What's New

Two Ministries Issue Document: New Energy Vehicles Enter Era of Full-Cycle Stringent Oversight

Recently, the State Administration for Market Regulation and the Ministry of Industry and Information Technology jointly drafted the “Notice on Strengthening Recall Management, Production Consistency Supervision, and Standardized Promotion of Intelligent Connected New Energy Vehicle Products (Draft for Comment)” (hereinafter referred to as the “Notice”), which has been released for public consultation. In fact, as early as April this year, the Ministry of Industry and Information Technology issued an announcement requiring automakers to strictly fulfill their primary responsibilities for production consistency and quality safety in areas such as assisted driving testing, verification, and publicity. The progression from the announcement to the drafting of the Notice signifies a shift in assisted driving regulation from “post-event accountability” to “pre-emptive prevention + full-cycle management.” This move fills institutional gaps in defect management, production consistency, and publicity standards for intelligent connected new energy vehicles, advancing the standardized operation of the assisted driving industry.

01. Issues such as exaggerated claims and inconsistencies are prominent, making rectification urgent.

Currently, the intelligent connected new energy vehicle industry faces prominent issues regarding the promotion and production consistency of driver assistance features. Some automakers excessively hype these capabilities, labeling Level 2 technology with misleading terms like “autonomous driving” or “driverless.” Certain manufacturers even claim their systems enable “hands-free operation,” inducing consumers to overestimate the system's capabilities and leading to misuse of driver assistance functions. McKinsey's 2024 China Automotive Consumer Insights report reveals that 62% of consumers mistakenly perceive Level 2 driver assistance as “fully autonomous driving.”

Multiple accident cases have also exposed defects in the driver assistance technology of certain products. For instance, during rainy or foggy weather, the error rate of millimeter-wave radar surges dramatically—there have been instances where vehicles misidentified stationary road signs as moving vehicles. Pure visual recognition technology often suffers from overexposure or failure in strong light, backlighting, or nighttime scenarios, leading to numerous related accidents. More concerning is that some automakers lack real-time data monitoring for vehicle malfunctions caused by these flaws, or even conceal accident reports, effectively treating consumers as guinea pigs. Mr. Chen from Taizhou, Zhejiang, reported to Car Quality Network that his new vehicle experienced multiple instances of sudden braking without cause within 90 days of purchase, one of which caused a rear-end collision when the following vehicle couldn't react in time. Mr. Zhang from Nanjing, Jiangsu, reported that his vehicle, while using assisted driving on an elevated highway, ignored road construction barriers in the fast lane, and the AEB failed to intervene, resulting in a collision. Regarding accidents caused by assisted driving systems, liability determination remains fraught with uncertainties, triggering a crisis of consumer trust.

Furthermore, OTA abuse is also widespread. Some automakers engage in “patch-style development,” frequently pushing out software versions that haven't undergone thorough testing. Certain manufacturers even use OTA to arbitrarily modify critical parameters like driving range and power output, or fix vehicle defects that should have been recalled without informing users, leading to collective consumer complaints. According to data from the Vehicle Quality Network, complaints about “system upgrade issues” for new energy vehicles reached 1,880 cases from January to July 2025, ranking third among all service-related problems. Some owners reported to the Vehicle Quality Network that their vehicles experienced reduced power and increased energy consumption after infotainment system upgrades. Others complained that their vehicles failed to receive promised OTA updates, rendering driver assistance features inoperable.

02. Comprehensive Policy Tightening: In-Depth Analysis of the Notice's Provisions

The Notice released this time primarily covers four key areas: - Strengthening defect investigation and recall management for intelligent connected new energy vehicles - Enhancing supervision of production consistency for intelligent connected new energy vehicles - Intensifying oversight of automakers' advertising activities and commercial promotional practices - Reinforcing incident reporting and in-depth investigation for intelligent connected new energy vehicles

Regarding enhanced defect investigation and recall management, automakers must comply with the Notice's requirements by monitoring vehicle operational data in real time through channels such as vehicle apps and in-vehicle information exchange systems. Key focus areas include anomalies in combined driver assistance systems, cyberattack risks, and failures in critical electronic control systems. Real-time alerts must be issued for potential risks like cyberattacks and software vulnerabilities, with major safety incidents reported promptly.

