US electric carmaker Tesla is expanding its Chinese engineering team to accelerate the launch of self-driving features in the country as it pursues “full vehicle autonomy” by the end of this year, CEO Elon Musk said on Thursday.

“I really want to emphasize that it’s not just copywriting sort of stuff from America to work in China. We will be doing original design and engineering in China,” Musk said in a recorded video speech played on Thursday during Shanghai’s annual World Artificial Intelligence Conference (WAIC).

The electric vehicle giant maintained an earlier statement that its vehicles will be capable of “basic functionality for Level 5 autonomy completed this year,” according to Musk.  

Level 5 (L5) autonomy refers to a fully autonomous driving system which can handle all driving tasks without the need for human guidance, according to definitions set by the Society of Autonomotive Engineers (SAE).

Musk also said that Tesla has already produced the hardware needed for full self-driving capabilities, including an in-house designed AI chip known as Autopilot Hardware 3. The company can achieve L5 autonomy “simply by making software improvements,” he said.

Tesla has been ramping up its hiring in China, creating positions in departments from data engineering to server architecture as part of a broader strategy to localize software and user data in the world’s biggest auto market, according to a report from Chinese media. It had 3,200 employees in China as of late last year, Reuters reported citing its chairwoman Robyn Denholm.

The announcement comes as competition for market share with Chinese EV companies has intensified amid slowing growth. Chinese Tesla challenger Nio partnered with Intel’s automotive sensor company Mobileye to jointly mass-produce highly automated vehicles, which are scheduled for release in 2022. Alibaba and Xiaomi-backed Xpeng Motors, meanwhile, released their first sedan, the P7, with an advanced driving-assist platform which the company said was optimized to handle Chinese traffic conditions. CEO He Xiaopeng in April said the company will introduce a highway self-driving function to car owners with over-the-air updates next year.

Traditional automakers are also catching up. Changan Automobile launched earlier this year what it said was China’s first volume-production vehicle model with Level 3 autonomy. The state-owned automaker sourced self-driving chips for vehicle perception from Horizon Robotics, a Chinese chipset startup backed by Intel, Hillhouse Capital, and Sequoia Capital China.

Tesla pulled ahead of local automakers with the delivery of a record 14,954 China-made vehicles last month, a fifth of the country’s total EV market share. Meanwhile, Nio’s June deliveries almost tripled year on year to 3,740 units, while Meituan-backed Lixiang followed with sales of around 2,000 vehicles during the month.

Young Chinese EV makers sold a total of 9,470 units in June, accounting for 14% of the EV segment, compared with a mere 7% market share the same period a year earlier, according to figures from the China Passenger Car Association (CPCA).

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen