The online search company is talking to city authorities in China, and has designs on launching autonomous cars in 10 Chinese cities within three years, reported Bloomberg. The company also plans to test out their vehicles with a small group of drivers this year in a closed environment, said Wang Jing, senior vice president overseeing Baidu’s driverless vehicle project.

Baidu’s progress puts them in direct competition with the likes of Google (GOOG) and Tesla (TSLA) in the race to become the dominant company in a nascent industry. Self-driving vehicles could turn into a $42 billion market by 2025, according to Boston Consulting Group, and automakers like BMW and Audi are also developing their own driverless technology.

Baidu believes its knowledge of China’s road conditions will give them an edge in developing autonomous cars for the Chinese. “Many people who have returned after years of living abroad find they’re not used to driving in China, are afraid of driving in China because conditions are much more chaotic,” Wang told Bloomberg. “If you have a robot that’s trained on U.S. roads, for instance, they’ll struggle to adapt to the way Chinese cross roads. Our robots are trained on Chinese roads.”

In December, Baidu announced their vehicle had completed a fully autonomous test around a 30-kilometer route with different turns and weather conditions. According to Bloomberg, for the past three months, Baidu has been partnering with leading Chinese electric car maker BYD to develop the company’s AutoBrain system, a software package that forms the heart of its autonomous driving ambitions.

The software uses different technologies, such as object recognition and 3D road mapping, to improve the performance of its driverless vehicle.