China bans 'smart driving' ads after fatal crash involving Xiaomi EV

Chinese authorities have banned terms like 'autonomous driving' in car ads after a fatal crash involving Xiaomi's SU7 EV, tightening rules on ADAS marketing and over-the-air updates to boost safety

Chinese authorities have directed carmakers to stop using the terms "smart driving" and "autonomous driving" in advertisements for driver assistance systems. This directive, part of broader efforts to regulate advanced vehicle technologies, was issued by the Chinese Ministry of Industry and Information Technology (MIIT) during a meeting with around 60 automotive representatives, according to a meeting transcript reviewed by Reuters.

 

The move follows a fatal crash involving Xiaomi's SU7 electric sedan in March, which reignited public debate about the safety of intelligent driving systems. Initial investigations indicated that the vehicle struck a cement pole at 97 kmph (60 mph) shortly after the driver disengaged the advanced driver assistance system (ADAS), leading to a fire.

Clarifying OTA update rules

In a brief statement, the MIIT confirmed the meeting on April 16 had taken place and said it aimed to clarify new rules introduced in February. These rules govern over-the-air (OTA) software updates related to driving functions in intelligent and connected vehicles. 

 

Under the revised regulations, automakers must now conduct thorough testing and secure regulatory approval before deploying software updates that enhance driving functions in vehicles already on the road. This represents a shift from the previous practice of refining ADAS features remotely without prior clearance.

 

The crackdown comes as manufacturers aggressively promote models with enhanced ADAS to gain an edge in an intensifying price war, now in its third year. In February, BYD launched over 20 low-cost models — some priced under $10,000 — that include complimentary ADAS features. Other automakers such as Leapmotor and Toyota have also released competitively priced vehicles offering similar capabilities.

Warnings of legal consequences

China’s Ministry of Public Security’s traffic safety research centre on Monday (April 14) warned that companies exaggerating or falsely advertising assisted driving features could face serious penalties under the country’s advertising law. These could range from fines — five to ten times the advertising cost — to revocation of business licences. In extreme cases, such as when misleading advertisements result in deadly traffic incidents, criminal charges may apply, with potential prison terms of up to two years.

 

As electric vehicle (EV) sales surge, surpassing half of all car sales by late last year, regulators have intensified scrutiny of the sector. The rapid pace of growth has prompted authorities to tighten safety and performance standards, including those related to EV batteries, to mitigate risks such as fires or explosions.

 

While some analysts warn that stricter regulations may raise development costs and slow innovation, others believe it could trigger much-needed consolidation in an industry currently facing overcapacity.