance will be easier to calculate. “In a broader sense, the inclusion of autonomous driving in the law also sends a clear signal to the market,” Li said.

“Once the amended law is enacted, dozens of new autonomous vehicle models can be put on the roads,” explains independent analyst Gao Shen from Shanghai in an interview with the Hong Kong newspaper South China Morning Post. Experts in China argue that, since manufacturers are responsible for the vehicles’ operation on the road, this also grants them the right to sell them completely legally.

From the perspective of the government in Beijing, it was high time to improve the legal framework, as the adoption rate of driver-assistance systems has grown rapidly. For Level 2 driver-assistance systems, the adoption rate is already 70.5 percent, according to the science newspaper Keji Ribao. For NOA (Navigation on Autopilot) functions, the rate is 34.2 percent.

For all these vehicles, the amendment does not change anything for the time being, because autonomous driving in China, by definition, does not begin until Level 3, when the driver no longer has to keep their hands on the steering wheel at all times. However, Level 3 is about to be introduced.

BYD as a Pioneer

BYD had already taken the initiative on the issue of liability. In May of this year, the automaker announced that it would cover all costs resulting from traffic accidents if its “God’s Eye” driver-assistance system was activated. The BYD founder stated in May that the company aimed to achieve zero traffic accidents with its technology while also building affordable cars for the mass market.

BYD has thus already promised more than even the new law will require. “God’s Eye” is still a driver-assistance system under which drivers remain liable for accidents. The automaker is covering the costs because intelligent driving has become one of the most important selling points in China.

Car manufacturers are clearly looking to autonomous driving as their next source of profit, according to Caixin. Huawei, for example, is preparing to begin mass production of vehicles with Level 3 autonomous driving capabilities next year.

The Manufacturer Must Prove that the System Was Not to Blame for the Accident

In the future, the burden of proof following accidents will fall on manufacturers. If an automaker claims that its system was not to blame for an accident, it must prove it. False or exaggerated advertising claims about autonomous driving features will also be banned, according to China Daily. However, the full draft of the new law has not yet been published anywhere.

However, it is precisely this burden of proof that is likely to prompt manufacturers to comprehensively record sensor data, on-board computer decisions, the condition of the vehicles, and driver actions in the future, according to the Chinese science journal.

Market insiders in China argue that driving safety is thus evolving from a feature to a systematic requirement throughout the entire life cycle of cars, from mass production to daily use.

"Competition will continue to shift toward manufacturers' comprehensive security and compliance capabilities," said Lü Bin, vice president at the Beijing-based manufacturer Mogox, in an interview with a Chinese newspaper.

In addition to automakers, importers are also being held accountable. Anyone who wants to import self-driving cars into China is just as liable as domestic manufacturers. At the same time, this grants them access to the world’s largest auto market. 

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