Volkswagen begins Level 3 autonomous road trials in Hefei, targeting 2027 readiness

Permit announced, testing under way

Volkswagen Group China announced on Monday 26 October 2026 that it has obtained a road test permit for Level 3 autonomous driving on public roads in Hefei, capital of Anhui Province, and has begun real-world on-road testing and large-scale data collection. Xinhua reported the announcement from Hefei, quoting Ralf Brandstätter, chairman and CEO of Volkswagen Group China: "At Volkswagen, safety and reliability come first in autonomous driving. With this permit, we can test in real traffic in Hefei and collect data at scale. It is the next step on our road to Level 3 readiness." ²⁴

Automotive World, drawing on Volkswagen Group China, reported that the permit was issued under what the company describes as the strictest Level 3 rules yet, including the latest safety design mandates, and that trials are already under way. CnEVPost noted the company did not disclose the models covered by the permit, the test routes or the size of the test fleet. ¹³

This is a China-market regulatory and development milestone. No Australian application or availability of this Level 3 system has been announced in the cited reporting. ¹³

The technology behind the trials

The testing programme builds on work Volkswagen has been developing in China through Carizon, a joint venture established in December 2023 between Volkswagen's software subsidiary CARIAD and Chinese technology company Horizon Robotics, headquartered in Beijing. Volkswagen invested about 2.4 billion euros in the venture and holds a 60 per cent stake, according to CnEVPost. Carizon developed Hyper Sense 8, which Volkswagen describes as its first full-scenario advanced driver assistance system (an L2++ system in Automotive World's framing). ²³¹

The group is also developing its own L4-ready system-on-chip, known as C7H, designed to support capabilities up to Level 4 autonomous driving, Xinhua reported. Carizon will use Horizon Robotics' AI foundation model to develop a unified AI driving solution for Volkswagen Group in China, working with the C7H chip and the GAIA world model data platform to support L3 and L4 deployment, per CnEVPost. ²³

On the simulation side, Automotive World reported that Gaia 2.0, the group's own AI world model, runs daily driver assistance safety simulations equivalent to five million kilometres of driving using up to 30 million scenario clips, and that for Level 3 the aim is 10 million kilometres of training data a day so edge cases are covered before customers encounter them. ArenaEV, using imperial conversions, described the same figure as roughly 3.11 million miles daily, with an eye toward doubling it to 6.2 million miles. ¹⁵

On 22 July 2026, Volkswagen and Horizon Robotics announced plans to deepen their collaboration on AI foundation models through Carizon, with deliveries of vehicles equipped with Volkswagen's L3 capabilities set to begin as early as the second half of 2027, CnEVPost reported. Earlier, on 11 April 2026, Frank Han, executive vice-president of Volkswagen Group China and CEO of Cariad China, told a forum in Beijing that Volkswagen would achieve L3 conditional autonomous driving in 2027 and L4 in 2029. ³

Why Hefei

Hefei is the home of the Volkswagen Group China Technology Company, the group's largest research and development centre outside Germany, housing about 3,000 R&D professionals, Xinhua reported. Volkswagen Group has invested more than 3.5 billion euros in the city. ArenaEV noted Hefei is also the base of Volkswagen Anhui, the group's electric-focused manufacturing operation there. ²⁵

The city is a key hub in China's new energy vehicle industry: Xinhua reported that in 2025 Hefei produced more than 1.37 million NEVs, the most among all Chinese cities, and is home to major carmakers including JAC, BYD and NIO, with a supply chain spanning power batteries, automotive electronics and intelligent driving. ²

Volkswagen China will hold its first Technology Day in Hefei on Wednesday, 28 October 2026, to showcase its latest technological advances, according to CnEVPost. ³

Regulatory context and what Level 3 means

Level 3, or conditional driving automation, allows vehicles to perform dynamic automated driving tasks while a human driver remains available to take control when requested, as Xinhua explains. ArenaEV framed the legal distinction more sharply: under a Level 2 system the driver carries full legal responsibility, while with an active Level 3 system the manufacturer assumes liability for what the car does — a shift the publication cites as a reason few automakers have put certified Level 3 cars on sale. ²⁵

China has been gradually opening commercial L3 applications under a regulatory framework. In December 2025, the Ministry of Industry and Information Technology granted its first conditional L3 product approvals for regular passenger vehicles — the Deepal SL03 from Changan Automobile and the Arcfox Alpha S from BAIC Group, allowing trials on select roads in Chongqing and Beijing respectively, per Xinhua and CnEVPost. ArenaEV added that a Changan model was restricted to 31 mph on designated Chongqing motorways, while the BAIC Arcfox saloon was certified to run at up to 50 mph across three specific Beijing expressways. ²³⁵

CnEVPost distinguishes a road test permit from product approval: the former allows automakers to test conditional autonomous driving on designated road sections, while the latter allows approved vehicles to participate in road-use pilots on designated sections. An MIIT official said on 22 October 2026 that work on a second batch of L3 product approval pilots was under way, without identifying the automakers or models involved, per CnEVPost. ³

In July 2026, China issued a mandatory national safety standard for M- and N-category vehicles equipped with Level 3 and Level 4 systems, scheduled to take effect on 1 July 2027. Xinhua reported the standard calls for stronger capabilities in performing dynamic driving tasks and specifies requirements for human-machine interaction and user notification to prevent misuse and abuse. ²

Competitive and strategic backdrop

ArenaEV reported that the competition in China is not waiting: GAC's premium Hyptec brand and XPeng have accumulated miles of testing under their own regional permits. The publication also noted a split in the industry over whether Level 3 is worth the effort, with some executives — most notably Elon Musk at Tesla and several autonomous driving leads at Chinese startups — arguing the handover period is dangerous and the industry should leap straight to Level 4 robotaxis. That argument is ArenaEV's characterisation of those views, not a Volkswagen position. ⁵

ArenaEV analysed Volkswagen's approach as accepting the legal liability of Level 3 because it believes private car buyers still want personal ownership rather than a taxi subscription. The same publication framed the Horizon Robotics partnership and Volkswagen's 5 per cent stake in XPeng to jointly build the China Electrical Architecture (CEA) as a retreat from its earlier plan to write a universal software stack for every group brand — an ambition it links to past software delays and delayed vehicle launches. This is ArenaEV's editorial interpretation rather than a company statement. ⁵

What remains unconfirmed: the specific models and routes in the Hefei test programme, the size of the test fleet, and whether — or when — any Level 3 capability could be offered outside China. Volkswagen's stated 2027 readiness goal and the previously flagged second-half 2027 delivery window are company targets, not confirmed launch dates. ³⁵