FSD is about to enter China, can it add fire to domestic autonomous driving？

Among Tesla’s core technologies, FSD ("Full Self-Drive") is undoubtedly the most concerned core. However, due to various restrictions including laws and regulations, FSD has not been introduced into the domestic market, which has become a big regret for Tesla owners. However, it has recently been reported that the relevant person in charge of the Intelligent Manufacturing Promotion Department of the Shanghai Economic and Information Committee introduced that in the next stage, Shanghai will further deepen its cooperation with Tesla and promote the layout of functional sectors such as autonomous driving and robots in Shanghai. There are indications that the policy barriers for Tesla FSD to enter the domestic market are constantly being cleared. Chu Ruisong, general manager of Baidu Smart Car Division, even directly predicted that FSD will enter the China market this year or next year, and will be opened on a large scale in 2025.

1. Tesla needs FSD to re-establish its technological advantages.

From Tesla’s point of view, it is becoming more and more urgent to introduce FSD into the domestic market.

First of all, at present, domestic mainstream car companies are advancing by leaps and bounds in the field of smart electric vehicles, and Tesla’s technological advantages are rapidly approaching by domestic car companies. To this end, Tesla, which has a relatively limited vehicle matrix, can only sacrifice weapons with cost performance. Improve the cost performance of products through continuous price reduction, and then increase terminal sales. In this case, it is of great significance to introduce the latest FSD technology into China, which can help Tesla reconfirm its leading position in technology.

Secondly, Tesla’s FSD needs to accumulate a large number of actual road data to continuously optimize the algorithm. Therefore, after the introduction of FSD into China, Tesla can help Tesla collect a large number of valuable data and lay the most solid foundation for the iterative update of the algorithm after meeting the requirements of domestic laws and regulations on data collection.

Finally, Tesla is the standard-bearer of "Software Defined Car". FSD is expensive in North America, and the price of bicycles is nearly 100,000 RMB. And the gross profit margin of software is very high. Under the background of Tesla’s continuous price war, if FSD can contribute enough sales volume, it will give Tesla greater confidence to fight the price war.

2. Does FSD still have advantages?

As one of the labels of Elon Musk, Tesla has been investing a lot of money in FSD to maintain the advanced technology. Domestic car companies choose Tesla’s technical route more in many key technical choices to ensure that there will be no strategic mistakes in the direction.

In the whole automobile industry, Tesla was the first to apply the neural network model Transformer to the intelligent driving of mass production vehicles, about two years earlier than other automobile companies. Compared with the previous convolutional neural network CNN, the neural network model Transformer has been significantly improved in efficiency and accuracy, but it also requires more data. In 2022, Tesla was the first in the industry to release the Occupancy Network that can detect general obstacles. In addition, Tesla FSD’s solution is a set of solutions that do not rely on high-precision maps, which greatly expands the scenarios in which FSD can be applied.

For many domestic automatic driving/driving assistance schemes, although we can also realize the functions of automatic lane change, automatic overtaking and automatic on-off ramp, we are expanding from expressway to urban road scene. However, our scheme relies more on lidar and high-precision maps. Compared with Tesla’s pure vision scheme, the former is more expensive and the data fusion is more difficult. Moreover, most domestic autonomous driving technical solutions rely on high-precision maps, so there are many limitations in the use of scenarios. Therefore, these factors are integrated, and Tesla FSD still has its index significance.

However, we also have to admit that although FSD has no small lead, it still faces many challenges to fully realize FSD in domestic road conditions. On the one hand, domestic legislation needs to keep up with it in time, giving a green light at the policy level for enterprises to deploy FSD; On the other hand, the domestic working conditions are more complicated, especially on urban roads, there will be many unpredictable long tail working conditions. In this case, in a short period of time, it is basically difficult for L4-level autopilot to be deployed commercially. Even if the performance of FSD is advanced, it can’t escape this category. Therefore, how Tesla chooses the deployment scope of FSD and maximizes the performance advantages of FSD is a big test for Tesla.

3. Will the China autonomous driving market "wolf come"?

For domestic car companies, there is a phenomenon worthy of attention. At present, not only Tesla’s FSD, but also Mercedes-Benz’s Drive Pilot are actively getting approval from China government departments to introduce relevant technologies into the domestic market. Especially the Drive Pilot of Mercedes-Benz, although there are many restrictions, it is the only L3-level automatic driving system in the world that allows drivers to engage in other activities in the car without paying attention to the operation of the whole vehicle. At present, no vehicle manufacturer in China can give such a promise to Mercedes-Benz.

As the world’s largest smart electric vehicle market, it is a general trend for foreign car companies to introduce intelligent networking technology including the most advanced autonomous driving technology to China as soon as possible. If they don’t do this, they will be widened by independent brands in China. The brand appeal accumulated in the past will also completely disappear. At the same time, considering that autonomous driving is a technology that needs long-term accumulation, continuous optimization and is closely related to local conditions, it will be unstoppable for Tesla FSD and other foreign car companies to enter China in any dimension.

The introduction of Tesla has accelerated the reshuffle process of domestic electric vehicles and even the whole new energy vehicle market. However, it has also created the global group operational advantage of China brand new energy vehicles. A large number of China-branded cars have gone abroad, attacking cities in overseas markets. With Tesla’s introduction of FSD and Mercedes-Benz’s introduction of Drive Pilot into the domestic market, the competition in the whole market will become more intense, but it may also make the domestic autonomous driving technology leap to a new level. Only in this way, China brand cars will not only be able to stand at home, but also be expected to continue to "roll up" those multinational car groups that are not leading in technology in overseas markets, so as to gain a larger market share for China brand cars in the global auto market.