Tesla’s FSD is late, can it still set off a wave of smart driving?

Wen| New Product Strategy Finance  Wu Wenwu

Tesla has quietly introduced FSD into the China market. This is only the beginning. China is accelerating its entry into the era of national smart driving. Is Tesla’s China version of FSD still attractive? Can it still set off a wave of smart driving?

01 Tesla FSD is here, but not all of them

After a long time, Tesla’s long-awaited FSD (Fully Autonomous Driving) has entered the China market in a very low-key way.

“New Products and Economics” noted that on February 25, Tesla pushed the 2024.45.32.12 software update to the apps of some domestic Tesla car owners. The main upgrade content is Autopilot automatic assisted driving on urban roads (optimizing the existing NOA automatic assisted navigation driving function), cab camera, and map pack version updates.

Tesla launches Autopilot autonomous assisted driving on urban roads (Optimize the existing NOA automatic assisted navigation driving function), on controlled roads (Road users enter and exit the main road through ramp entrances and ramp exits) and urban roads using Autopilot automatic assisted driving will guide vehicles out of ramps and intersections according to navigation routes, identify traffic lights at intersections to go straight, turn left, turn right, turn, etc., automatically change lanes according to speed and route. When no navigation route is set, the optimal road will be selected based on the actual situation of the road.

Tesla’s China official website has also changed the definition of this smart driving system from FSD fully autonomous driving to FSD automatic assisted driving kit. Tesla customer service said that the functions of this software update are different from the US version of FSD functions.

According to media reports, Tesla’s true full-featured autonomous driving FSD is still being tested and optimized.

According to reports later quoted by multiple people who came into contact with Tesla, Tesla is currently conducting targeted FSD testing for some employees in China, covering some personnel in the R & D department. If things go well, Tesla China will conduct internal employee batch testing, and then submit vehicle recall (OTA) approval to the Ministry of Industry and Information Technology, and then push upgrades to Tesla owners who have purchased FSD functions. Tesla China originally planned to obtain push licenses from relevant departments at the end of March or early April this year.

Tesla proposed FSD as early as 2022. Since the release of this technology, every time there is a trend, it has attracted much attention. At present, Tesla FSD has not been used in other countries and regions except in the United States. Promote this technology.

Musk and Tesla have been promoting their implementation in the China market in FSD as planned.

At the end of April last year, Musk suddenly visited China briefly to interact with senior officials in China to discuss legal applications of FSD and data security issues, focusing on the localization of the FSD system.

Musk said in September last year that if he could successfully obtain regulatory approval, he would deploy it in China and Europe as soon as the first quarter of this year.

According to the current progress, Tesla’s comprehensive launch of fully autonomous driving FSD has been delayed than expected.

Tesla finally launched some FSD automatic assisted driving functions in a low-key manner this time, and did not launch FSD fully autonomous driving technology as the market expected. Therefore, Tesla’s FSD is here, but not all of them.

However, Tesla has launched some FSD functions, which has finally met the expectations of the market, especially those who are looking forward to Tesla’s FSD functions and are willing to try them out.

02 Can the China version of Tesla’s FSD still cause huge waves?

Although Tesla’s FSD fully automatic driving function did not come this time and only pushed some functions, it still attracted market attention and heated discussion.

So, in the current context of smart driving for all people in the new energy vehicle industry, is Tesla’s China version of FSD still attractive? Can it still set off a wave of smart driving?

As mentioned above, Tesla proposed FSD as early as 2022. At that time, Tesla was at the forefront of the industry in smart driving. Judging from the various FSD smart driving videos circulated on the Internet, there are indeed several brushes.

When Tesla was fully developing FSD, at that time, China car companies, especially China’s new car-building forces, were still in the exploration and rise period. Survival was the key, and smart driving was not the most important thing.

However, in the past year or two, China car companies, smart driving companies, and Internet technology giants including Baidu have all launched their smart driving and autonomous driving businesses, and the iteration of technology updates is very fast. In particular, last year, Baidu’s radish fast run was tested in Wuhan, which attracted widespread attention and heated discussion inside and outside the industry.

China’s local smart driving level, technical strength and other aspects have successfully explored a smart driving path suitable for the actual transportation environment of China.

Many new local car-building forces in China, represented by Xiao Peng, have invested heavily in smart driving research and development since their establishment, and have also won recognition from the German Volkswagen Group. In particular, Huawei’s smart driving solutions have been well implemented on Huawei’s car brand.

BYD, which has been rushing all the way in the past year or two, has had no interest in autonomous driving and smart driving technology. Unexpectedly, its attitude has changed 360 degrees since last year, slamming smart driving technology. BYD threw a killer weapon to the market at the beginning of this month. It not only has high-end smart driving, but also decentralized smart driving technology to models that sell for tens of thousands of yuan.

In the past, car brands all talked about high-end smart driving, but now we have ushered in the era of smart driving for all people. Smart driving has become one of the key influencing factors in China consumers ‘car purchase decisions.

Tesla FSD, which was originally at the forefront of smart driving, is now very competitive, but this does not mean that China’s local smart driving is not attractive.

According to New Products Finance, from the beginning, to the present and in the future, Tesla FSD will face many challenges in China, mainly in three aspects.

