China's L2 Autonomous Driving Standards Cement LiDAR as Safety Imperative, Fueling Market Expansion

China's regulatory landscape for Level 2 (L2) autonomous driving is undergoing a seismic shift, with LiDAR technology emerging as a non-negotiable safety layer in the country's push for standardized intelligent driving systems. The Ministry of Industry and Information Technology (MIIT) has moved swiftly to codify LiDAR's role in its newly introduced mandatory safety standards, marking a pivotal moment for both the automotive sector and LiDAR manufacturers. According to a report by Third-News, the MIIT's draft standard, titled “Safety Requirements for Combined Driving Assistance Systems of Intelligent and Connected Vehicles,” mandates LiDAR integration for detecting static and dynamic obstacles in challenging scenarios such as tunnels and highway cut-ins China Enhances Mandatory Safety Standards for Intelligent Driving^[1]. This regulatory shift underscores LiDAR's reliability in conditions where traditional sensors like cameras and radar falter, particularly in low-visibility environments China Enhances Mandatory Safety Standards for Intelligent Driving^[1].

The technical rigor of these standards is equally transformative. The MIIT's framework requires comprehensive performance evaluations for LiDAR systems, including tests for ranging accuracy, angular resolution, and environmental durability. Notably, the first national standard for automotive LiDAR performance—GB/T 45500-2025—came into effect in May 2025, developed by Hesai Group in collaboration with over 50 industry partners GB/T 45500-2025 China Lidar Standard Developed^[2]. This standard establishes unified methodologies for anti-interference testing and long-term reliability, ensuring consistency across manufacturers. Such measures are critical as China aims to address driver complacency and misuse of terms like “zero takeover,” which have contributed to accidents in the past China Accelerates Progress on L2 Mandatory Standards^[3].

The regulatory tailwinds are translating into explosive market growth for LiDAR. Data from MarketResearchFuture indicates that the China LiDAR market size will surge from $126 million in 2024 to $987 million by 2035, with a compound annual growth rate (CAGR) of 20.58% China LiDAR Market Size, Share | Growth 2035^[4]. A separate report by Verified Market Reports projects an even steeper trajectory, forecasting the automotive LiDAR market alone to grow from $560 million in 2025 to $2.1 billion by 2033 at a 22% CAGR China Automotive LiDAR Market Size And Outlook 2033^[5]. This acceleration is driven by the rapid adoption of L2+ ADAS in new energy vehicles, with 52% of 2024 sales featuring LiDAR-enabled systems China's L2+ ADAS Market Surges as Full-Stack Solutions Dominate^[6].

Chinese LiDAR suppliers are capitalizing on this momentum, with Hesai, RoboSense, and Huawei dominating the market. Hesai, which holds a 33% market share, has leveraged cost reductions through digital LiDAR and chipification to secure partnerships with automakers like NIO and BYD Chinese firms maintain automotive lidar market domination^[7]. RoboSense, despite ongoing financial losses, has prioritized R&D to enhance its EMX digital LiDAR's performance, aligning with the MIIT's stringent detection requirements China Accelerates Progress on L2 Mandatory Standards^[8]. Meanwhile, Huawei's full-stack ADS platform is reshaping the industry by integrating LiDAR into mass-market vehicles priced as low as $25,000, accelerating the “democratization” of intelligent driving China and Global Automotive LiDAR Industry Report 2025^[9].

The geopolitical implications of China's LiDAR dominance are profound. As stated by Edge AI & Vision, Chinese firms now control over 99% of the automotive LiDAR market share, outpacing Western competitors like Luminar and Innoviz through aggressive pricing and government-backed innovation China Takes the Lead in Automotive LiDAR^[10]. This leadership is further solidified by expanding applications beyond automotive—Hesai and RoboSense are now targeting robotics and industrial automation, diversifying revenue streams and scaling production China and Global Automotive LiDAR Industry Report 2025^[11].

For investors, the confluence of regulatory clarity, technological leadership, and market expansion presents a compelling opportunity. The MIIT's standards are not merely technical benchmarks but catalysts for a broader ecosystem where LiDAR becomes a foundational safety layer. As China's L2 ADAS market matures, companies that balance innovation with cost efficiency—such as Hesai and RoboSense—will likely outperform peers. However, risks remain, including potential over-reliance on domestic demand and the need for continued R&D to meet evolving standards.