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Cars will allow drivers to take their hands off the wheel

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GAC says it has similar plans to launch L3-ready models

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Price war in China's auto market evolving to focus on tech

HANGZHOU, China, March 18 (Reuters) - Chinese automakers

Zeekr Group and Xpeng ( XPEV ) said on Tuesday they

would start selling electric vehicles equipped with technology

that will allow drivers to take their hands off the steering

wheel, heating up a smart driving tech war.

The companies, along with Guangzhou Automobile Group (GAC)

, made separate announcements that they would roll

out models with so-called L3-ready autonomous driving

capabilities, a shift for the sector that has so far only had L2

systems.

Zeekr said it would officially unveil its 9X sport utility

vehicle with the technology at the Shanghai autoshow in April

and start deliveries in the second half of 2025. Xpeng ( XPEV ) told a

post-earnings analyst call it would achieve L3-level software

capabilities in the second half of the year and would start to

mass-produce models with L4-ready technology in 2026.

Meanwhile, GAC said at a company event it would start

selling L3-ready models in 2025 and was also working on L4

models, local media reported.

The auto industry has defined five levels of autonomous

driving, from cruise control at level one to fully self-driving

cars at level five, and level three means cars can drive without

a human driver's supervision. In reality, this means drivers can

take their eyes off the road and hands off the wheel for

extended periods, but are expected to be able to take over in

seconds.

Level three technology has so far only been used on a trial

basis worldwide. China in June allowed a first group of nine

automakers including BYD and Nio,

as well as major state-owned manufacturers such as Changan

Automobile and GAC, to carry out tests on level three vehicles

on public roads.

The tests are seen as a must for regulators to approve the

cars for public sale and business operation in China, and Zeekr,

Xpeng ( XPEV ) and GAC will need regulatory approval before drivers will

be able to use the level three features in their cars.

The announcements point to how a two-year-long brutal price

war in China, the world's largest auto market, is evolving to

become one focused on technology.

Smart driving technology used to be offered as a premium

feature for cars, but Chinese electric vehicle giant BYD last

month said it would offer such systems on most of its line-up at

no additional cost, prompting a slew of companies to follow

suit.

According to Chinese laws, automakers will take legal

responsibility for traffic accidents in the event of level three

system failures, and drivers are still required to maintain

constant attention and take control of cars with level two

capabilities, such as Tesla's Full Self-Driving.

Zeekr's CEO told reporters that the 9X SUV will be equipped

with five lidars and a driving domain controller powered by two

Nvidia Thor chips, which CEO Andy An said would hike

costs significantly but were necessary to ensure safety under

level three.