The first aspect is the problem of acclimatization. The actual environment of road traffic between China and the United States is too different. Transportation participation roles such as motor vehicles, non-motor vehicles, and electric bicycles make the actual road conditions more complicated. Even a bus lane drives Tesla FSD crazy.

The second aspect is compliance and supervision issues. China strictly supervises and standardizes big data, and data cannot be exported. Tesla can only conduct localized testing and adjustments in the China market based on foreign big data training. Before formally and fully opening up FSD technology, Tesla needs to do all aspects of work to meet regulatory requirements.

The third aspect is the high price of FSD, which needs to be accepted by more China Tesla owners. For example, Tesla’s 64,000 yuan FSD intelligent assisted driving function is as high as one-third of the price of a new car. Whether it can be accepted by China Tesla owners is still a big question.

Well-known auto blogger Chen Zhen released a video of his FSD experience at Cybertruck in the United States in early January this year. Chen Zhen is not satisfied with Tesla’s FSD performance. He feels average. Overall, it is not as good as Xiaopeng and Huawei’s performance on the domestic road.

China has entered the era of national smart driving, and the wave of local smart driving is on the rise in China. Although Tesla FSD is worth looking forward to, it seems that its halo effect is gradually weakening.

Currently, some functions of Tesla FSD technology are only available to some car owners who purchase it. This is just a small-scale public test of Tesla FSD.

Whether Tesla FSD will be attractive in the future depends on Tesla owners, which depends on how many car owners are willing to pay for the high-priced Tesla FSD.

It can be seen that Tesla FSD is here, but the fully autonomous driving function has not yet arrived. In the era of universal smart driving and equal rights in smart driving in China, Tesla FSD cannot set off a wave of smart driving for the time being.

03  FSDIt’s just the icing on the cake and won’t alleviate Tesla’s anxiety

In the eyes of China consumers, cars are the largest commodity for households to spend after houses. When purchasing a new energy vehicle, the car itself and what you see and what you gain are the most important.

Intelligent driving of vehicles is standard and is already an indispensable part, but it is not the most concerned. Moreover, China’s new energy vehicles are promoting intelligent driving, and the era of equal rights for intelligent driving has accelerated.

Therefore, from this perspective, FSD is the icing on the cake. Even if this technology is fully opened in the future, it will still require a process of adapting to the China market, and there are still variables or uncontrollable.

However, from the perspective of building and selling cars, Tesla cannot sit back and relax this year. It can even be said that a hidden crisis is gradually emerging.

According to public data, Tesla’s global sales in 2024 will be 1.7892 million new vehicles, a decrease of about 20,000 vehicles compared with 1.808 million vehicles in 2023 and a year-on-year decrease of 1.1%. This is the first time Tesla’s sales have declined in more than a decade.

Similarly, Tesla’s market share in the China market fell. Data shows that Tesla’s sales in the China market in 2024 will be 657,000 units, a record high, with a cumulative increase of 8.8%. However, its share of the entire market has dropped to 5.4%, down 2.4 percentage points from 2023. This is not a good signal for Tesla.

After entering 2025, Tesla has received bad news one after another. For example, in January this year, sales of electric vehicles in Europe were booming, surging by 37% that month. Germany and the United Kingdom grew rapidly. However, Tesla alone registered only 9945 cars in January, a drop of 45% from 18161 vehicles in the same period last year, almost halved.

One of the important reasons for the decline in Tesla’s sales in Europe is Musk’s crazy involvement in politics, which to some extent damaged Tesla’s brand image in Europe and was boycotted by European consumers.

For Tesla, selling cars is still the top priority, so Tesla will still have a lot of pressure in 2025.

Tesla has released a renewed version of the Model Y in the China market and has achieved mass production. Although there are upgrades, the changes are not obvious. Tesla hopes that the new Model Y will drive its sales in the China market this year.

Tesla has low-key launched some FSD functions in the China market this time. It also hopes that this move will increase the appeal and market competitiveness of Tesla models. It has been interpreted by the outside world as Tesla’s short-term helplessness in the China market.

Currently, there is a need to alleviate Tesla’s anxiety and increase Tesla sales. What the market is most looking forward to is the cheap version that Tesla will launch, which looks more like a scaled-down version of Model Y.

According to media reports, a Tesla executive recently revealed on an overseas program that the new Model Y will be launched in the future with a seven-seat version and a high-performance version. The domestic six-seat version of Model Y will be lengthened. At present, Tesla officials have not confirmed this news.

At present, the consumer demand for electric vehicles in the international market has dropped significantly, and Tesla’s sales in Europe have declined. This is not a good signal for Tesla. Then the sales performance in the China market in 2025 will be for Tesla It becomes even more important.

Tesla previously set an overall sales growth target of 20% to 30% for 2025, which means that Tesla needs to sell at least nearly 2.5 million new cars in 2025. Judging from the current situation, it is not easy to achieve this goal.

Therefore, it is important for Tesla to accelerate the full implementation of FSD in the China market. However, FSD is only a icing on the cake in the short term and cannot alleviate Tesla’s anxiety. Tesla should sell more cars.