Tesla's Self-Driving Dreams Hit a Redlight in China

Tesla’s ambition to roll out its so-called “Full Self-Driving” (FSD) software in China has hit a major speed bump, with the EV giant reportedly pausing its free trial of the feature. The move suggests Tesla is struggling to navigate China’s strict regulatory landscape, and it raises serious questions about the viability of its autonomous driving plans.

While Tesla insists that the pause is temporary and pending government approval, reports suggest the software’s performance on Chinese roads has been less than stellar. Early adopters of FSD have been hit with fines for running red lights, making illegal turns, and in an irony not escaping us, driving in bike lanes—hardly the seamless self-driving experience Elon Musk has long promised.

China’s stringent data laws are another headache for Tesla. Unlike in the U.S., where Tesla has largely had free rein over training data, China maintains a tight grip on information related to AI and autonomous driving. The country’s industry ministry now requires regulatory approval for over-the-air software updates tied to self-driving functions. If Tesla were to push an update prematurely, it could be forced to halt sales and production—a stark contrast to the more permissive environment in the U.S.

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ABOVE: Tesla

The timing couldn’t be worse for Tesla. The company’s China-made EV sales dropped 11.5% in January compared to the previous year, while homegrown rival BYD soared past the $100 billion revenue mark. Tesla’s dominance in the world’s largest EV market is under real threat, and without FSD as a selling point, its edge is looking duller by the day.

Meanwhile, back in the U.S., Musk’s cozy ties with the White House have helped ease regulatory burdens, with autonomous car crash reporting requirements expected to be rolled back. Trump himself has even given Tesla a bizarre public endorsement—an unusual move for a company that’s seeing one of its roughest financial years yet.

Tesla still hopes to launch its so-called “Cybercab” autonomous taxi, but with China playing hardball, its global rollout remains uncertain. The dream of fully self-driving Teslas has always been just around the corner, according to Musk. But if China’s regulators hold firm, that corner might be further away than ever.

This adds to the woes as tesla’s stock continues to fall, and stockpiles of unsold cars rises. This week, all Cybertrucks were recalled because steel panels were becoming detached, endangering other motorists. The company is lurching from one disaster to another.

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