By Ryan Woo

BEIJING (Reuters) – China will back firms in the smart vehicle supply chain to form groups dedicated to spreading innovation, state media said on Monday, as it races to hammer out standards for assisted and autonomous driving functions by 2025.

The world’s largest auto market, which set the target for such standards in July, has made so-called intelligent connected vehicles (ICVs) a long-term strategic focus in a drive to become the leading global player in the still nascent industry.

China will support firms in forming “innovation consortia”, that enable them to learn from each other’s strengths in order to achieve technological breakthroughs, the official Xinhua news agency said.

Citing Xin Guobin, vice minister of industry and information technology, the agency added that China aims to speed its formulation and revision of key standards.

While level 1 is the least intelligent or automated of China’s five categories of autonomous driving, official data shows that in the first half of 2023, just over 42% of the country’s new passenger vehicles had already attained Level 2.

Vehicles in this category can handle driving functions, but the driver must always be prepared to take over when road conditions change.

As China pushes ahead with Level 3 automation, in which a vehicle can drive by itself under certain conditions, Baidu’s Apollo Go is taking the lead.

The firm won a licence in June to run its driverless ride-hailing service commercially in parts of the city of Shenzhen.

That makes the tech hub China’s fourth city to offer such a service, following the central city of Wuhan, southwestern Chongqing and the capital, Beijing.

China aims to master the core technologies of advanced autonomous driving and eventually put driverless vehicles on its roads in the effort to become the leading industry player worldwide.

But the likes of Baidu and other Chinese developers face geopolitical headwinds as the United States puts export curbs on technology, in addition to stiff competition from Western counterparts, such as Tesla, in improving technology.