by ZHOU Shuqi

Chinese driver-assist firms set a record at the biennial Munich auto show, sending 116 automakers and suppliers - about 40% more than in 2023 - the largest overseas showing. The surge underscores their global ambitions as margins shrink at home, but also the regulatory hurdles and cautious drivers in Europe.

EV maker Xpeng Motors opened a European R&D hub in Munich, began local road tests and sold 18,700 cars overseas in the first seven months of 2025. It targets 'drive-anywhere' capability by late 2026. Startups also stepped up: DeepRoute.ai, backed by Alibaba, unveiled a new AI platform; QCraft announced a German base and Zhuoyu Technology ran public road demos.

The push is driven by faster algorithm updates and a price war in China. New AI-driven models cut reliance on high-definition maps, making it easier to adapt to foreign roads.

The expansion faces three major challenges: regulation, data rules and driving habits. Europe poses the toughest regulatory test, centered on two core rules - the EU's General Safety Regulation, which mandates lane-keeping and fatigue alerts, and UN-backed Driver Control Assistance Systems, which set details such as lane-change acceleration. Xpeng executives said compliance is achievable but requires constant tweaks.

Data rules add more hurdles. The EU requires traceability, consent and local storage, with some member states also mandating in-market data centers. ZhiDi Technology founder ZHOU Qiang, who runs a testing company in Germany, said companies used to "fixing compliance later" in China risk long delays if they fail to plan ahead.

Even with approvals, systems need local training data. Engineers must adapt to narrower roads, different signals and complex networks in Europe. In Germany, algorithms also need to react fast enough for high-speed autobahns.

Whether Europeans want higher-level driver-assist functions, however, will determine the market size and returns for Chinese companies. WU Jingyi of Continental-Horizon, a Horizon Robotics-Continental venture, said most Europeans have little exposure to advanced systems, though Mercedes, BMW and Audi are adding them to counter Tesla. Wu said global automakers put safety and reliability ahead of cost, limiting the appeal of price competition.

Some Chinese driver-assist firms are turning to Tier-1 suppliers, seen as an easier path than breaking into multinational supply chains. Horizon Robotics, often called China's Mobileye, is working with Bosch, Denso, Continental and Volkswagen's Cariad under strategic agreements. Its Journey 6B chips have secured overseas orders, with deliveries set for June 2026, while Continental-Horizon's front-view unit and domain controller solutions, based on the same chip, are due in March next year.

"The window is narrowing," said DeepRoute's LIU Xuan. With Tesla and Europe's giants also pushing ahead, the race for Europe's driver-assist market is intensifying.