Tesla is waiting for the approval of its (supervised) Full Self-Driving (FSD) system in China, but now a new report claims that Chinese authorities are considering using it as a bargaining chip in the ongoing trade war with the US.
Last year, there were reports that Tesla was getting close to a deal with China to bring its FSD system into the market, but it has yet to happen.
During Tesla’s last earnings call last month, CEO Elon Musk threw some more cold water on Tesla’s FSD prospect in China:
“They won’t currently allow us to transfer training video outside of China. And then the US government won’t let us do training in China. It’s a bit of a quandary.”
The CEO said Tesla is training its system using publicly available videos of Chinese streets and simulators instead. Nonetheless, Musk claimed that Tesla aimed to release FSD in Europe and China in early 2025 and that it could have unsupervised self-driving in China by the end of next year – though he has also claimed that this would happen in the US every year for the last 6 years.
Related: Tesla Launches New Model 3 Performance in China
The pressure is ramping up for Tesla. China is its most important market and it’s the only one where Tesla’s sales are not dropping.
But that might change with increased competition, including from its main competitor BYD, which just released a competing product to FSD.
This situation makes Tesla’s FSD approval in China even more critical and it looks like the Chinese government is taking note.
A new report from the Financial Times claims that China is looking to use FSD approval in the country as a bargaining chip amid the trade war with the US:
Chinese authorities are contemplating using the approval of Tesla’s autonomous-driving licence as a bargaining chip in trade negotiations with Trump, said two of the people with knowledge of the delay, adding that this was the main reason for the hold-up in granting the permit.
Electrek’s Take
China is smart. Using the approval of a car feature from a single American automaker as a bargaining chip in a trade war about trillions of dollars in goods might sound ridiculous, but it’s not – at least, if you look at it from China’s perspective.
Tesla is Musk’s piggy bank. Most of his wealth is attached to Tesla’s stock, and Musk has attached Tesla’s stock to self-driving. If Tesla can’t sell self-driving in its most crucial market while competitors can, it is screwed.
It could push Musk, who has Trump’s ear, to lobby for China. If it doesn’t sound above board for you, it’s not, but with this administration, you have to lower expectations.
Author: Fred Lambert
Source: Electrek
This is why Trump likes dictatorships over democracies. It’s all in the grift. China will probably be happy to buy a billion dollars in Trump coins and get rid of tariffs that would cost it many billions. Canada wouldn’t do that. So Trump has to demonstrate to China that he’s serious about tariffs by hurting democracies so that the dictators know they need to pay up. FSD is small change. The big deal is that Trump coins allow them to directly buy off Trump himself.
Tesla has reportedly been told there is no definitive timetable for regulators to approve a license. According to the report, the approval is unlikely unless the US backs off with its tariffs.