Tesla CEO Elon Musk announced on Thursday that he expects the company’s Full Self-Driving (FSD) software to gain full regulatory approval in China by early next year, potentially around February or March.
Musk’s comments came during Tesla’s annual general meeting, where he also noted that the system currently has only partial approval in the country.
China remains a key market for Tesla, though its market share has declined to 8% in the latest quarter, down from a high of 15.4% in Q1 2023. Local automakers have been steadily attracting customers by offering advanced driver assistance features at no extra cost, intensifying competition for Tesla.
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The FSD system has been partially approved in China since February 2025. Before that, Tesla owners could only use the less advanced Autopilot option. Many buyers in China paid 64,000 yuan ($9,000) for FSD, anticipating a rapid full rollout. The continued delay in approval has created friction among these early adopters, who have been unable to fully utilize the capabilities of the software they purchased.
Currently, Tesla’s FSD in China operates under limitations. The system cannot autonomously change gears, meaning vehicles cannot complete trips from one parking space to another without driver input. It has also struggled with accurately reading local traffic signs and road markings, complicating the path to regulatory approval.
Musk’s prediction comes amid broader challenges for Tesla in obtaining safety approvals in its home market of the United States. Regulators, including the National Highway Traffic Safety Administration (NHTSA), have raised concerns about the company’s FSD system and its ability to operate safely under varying conditions.
In August, the NHTSA launched an investigation into Tesla over software reliability, accident reporting, and the pace at which autonomous features are deployed. The regulator said automakers are required to report crashes involving advanced driver-assist features “within one or five days” of an incident. But Tesla was filing reports “several months or more” after crashes occurred.
Tesla has failed to meet the standing general order (SGO) safety requirement issued in 2021. The mandate compels automakers and robotaxi companies to disclose crashes involving both fully autonomous vehicles and Level 2 driver-assist systems. Under the order, any collision must be reported if an automated driving system was engaged within 30 seconds of impact.
Since the rule came into force, Tesla has disclosed over 2,300 crashes to the federal government. An analysis of the data reveals Tesla accounted for 40 out of 43 fatal crashes reported under the SGO, underscoring its outsized role in accidents tied to semi-autonomous systems. The company told regulators that the delays stemmed from a data collection issue that has since been corrected.
These ongoing hurdles highlight that even as Tesla pushes for global expansion, regulatory compliance remains a critical bottleneck for its autonomous driving ambitions.
Analysts note that full approval in China could bolster Tesla’s market position, particularly among premium buyers, while providing an opportunity to demonstrate its autonomous driving technology under strict regulatory standards. The push for approval in China has become urgent following Tesla shareholders’ approval of the $1 trillion compensation package for Musk. The plan is tied to the CEO boosting Tesla’s valuation to over $8 trillion.
If Tesla secures full approval, the FSD system could unlock a wider range of autonomous features specifically tailored to Chinese roads and traffic conditions, helping the company recover market share lost to competitive domestic brands.