Meanwhile, the State Administration for Market Regulation collaborates with recall technical agencies to conduct technical analyses of collected defect clues, categorizing defects into Level 1 defects requiring immediate recall and Level 2 defects requiring rectification within a specified timeframe. Automakers must fully report defect information in the motor vehicle certificate system and are prohibited from conducting OTA upgrade activities without prior filing. The State Administration for Market Regulation conducts targeted spot checks on manufacturers frequently performing OTA upgrades to ensure corrective actions align with filed plans. Manufacturers utilize the “sandbox regulation” mechanism for continuous monitoring of recall effectiveness, establishing a self-assessment and incident reporting system for intelligent connected new energy vehicle safety. This forms a closed-loop management system encompassing “defect discovery – recall rectification – quality enhancement.”

Regarding the reinforcement of automakers' primary responsibilities, manufacturers must fully and accurately report key information in the motor vehicle certificate system, including the configuration of combined driver assistance systems, autonomous driving levels, and parameters for individual energy storage devices and assemblies. This ensures that production vehicles fully align with the technical parameters declared for market approval. Automakers are required to develop “safety-first” driver monitoring systems that detect hands-off or distracted driving in real time. These systems must prompt drivers to regain control through voice alerts, steering wheel vibrations, or speed limitations, and prohibit users from manually disabling monitoring functions.

Regarding explicit advertising restrictions, automakers are strictly prohibited from using terms such as “autonomous driving,” “self-driving,” or “advanced intelligent driving” in the naming or promotion of driver assistance systems. They must not imply capabilities the system does not actually possess, thereby preventing consumer misuse of features. Automakers must strictly adhere to the “Automotive Driving Automation Classification” (GB/T 40429-2021) for functional naming to ensure scientific and rigorous descriptions. The State Administration for Market Regulation will collaborate with technical institutions to conduct specialized assessments of “exaggerated claims.” Automakers must prominently display safety warnings and usage instructions for combined driving assistance systems in vehicle apps, in-vehicle infotainment systems, and user manuals. This includes specifying applicable scenarios, system response delays, and other critical details to ensure consumers accurately understand functional limitations and usage conditions.

Regarding the upgrade of the accident reporting mechanism, automakers must report safety incidents and collision accidents occurring during the use of combined driver assistance systems within 48 hours (within 24 hours for incidents resulting in casualties or significant societal impact). The report must include basic accident information, vehicle status, system operational data, environmental conditions, and other relevant details.

The State Administration for Market Regulation and the Ministry of Industry and Information Technology will collaborate with public security traffic management departments to establish specialized technical institutions. These institutions will conduct in-depth investigations into fatal accidents or incidents with severe social repercussions, focusing on analyzing technical issues such as system defects, algorithm errors, and human-machine interaction failures. Automakers found to have concealed or omitted major facts will undergo targeted verification. Automakers found to have concealed or falsified data may face the revocation of product market access qualifications and inclusion in a joint disciplinary list for dishonest conduct.

03. Forcing Automakers to Restructure R&D Processes to Drive Industry Transformation and Upgrading

With the implementation of new regulations and intensified oversight, it is foreseeable that China's intelligent connected new energy vehicle industry will undergo a series of transformations and upgrades. This includes shifting from “function-first” to “safety-first,” transitioning from “individual efforts” to “ecosystem collaboration,” and evolving from “following development” to “innovation-led.”

For automakers, the development path of advanced driver assistance systems must shift from pursuing “flashy features” to prioritizing “safety and reliability.” This requires establishing triple safety redundancy—from sensors to decision-making to execution—and building a comprehensive safety management system covering the entire lifecycle from R&D and production to operation. It also necessitates integrating a collaborative protection network encompassing vehicles, roads, and cloud infrastructure. For instance, the NIO ET7 features three independent braking systems, while Mercedes-Benz's DRIVE PILOT Level 3 system employs dual-redundant designs for steering, braking, and power supply to prevent loss of control from single-point failures.

In terms of marketing communications, with the explicit prohibition of borderline promotional claims like “autonomous driving” and “intelligent driving,” automakers must adjust their communication strategies. They should adhere to a messaging approach centered on safety commitments, transparent communication, and ongoing education to build consumer trust barriers in this era of stringent regulation.

Regarding R&D investment, the new regulations mandate that automakers develop more stringent driver monitoring systems. Some manufacturers must also upgrade their simulation testing capabilities and assessment for low-visibility nighttime scenarios, which will inevitably increase R&D costs. Additionally, new requirements such as testing and validation of combined driver assistance systems and establishing user training programs will further raise per-vehicle compliance costs. For automakers currently operating with low gross margins, this will significantly amplify pressure.

