Shanghai has approved the testing of Tesla’s Full Self-Driving (FSD) software on ten vehicles, potentially setting the stage for a broader deployment in China, as reported by The Shanghai Observer, a government-backed publication. This step could heighten competition within the world’s largest automotive market.
Potential Competitive Advantage for Tesla in China
If Tesla’s FSD proves successful in China, it could significantly alter the competitive dynamics in the market. Tesla would stand to gain a competitive advantage over local competitors by offering a more sophisticated driver-assistance system. This could also spark a price war centered around providing more affordable advanced driver-assistance features.
Groundwork for Broader FSD Rollout
Tesla has been preparing for a more extensive FSD rollout in China for the past four years by offering a limited version of FSD as a subscription service. In April, CEO Elon Musk visited Beijing, reportedly to discuss the planned launch. Further, news surfaced in May that Tesla was gearing up to register FSD with Chinese authorities.
Commitments Beyond FSD
Tesla’s dedication to the Chinese market extends beyond just FSD. In May, Chinese state media reported that Tesla is building a Megapack energy storage battery factory in Shanghai. Additionally, The Shanghai Observer notes that Tesla has signed a contract with Shanghai Lingang, indicating efforts toward local commercialization.
