Thematic Spotlight: Teslas Drive Themselves in Europe and China

Tesla has said it is on track to launch “Full Self Driving” (FSD) in China and Europe by Q1 2025.1 The announcement, which first came as a post from CEO Elon Musk on social media platform X (formerly Twitter), marks the first time Tesla has put a clear timeline on the release of FSD.2 FSD has long been touted as a key pillar of Musk’s strategy to lift Tesla beyond a car manufacturer and justify its valuation as an AI/technology firm. The enigmatic CEO first discussed the possibility of FSD as early as 2013, and investors have since waited, with increasing impatience, for that reality to come to fruition.3 Initial reaction to Musk’s X post saw Tesla shares jump 6%.4

Despite the surge in excitement, Tesla’s upcoming FSD launch is not yet set in stone. The company has yet to receive full regulatory approval in either region, but previous posts by Musk suggests the EV maker expects to obtain clearance by the end of 2024.5 “Full Self Driving” itself is also somewhat of a misnomer, as the version of FSD being released in both regions will not be capable of making fully autonomous driving decisions – drivers will still be required to supervise and take over when necessary. As for delivery, the package will release as an update to Tesla’s existing “Autopilot” driving assistance system which is already available in Europe and China. An “Enhanced Autopilot” which is similar in nature to FSD also currently exists as a premium option in China.

In a best-case scenario for Tesla, the approval of FSD would help the firm defend its eroding market share in two of the most competitive EV markets in the world. Particularly in China where Tesla has been repeatedly challenged by cheaper and government-sponsored brands such as rival BYD, Nio, and XPeng. Tesla’s shipments to China have fallen ~6% YTD YoY, according to data from the China Passenger Car Association.6

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