Volkswagen's 2027 L3 goal now rests on Carizon, its 60%-owned venture with Horizon Robotics, turning Hefei test data into a system that wins MIIT product approval.
Volkswagen Group China has received a permit to test Level 3 (L3) self-driving cars on public roads in Hefei, the capital of Anhui province, and has already started real-road testing and data collection there. The company announced the permit on Weibo on October 26 and said it moves the group toward its goal of L3 technology readiness in 2027, CnEVPost reported. Volkswagen will hold its first China technology day in Hefei on October 28.
The same day, Xpeng (9868.HK) said its robotaxi service, Xpeng Yoyo, had qualified for Level 4 (L4) demonstration operations across all of Guangzhou, according to Cover News. Volkswagen bought a stake of about 5% in Xpeng in 2023, Electrek noted, so the two approvals land on companies that already share engineering work. The same day, Reuters reported, citing Manager Magazin, that Volkswagen is considering using the China Electronic Architecture it developed with Xpeng for its mass-market cars in Europe; Volkswagen declined to comment.
The two levels describe different jobs. An L3 car drives itself under set conditions, such as on approved expressways, but a person must be in the driver’s seat and take over when the system asks. An L4 vehicle needs no human driver at all inside a defined area. Electrek pointed out that L3 is where legal responsibility moves to the carmaker while the system is switched on, which helps explain why few companies have brought it to market.
Volkswagen’s permit covers testing, and the details stay private
The permit lets Volkswagen run tests and gather driving data; it does not let the company sell L3 cars. Volkswagen did not say which authority issued it, which models are involved, how many cars are in the fleet or which roads they may use, Electrek, CnEVPost and the state-run Global Times reported. ChinaEVHome said test cars are running on city roads and expressways, including complex intersections, roadwork zones and night driving.
"We will never push technological progress at the expense of safety," Ralf Brandstätter, chairman and chief executive of Volkswagen Group China, wrote, according to The Next Web. "The L3 test qualification lets us test in real traffic in Hefei and collect data at scale."
Volkswagen’s research and development center in Hefei has more than 3,000 engineers, Chinese tech outlet Mydrivers reported. The group has invested more than 3.5 billion euros in the city, according to EV. Han Sanchu, an executive vice president of Volkswagen Group China and chief executive of its software unit CARIAD China, has said the group aims for L3 in 2027 and L4 in 2029, EV reported.
Carizon carries the software, and rivals already hold permits
Volkswagen’s driver assistance and self-driving software in China comes from Carizon. Volkswagen holds a 60% stake in Carizon, a joint venture with Horizon Robotics into which it invested about €2.4 billion. In July the partners said deliveries of L3 capability could begin as early as the second half of 2027, CnEVPost reported. Volkswagen is also developing a chip, the C7H, designed to support up to L4, according to Electrek.
Volkswagen is joining a crowded field. L3 road test permits have been issued in batches this year, and by September 2026 brands including Avatr, Xpeng, Geely, BYD, Xiaomi, Mercedes-Benz and BMW held local permits, Mydrivers reported. Selling L3 cars needs a separate product approval from the Ministry of Industry and Information Technology (MIIT). In December 2025 it gave the first ones to Changan’s Deepal SL03 and BAIC’s Arcfox Alpha S, and on October 22 an MIIT official said work on a second batch of L3 approval pilots was underway, CnEVPost reported. A mandatory national safety standard for L3 and L4 systems takes effect on July 1, 2027, EV reported.
Xpeng’s Guangzhou approval moves its robotaxi from testing to riders
Xpeng gave its robotaxi the Yoyo name and launched a booking mini program with limited test access on October 8, IT Home reported, a step that took the service beyond company staff. Under the new qualification it will keep using invitation codes at the start and widen its service area as operations allow, Cover News reported. The vehicle is based on Xpeng’s GX SUV and runs on four of Xpeng’s own Turing AI chips with 3,000 TOPS of computing power. Xpeng plans to act mainly as a technology supplier, selling partners a package of vehicle platform and self-driving software, and it is in talks with several European ride-hailing platforms, The Next Web reported. The company aims to carry passengers without safety drivers in 2027.
The approval follows a pause across the industry. China stopped issuing new robotaxi permits in April after several Baidu Apollo Go cars stalled on Wuhan roads on March 31, stranding passengers, CnEVPost reported in April, citing Bloomberg. Approvals began to resume in some cities in July after a safety review, with Momenta among the first to receive one, CnEVPost reported in July.
Volkswagen’s technology day on October 28 is the next chance to see what the Hefei program covers. Named test models, a fleet size or a timetable for applying to the MIIT’s second L3 batch would show whether the 2027 target refers to a car customers can buy.