China is postponing plans for massive autonomous vehicle (AV) deployment from its original target by five years as auto and tech companies continue to struggle with the challenges of truly driverless vehicle adoption.

Why it matters: China backing off its ambitious plans underscores the challenging technological leap that self-driving technology has proven to be.

Global auto tech giants have struggled to make autonomous cars safe for public use. The valuation of Google’s AV arm Waymo was slashed by 40% to $105 billion late last year, while General Motors-backed Cruise delayed the launch of its robotaxi service beyond 2019.

Venture capitalists are more cautious about the self-driving industry—recent valuations for some AV startups have stalled, adding to fears that the industry will soon undergo consolidation, according to a TechCrunch report.

Details: China is postponing its original goal to achieve “mass production” of intelligent vehicles with “conditional” self-driving capabilities to 2025 from 2020, according to a development plan recently released by the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT), among others.

In a draft version released (in Chinese) by the NDRC for public review in January 2018, Beijing set a target that more than half of new cars sold in China should have autonomous driving functionalities by end-2020. There were 27.8 million new cars sold in China in 2019.

Beijing has abandoned that goal in the finalized plan, and did not disclose its new production volume goals.

A plan for clean energy vehicle development released by MIIT in December pinpoints the percentage at around 30%, or 7.7 million units, a calculation based on last year’s auto sales in the country.

“Conditional driving automation” is also known as Level 3, meaning that a car could drive itself under certain conditions but still requires a human driver ready to intervene, according to a rating from the Society of Automotive Engineers (SAE).

Context: Recent research by business consultancy AlixPartners shows that consumers still have safety concerns about sharing the road with vehicles operating in autonomous mode, as well as limited willingness to pay for the functionality.