Insight: China, the Remaining Major Market for Level 3

China is the only major market testing L3 driving as a policy tool, while global OEMs abandon L3 and focus on L2+ vehicles and L4 robotaxis.

China has emerged as the only major market actively testing Level 3 (L3) automated driving, as Chinese OEMs such as BAIC (Arcfox) and Chang’an conduct tightly regulated public‑road trials under low‑speed, single‑lane conditions. These tests are not commercial launches, but policy‑enabled validation exercises designed to support future Level 4 (L4) development. In contrast, global OEMs, including BMW and Stellantis, are discontinuing or freezing L3 programs, citing high costs, liability exposure, and limited consumer demand. Instead, they are focusing on advanced Level 2/L2+ for consumer vehicles and accelerating investments in L4 robotaxis through partnerships. As a result, L3 is increasingly viewed outside China as a commercial “liability trap,” while within China it serves as a transitional regulatory tool rather than a scalable consumer proposition.