Shanghai Provides a Legal Framework for Driverless ICVs

Shanghai accelerated the pace of promoting the development of intelligent connected vehicles (“ICVs”) in 2022.

On November 23, 2022, the Standing Committee of the Shanghai People's Congress adopted the Provisions of Shanghai Pudong New Area on Promoting Innovative Application of Driverless Intelligent Connected Vehicles (the “Pudong Innovative Provisions”) which will come into force on February 1, 2023.

Prior to this the Shanghai Administrative Measures for Testing and Application of Intelligent Connected Vehicles (the “Shanghai Administrative Measures”), which came into force on February 15, 2022, provide that the Pudong New Area government may formulate administrative measures for the testing and application of fully self-driving ICVs.

In October 2022, Shanghai released the Shanghai Provisions on the Pilot Administration of High Definition Maps for ICVs (Draft) (the “Shanghai Provisions on HD Maps for ICVs (Draft)”).

In November 2022, Shanghai released the Shanghai Implementing Rules for Demonstrative Operation of ICVs (the “Shanghai Rules for Demonstrative Operation of ICVs”).

The slew of new rules shows Shanghai’s ambition to remain competitive in the development of ICVs.

The Pudong Innovative Provisions provide a regulatory basis to allow for driverless ICVs to become operational in Shanghai. The Pudong Innovative Provisions provide that driverless ICVs are ICVs without drivers or testing security personnel.

The Pudong Innovative Provisions lay value on encouraging innovation but also proceeding in a prudent manner. This applies to carrying out road tests, demonstrative applications, demonstrative operations, and commercial operations of driverless ICVs (both in low and high risk scenarios).

The main thrusts of the Pudong Innovative Provisions are as follows:

I. Security Self-declaration

The Pudong Innovative Provisions require that companies conducting road test, demonstrative application or demonstrative operation of driverless ICVs must apply in advance for a security self-declaration.

After confirmation, the company can then apply to the traffic administrative department of the public security organ for a temporary vehicle plate and a vehicle identification plate. This will allow the company to carry out road tests and demonstrative applications. Companies can apply for vehicle operation permits and carry out demonstrative operation with the temporary vehicle plates, security self-declaration and submitted operation plan.

The security self-declarations for each stage are as follows:

The relevant Shanghai authorities may also take into account test results outside of Pudong New Area as a reference to approve a simplified test process. In addition, once requirements have been met, companies can apply for batch confirmation for a number of the same model vehicles that are at the same stage.

II. Demonstrative Operation and Commercial Operation

Demonstrative operation refers to trialing commercial operation of ICVs to carry passengers, cargoes or special operations. This includes driving on highways (including expressways), urban roads (including urban expressways) and various road sections designated for the passage of social motor vehicles[1].

Commercial operation refers to carrying out road transport business by using ICVs after requisite road transport qualifications have been obtained[2].

Demonstrative operation is closely related to commercial operation, and the former is the premise and critical step for whether the latter can be carried out.

The Shanghai Transportation Commission has issued the Shanghai Rules for Demonstrative Operation of ICVs, which apply to the demonstrative operation of intelligent taxi, intelligent bus, intelligent heavy truck for carrying passengers and cargo (except for road transportation of dangerous goods) on all grades of highways (including expressways), urban roads (including urban expressways) and roads in specific areas within the scope permitted. The Shanghai Transportation Commission is also supporting application of intelligent cleaning, intelligent distribution, intelligent retail, intelligent train, intelligent minibus and other innovative applications. Relevant demonstrative operation vehicles in Pudong New Area shall meet the requirements of both the Pudong Innovative Provisions and Shanghai Rules for Demonstrative Operation of ICVs.

To carry out commercial operation, the relevant driverless ICVs shall: (1) obtain product access or have the product certification under the same conditions; (2) be suitable for business, pass the test, and obtain the vehicle operation permit in accordance with the laws; and (3) be registered with the public security organ, and obtain the vehicle plate, vehicle license, and other registration certificates. Companies engaging in commercial operations shall obtain the road transport qualification.

Charges can be collected for both demonstrative operation and commercial operation. The charging standards for demonstrative operation are required to be specified in the operation plan. When charges are collected from non-specific objects, the charging standards shall be publicized.

III. Data Security and Personal Information Protection

1. HD Map Data

The Pudong Innovative Provisions support companies conducting innovative applications to carry out HD map pilot applications in specific areas of Pudong New Area. In addition, the Shanghai Provisions on HD Maps for ICVs (Draft) issued by Shanghai Planning and Natural Resources Bureau, which intends to provide guidelines for carrying out HD maps pilot innovations in Shanghai, also set out strict requirements for the protection of HD map data.

