Preliminary investigations revealed that the SUV caught fire after crashing into a concrete post at high speed shortly after the driver engaged the Advanced Driver Assistance System (ADAS).

This regulatory response was announced during a meeting with 60 representatives from the automobile industry, highlighting the government's commitment to addressing safety concerns.

While these stricter regulations may increase costs and slow innovation, experts believe they could also lead to consolidation in China's crowded automotive market.

Experts warn that consumer confusion regarding the capabilities of driver-assistance systems poses significant safety risks, as many mistakenly equate these systems with full autonomy.

Following a fatal accident involving a Xiaomi SUV, Chinese authorities have banned terms like 'smart driving' and 'autonomous driving' in vehicle advertisements.

The new regulations aim to ensure that automakers accurately represent their driver-assistance features, particularly in light of recent safety incidents.

Regulators are also implementing stricter standards for electric vehicle batteries to mitigate fire and explosion risks, reflecting a broader push for safety in the industry.

This regulatory environment comes as automakers race to launch new models equipped with ADAS features amid a competitive price war in the Chinese automotive market.

As part of this crackdown, BYD's recent launch of 21 electric vehicle models, heavily marketed for their 'smart driving' features, will require reevaluation to comply with the new regulations.

Under these rules, automakers must conduct thorough testing and obtain government approval before introducing new driver assistance features via software updates.

Additionally, companies are required to follow recall procedures for emergency over-the-air updates, which will particularly impact leaders in autonomous technology like Tesla and BYD.

In response to these challenges, Chinese regulators are tightening scrutiny over marketing practices to prevent misinformation about vehicle capabilities.