Report: China has issued two automakers licenses to test autonomous vehicles in Shanghai region, the first time it has awarded such a licence
HONG KONG (Reuters) - China issued licenses to auto makers on Thursday that allow self-driving vehicles to be road tested for the first time, the state-owned Xinhua news agency reported.
Context & Ripple Effects
This is the opening move of China's autonomous-vehicle regulatory arc: before Thursday, no automaker held a license to road-test self-driving cars anywhere in the country, so Shanghai becomes the first jurisdiction to create a legal lane for it. The timing matters because the private-sector race was already running ahead of the state — Alibaba had just confirmed its own self-driving tests, joining Baidu and Tencent, while Didi took the opposite route with a California permit.
Seen from 2025, the two Shanghai licenses look like the template everything else followed: city-by-city test permits scaled into a national regime where more than 16 cities now host driverless testing — more than any other country — then into consumer-facing approvals like Changan Auto's and BAIC Motor's Level 3 sign-offs, and finally into offshore expansion such as Baidu's Apollo Go permit in Hong Kong.
First-order effects
- The two licensed automakers gain immediate legal cover to run autonomous road tests in the Shanghai region, converting what was previously an unregulated gray zone into sanctioned testing.
- Baidu, Tencent, and Alibaba — all already confirmed in China's autonomous car race — now have a clear precedent to apply for the same class of license rather than testing informally.
Second-order effects
- Other Chinese cities must decide whether to match Shanghai's licensing offer or lose AV testing activity to it, turning municipal permits into a competitive bidding tool for talent and data.
- Chinese companies pursue parallel foreign licenses — Didi's California permit and WeRide's UAE national license show the same firms hedging between domestic city permits and overseas regimes.
Third-order effects
- If the pattern holds, China's permit system matures from road-testing into graded commercial approvals — the 2025 Level 3 approvals for Changan and BAIC are that endpoint — making the regulator, not the automaker, the pacing item for deployment.
- A licensing-first structure also gives Beijing a lever US regulators lack: approval can be granted or withheld per city and per capability level, shaping which companies and which autonomy tiers reach the market first.
The trend: China's autonomous-vehicle governance has evolved from a single city issuing first-ever test licenses in 2018 into a tiered national permitting system that now governs commercial deployment and overseas expansion.