Tesla’s FSD launch in China heats up competition with domestic EV makers

May 20, 2026

Tesla has announced the widely anticipated roll-out of its Full Self-Driving (FSD) system in China, just one week after company founder and CEO Elon Musk travelled to Beijing as part of a state visit by US President Donald Trump.

The arrival of the system will raise the self-driving game in a market where level three (L3) automated driving has been legalised.

“FSD Supervised” was now available in China and nine other countries including the US, Canada, Mexico, Australia, New Zealand, South Korea and the Netherlands, the electric vehicle giant said on social media on Thursday.

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FSD’s entry into China had been rumoured for the past few years, while the company’s Chinese entity awaited the nod from regulators.

“Trump’s visit to China has likely pushed up the long-awaited approval,” said Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank. “Tesla’s entry will drive greater competition and accelerate innovative development of [autonomous driving] in China.”

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As part of its push to get FSD approval, Tesla began operating a local artificial intelligence data centre and deployed localised training capabilities in preparation for larger-scale implementation in the future.

This localisation approach could help accelerate the adoption of FSD, which would be especially important for Tesla after its market share in China declined to 6 per cent in 2025 from a peak of 16 per cent in 2020, Ng said.

  

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