Tesla’s FSD Rollout in China Hits Regulatory and Competitive Hurdles

Tesla’s Full Self-Driving (FSD) system faces delays in China due to regulatory approvals and rising competition from local automakers like BYD. Learn more about the challenges Tesla encounters.

Tesla’s rollout of Full Self-Driving (FSD) in China is facing serious hurdles. From regulatory delays to fierce competition from Chinese automakers, the company is struggling to establish its autonomous technology in the world’s largest EV market. As local authorities drag their feet on approval and Tesla owners voice concerns over updates, homegrown brands are rapidly advancing their own self-driving solutions.

The biggest challenge for Tesla in China is government approval. Chinese regulators have yet to greenlight FSD, and sources suggest the delay may be about more than just safety concerns. Geopolitical tensions between the U.S. and China have made AI and autonomous driving technologies a sensitive topic, potentially turning FSD’s approval into a bargaining chip in broader trade negotiations.

Tesla initially expected to secure regulatory clearance in Q2 2025, but so far, there’s no timeline in sight. Without government approval, a full-scale FSD launch in China remains out of reach.

While Tesla struggles with bureaucracy, Chinese EV makers aren’t sitting idle. BYD, Tesla’s biggest competitor in China, has introduced its own self-driving system called “Eyes of God”, which will be available even in budget models priced at around $9,600—a price point Tesla can’t match.

Market numbers tell the story: in 2024, BYD’s sales in China soared 37% to 3.7 million cars, while Tesla managed only a 9% increase, selling about 660,000 vehicles. This suggests that Chinese companies are rapidly closing the technology gap, offering solutions tailored to local consumers.

Even those who already use FSD in China aren’t thrilled. Tesla’s latest update introduced city navigation, but many owners say the functionality still falls short, especially when compared to competing systems from local automakers.

The biggest frustration? Price vs. performance. Tesla owners pay a hefty premium for FSD, while Chinese brands offer similar features for free or at a much lower cost.

Another challenge for Tesla in China is data restrictions. China forbids exporting road data, while U.S. laws prevent training AI on Chinese datasets. As a workaround, Tesla relies on publicly available internet videos of Chinese roads to train FSD.

This method, however, is far from ideal. Without real-time data collection, FSD struggles to adapt to China’s unique traffic patterns, driving styles, and infrastructure.

Tesla is still pushing to expand its footprint in China, but the current roadblocks aren’t just short-term obstacles. If regulatory delays persist and local automakers continue outpacing Tesla in innovation and affordability, the company risks losing its competitive edge in the Chinese market.

For now, the future of FSD in China remains uncertain. But one thing is clear: the race for autonomous driving is heating up, and Tesla is no longer the sole frontrunner.

Source: autoblog.com