Tesla is struggling to get approval for its Full Self-Driving (FSD) technology in China, with no clear timeline from regulators. According to a report by the Financial Times, the delay may be linked to the ongoing U.S.-China trade war, putting Elon Musk’s company in a difficult position.
No Clear Timeline for Approval
The EV company initially expected to secure a license for FSD in China by mid-2025. However, Chinese authorities have not confirmed when, or if, this will happen. The approval would allow Tesla to offer its semi-autonomous driving system in China, boosting its revenue through subscriptions and potentially improving its declining sales in the region.
The FSD system enables cars to accelerate, steer, brake, and change lanes, but drivers must still remain attentive. Tesla had planned to launch this technology in China and Europe in early 2025, pending regulatory approval. Now, that timeline is uncertain.
Trade War Complicates the Process
The delay in approval appears to be tied to U.S.-China trade tensions. The U.S. recently imposed a 10% tariff on Chinese products, prompting Beijing to retaliate with its own tariffs on American goods. Sources suggest that China may be using Tesla’s FSD approval as a bargaining tool in trade negotiations. If talks between the two countries improve, the EV company might get the green light. However, some within the company believe approval is unlikely without a major shift in trade policies.
The EV company, along with Chinese regulatory bodies and Musk himself, has not commented on the issue.
Musk’s Political Ties May Backfire
Musk has been a key supporter and advisor to former U.S. President Donald Trump. While this may help him in the U.S., it could be a disadvantage in China, where political and business interests are closely linked. Musk has personally led the company’s lobbying efforts in Beijing, even meeting with Chinese Premier Li Qiang in April.
In June, Shanghai allowed limited FSD testing with 10 Tesla vehicles, a step toward wider approval. Tesla has also partnered with Chinese tech giant Baidu for navigation and mapping. However, progress has stalled due to strict data security rules in both the U.S. and China.
The EV company’s FSD relies on massive amounts of video data to train its artificial intelligence. The problem? China won’t allow Tesla to transfer video data out of the country, while the U.S. doesn’t permit training to happen in China. Musk called this situation “a bit of a bind,” making it clear that Tesla is stuck between two governments with opposing policies.
Even if China grants the EV company an FSD license, these data restrictions could remain a significant hurdle.
Rising Competition in China’s EV Market
Tesla was once a leader in China’s electric vehicle (EV) market, but local competitors have since gained ground. Chinese automakers, like BYD, offer lower prices and more advanced features, making them strong contenders. In January, the EV company accounted for only 4.5% of new EV sales in China, while BYD controlled 27%. BYD’s new “God’s Eye” driver-assistance system could further widen the gap.
Tesla is betting on FSD to help regain its edge, charging U.S. customers $99 per month for the feature. However, delays in China could hurt Tesla’s ability to compete in one of its most important markets.
Tesla’s Track Record of Missed Deadlines
While Tesla aims to launch fully autonomous vehicles in Texas by June, the company has a history of missing its self-imposed deadlines. U.S. regulators are also investigating multiple accidents involving FSD, raising concerns about its safety and Tesla’s claims.
Musk himself admitted in 2024 that his predictions about self-driving technology have been “optimistic.” Still, he insists Tesla’s FSD will surpass human drivers by the end of this year. Whether that happens or not, the company must first overcome regulatory and trade barriers in China to expand its presence in the world’s largest EV market.
Tesla’s struggle in China highlights the impact of global politics on business. The company’s success depends not only on its technology but also on navigating complex international relationships. As the U.S.-China trade war continues, Tesla’s future in China remains uncertain.
