China Auto Manufacturers: L2 Policy & Spillover effect on Horizon Robotics (USD9bn mkt cap again) &Xpeng

Research evidence excerpt

China Auto Manufacturers: L2 Policy & Spillover effect on Horizon Robotics (USD9bn mkt cap again) &Xpeng

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03 Jul 2026 06:14:05 ET │ 12 pages

China Auto Manufacturers

L2 Policy & Spillover effect on Horizon Robotics (USD9bn mkt cap again)

& Xpeng

CITI’S TAKE

On 2-Jul-2026, China’s Ministry of Industry and Information Technology

(MIIT) announced the country’s first mandatory national standard

targeting L2 ADAS – “Safety Requirements of Driver Assistance System”

(GB 47955-2026), which will come into force on 1-Jan-2027. Our Jeff ChungAC

takeaways: (1) This will help harmonize the industry’s L2 ADAS standards +852-2501-2787

and eliminate low ROI ADAS/FSD development by smaller-scale jeff.m.chung@citi.com

automakers and move it towards solution providers such as Horizon Kyle Wu

Robotics/Momenta. (2) We also expect L3 ADAS policy to be released later +852-2501-8483

in 2H26 with similar norms (i.e. policymakers focusing mostly on user- kyle.wu@citi.com

experience and safety-level output results rather than hardware/software

inputs such as chip computing power or capability of AI models). (3) If L2-

L3 solutions were to be consolidated within key providers, it would

enhance positive spillover and larger economy-of-scale effects at a later

stage among overlapping Humanoid Robots AI, ADAS, Robotaxi

algorithms, favoring players like Horizon Robotics and Xpeng in our view.

While the official standard hasn’t been released, the approval draft lays out the

following requirements for vehicles equipped with L2 ADAS:

(1) Hands-off Steering Wheel Detection: A warning is triggered if hands leave the

steering wheel for 5 seconds; alerts will escalate if the driver fails to retake control.

(2) Eyes-off Road Monitoring (Driver Monitoring System): If gaze deviation is