Tesla (TSLA) to Register FSD Software With Authorities in China

Zacks Equity Research
·3-min read

Tesla TSLA is getting ready to register its Full Self Driving (FSD) software with authorities in China, making progress toward its plan of launching the technologically advanced feature this year, per Reuters.

The EV manufacturer is contemplating its plan to sell the software on a monthly subscription basis to its users in China.

If the automaker successfully registers the software with China's Ministry of Industry and Information Technology, it will be able to start conducting internal testing of FSD on public roads in China. Following that, it will offer upgrades to its customers in China in the coming months.

Currently, Tesla offers two precursory versions of its Autopilot driver assistance system in China.

The automaker presently offers its vehicle owners access to FSD for a one-time fee of 64,000 yuan. In the future, it may offer service for a monthly fee equivalent to about $98.

Tesla is also mulling over its plan of licensing FSD to other automakers in China.

Sales of FSD in China would generate a new source of revenues for Tesla. In the first four months of 2024, the sales volume of TSLA in China fell 7.6% due to price competition with local EV makers.

Tesla is intensifying efforts to develop its self-driving system using data collected and processed in China. The company is preparing to roll out version 12 of its FSD software in China, aiming for fully autonomous driving.

Tesla will join at least 10 automakers and suppliers, including Huawei and Xpeng, offering level-two autonomous driving capabilities in China. Unlike TSLA, which charges for FSD, competitors like Li Auto and Xpeng provide similar systems for free on high-end models, while others like Nio offer free trial periods.

Level-two systems, including FSD, require attentive drivers, but the company claims that fully autonomous vehicles are close. Tesla plans to reveal details about its robotaxi program in August. Its AI model, an end-to-end neural network, differs from traditional rule-based algorithms, potentially enabling faster learning and more human-like decision-making. Huawei and Xpeng are also developing similar AI models for autonomous driving.

Zacks Rank & Key Picks

TSLA currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Blue Bird Corporation BLBD and Oshkosh Corporation OSK, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The earnings per share (EPS) estimates for 2024 and 2025 have moved up 21 cents and 34 cents, respectively, in the past 30 days.

The consensus estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.29% and 155.14%, respectively. The EPS estimates for 2024 and 2025 have improved 63 cents and 69 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 9.86% and 11.92%, respectively. The EPS estimates for 2024 and 2025 have improved 12 cents and 10 cents, respectively, in the past seven days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

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