The Shanghai Provisions on HD Maps for ICVs (Draft) stipulate that installing and using sensor equipment integrated with satellite navigation and positioning receiver modules, inertial measurement units, LiDAR, cameras in the vehicle, and collecting, storing, transmitting and processing surveying and mapping geographic information such as spatial coordinates, images, point clouds and attributes of the vehicles and surrounding road facilities during the testing and application process will be considered as falling within surveying and mapping activities.

Domestically owned companies must obtain the corresponding surveying and mapping qualifications as required by law or cooperate with companies holding the proper surveying and mapping qualifications. Foreign-invested companies are required to co-operate with duly qualified companies. The aforesaid definition and requirements are consistent with those of the Notice on Promoting the Development of Intelligent Connected Vehicles and Protecting Surveying and Mapping Geographic Information Security issued by the Ministry of Natural Resources on August 25, 2022.

In respect of data storage and transfer, the Shanghai Provisions on HD Maps for ICVs (Draft) specify that the server for storing data related to HD maps must be located within China. HD map data that has not completed the cross-border data transfer security assessment and obtained approval cannot be transferred outside China.

2. Cybersecurity, Data Security and Personal Information Protection

The Pudong Innovative Provisions require companies carrying out innovative applications for driverless cars to establish a cybersecurity management system, implement cybersecurity level protection system and guarantee safe and stable operation of networks.

The companies will also need to establish a full-process data security and personal information protection management system, and comply with security assessments before sensitive or important data can be transferred outside China. The security management of cross-border transfer of personal information shall be carried out in accordance with relevant laws and administrative regulations.

Linked to this, the recommended national standard Information Technology Security - Security Requirements for Automotive Data Processing (GB/T 41871-2022), which will come into force on May 1, 2023, provide further details and clarity as to the general security requirements for automotive data processing.

3. Data Regulations

The Pudong Innovative Provisions require companies conducting road tests, demonstrative applications or demonstrative operations of driverless ICVs to install monitoring devices and provide access to relevant data to a designated data platform in real time as well as submitting regular reports on the innovative applications.

IV. Traffic Violation and Accident Handling

The allocation of liability and handling of traffic violations and accidents has been a key concern for the automotive industry. The Pudong Innovative Provisions provide as follows:

Compared to the Administrative Regulations on Intelligent Connected Vehicles in Shenzhen Special Economic Zone, which came into force on August 1, 2022, for road safety violations, the driver of L3 and L4 self-driving vehicle shall be punished and the owner and managing personnel of L5 self-driving vehicle shall be punished. For situation where a traffic accident occurs and the self-driving vehicle is liable, the driver of L3 and L4 self-driving vehicle shall be liable and the owner and managing personnel of L5 level self-driving car shall be liable. For traffic accidents, the Pudong Innovative Provisions do not stipulate the liabilities of the vehicle owner or managing personnel, but only that the company to which the driverless ICV belongs shall first pay compensation and may recover from the responsible self-driving system developer, vehicle manufacturer, equipment provider, etc.

The Ministry of Industry and Information Technology and the Ministry of Public Security jointly issued the Notice on the Pilot Program on Access and Road Driving for Intelligent Connected Vehicles (Draft for Comments), which also provides for the allocation of liabilities for the pilot road driving for ICVs, but how it will interface with local regulations is yet to be clarified. For more information, please find in the article “It’s all in good hands - The development of intelligent connected vehicles in China is entering the fast lane” (《厚积而薄发——中国智能汽车发展驶入快车道》).

Summary

In 2022, there was competition between a number of cities in China to promote the development of ICVs.

Shanghai is not alone in the race. Shenzhen issued the Administrative Regulations on Intelligent Connected Vehicles in Shenzhen Special Economic Zone in November 2022. Beijing's High-Level Autopilot Demonstration Zone issued the first regulatory document for short-distanced passenger-carrying intelligent connected products which are not equipped with a driver’s seat and steering wheel - the Detailed Rules for the Administration of Driverless Shuttle in Beijing Intelligent Connected Vehicles Policy Pilot Zone (Road Test and Demonstrative Application). These also provide for the first time that driverless shuttles have a right of way in the form of a “vehicle code”[3].

Shanghai’s Pudong Innovative Provisions cover all stages of road test, demonstrative application, demonstrative operation and commercial operation as well as providing a framework to enable innovation for regional commercialization of driverless ICVs. We expect various manufacturing hubs in China will compete to attract ICVs.

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