For users, on one hand, the implementation of the new regulations may temporarily degrade the user experience of advanced driver assistance features. For instance, systems may issue more frequent takeover prompts, and advanced functions like NOA may be temporarily suspended in certain cities. Additionally, due to extended testing periods and regulatory filing processes, automakers may reduce the frequency of OTA updates, potentially delaying user access to new features. On the positive side, however, the new regulations will accelerate consumers' rational understanding of driver assistance capabilities, fostering a shift in purchasing perspectives.

At the industry level, the implementation of new regulations will reshape the development trajectory of driver assistance technologies, with automakers increasingly focusing on optimizing the safety performance of perception systems. As lidar costs decline, the triple-redundancy architecture combining “lidar + 4D millimeter-wave radar + vision” is poised to become the mainstream trend. Some automakers may revert to “image-based NOA.” Simultaneously, the new regulations will accelerate industry consolidation. Increased R&D compliance costs will force automakers with weak technological reserves to exit the market. Those overly reliant on exaggerated marketing claims will see their credibility damaged, losing consumer trust and facing elimination risks. Automakers possessing advanced driver assistance technologies and algorithmic advantages will emerge as leaders.

04.Balancing Safety and Innovation Efficiency: New Regulations Face Multiple Challenges

The new regulations do play a positive role in enhancing the safety of assisted driving systems. However, considering factors such as the current maturity of related technologies and the cultivation of user habits, their full implementation still faces significant challenges.

First, driver monitoring systems require continuous collection of biometric data such as facial expressions and eye movements. Users may express concerns about privacy infringement. This is particularly true when automakers fail to clearly disclose whether data is uploaded to the cloud or shared with third parties, which can easily trigger trust issues. Additionally, existing technology struggles with recognition accuracy in scenarios like wearing sunglasses or exposure to strong light. Frequent false alarms could instead distract drivers.

Second, software update cycles for smart connected new energy vehicles far exceed those of traditional cars. Introducing a filing mechanism may prolong review periods, delaying the release of relevant features and negatively impacting user experience.

　　Third, while defects in traditional vehicles primarily stem from hardware, smart connected new energy vehicles involve both hardware and software issues. This requires specialized teams to analyze code and data structures, demanding higher technical expertise and laboratory equipment. Industry projections indicate China will face a talent shortage of 1.03 million professionals in the smart connected new energy vehicle sector by 2025, with regulatory-related positions accounting for over 15% of this gap.

　　Finally, intelligent connected new energy vehicles involve multiple departments including industry and information technology, transportation, and public security, currently facing overlapping responsibilities and conflicting standards. For instance, obtaining autonomous driving test permits requires triple approvals: product access from the Ministry of Industry and Information Technology, road use permits from the Ministry of Public Security, and operational management approvals from the Ministry of Transport. Automakers often encounter redundant testing and lengthy procedures. Additionally, while traditional vehicle regulation focuses primarily on hardware inspections, intelligent connected new energy vehicles require real-time monitoring of new elements such as software algorithms and data flows. Local regulatory authorities generally lack vehicle-cloud collaborative supervision platforms, hindering cross-departmental data analysis and coordination.

To address the aforementioned issues and facilitate the smooth implementation of the new regulations, it is recommended that regulatory authorities establish unified technical standards for driver monitoring systems, enforce strict approval processes, and eliminate avenues for automakers to achieve superficial compliance through “feature castration.” Regarding OTA filing management, a risk-based classification and tiered management approach could be introduced. For instance, low-risk upgrades like navigation map optimization would require only filing, while updates involving critical systems such as braking and steering would be managed under recall procedures. For urgent OTA upgrades addressing safety defects, manufacturers could implement first and file later, provided they simultaneously submit risk assessment reports. Concurrently, efforts to cultivate regulatory talent should be intensified. A national-level regulatory committee for intelligent connected new energy vehicles should be established, integrating functions from departments including industry and information technology, transportation, and cyberspace affairs. This committee would develop a unified technical review checklist to enhance cross-departmental coordination efficiency.

A series of new regulations concerning new energy vehicles is profoundly reshaping the automotive industry ecosystem, with impacts extending from technological R&D to consumer perception. Regulatory authorities will advance the safe and orderly development of the intelligent connected vehicle industry through multidimensional, full-chain oversight mechanisms. For automakers operating in core regions, swiftly transforming policy pressures into momentum—by building technological advantages and optimizing marketing systems—will be crucial to securing a favorable position in the upcoming industry reshuffle.