Author | Xiaoman

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On March 17, Tesla China announced a limited-time free trial of its Full Self-Driving (FSD) intelligent assisted driving feature for one month. This move immediately sparked widespread discussions on social media.

Chinese Tesla owners who had purchased FSD early on were particularly vocal in their reactions. Many paid a substantial sum of 64,000 yuan for the FSD service package but have yet to use it due to hardware support and software iteration issues. Some even considered trading in their cars, but the official depreciation valuation for FSD services is reportedly zero yuan.

The industry's response to Tesla's move has been mixed. Some believe Tesla will continue to drive innovation, pushing domestic new energy vehicle manufacturers to make intelligent driving systems more accessible. Others view it as a desperate measure by Tesla in a fiercely competitive market, where its FSD's visual technology has not yet adapted to China's complex urban road conditions, and the free trial gimmick raises doubts about its effectiveness in boosting sales.

This raises an intriguing question about Tesla's FSD entering China: In the automotive industry in 2025, is intelligent driving, amidst fierce competition, a critical factor influencing consumer decisions? And how should we view the prospects of this feature?

Tesla's FSD Faces Hurdles in China

During Tesla's fourth-quarter 2024 earnings call in early January, facing its first sales decline in a decade, Musk spent considerable time discussing the progress of FSD. Notably, he rarely acknowledged the setbacks Tesla has faced in promoting FSD in China, primarily due to data regulatory restrictions.

On one hand, Tesla's local training data in China cannot be transmitted overseas; on the other hand, the US government does not allow Tesla to conduct FSD training in China.

*Image source: Tesla's official Weibo account

Without local training data, Tesla relies on public videos of Chinese streets (including various short videos) to extract road signs and traffic rules, creating a simulation system (SIM) to train for China's complex traffic conditions. Musk admitted that this simulation-based training makes Tesla's FSD less applicable in China compared to the US, for example, having difficulty understanding bus lane rules in Chinese traffic.

However, just a month after voicing these complaints, Tesla pushed out an OTA update containing the "FSD Intelligent Assisted Driving Feature" to Chinese car owners on February 25, with software version 2024.45.32.12. Simultaneously, the entire intelligent driving system was renamed "Autopilot Automatic Assisted Driving Suite" on the official website.

*Image source: Tesla's official website

Accessing this FSD feature comes with certain thresholds. According to technology media "Geek Park," the "FSD Intelligent Assisted Driving Feature" will prioritize models equipped with Tesla's latest AI4.0 hardware, and car owners need to subscribe to Tesla's FSD feature to use the service. Most older models on the market are equipped with earlier hardware systems and are not included in the first batch of FSD-enabled cars.

When Jingzhe Research Institute called Tesla China's 400 customer hotline on March 19, it was confirmed that the FSD intelligent assisted driving feature is currently only being pushed out to some domestic models compatible with 4.0 hardware. The timing for other vehicles with AI4.0 hardware to receive the update is uncertain, and there is no public push logic or list. Regarding earlier hardware versions, it was clearly stated that FSD currently does not cover models with 3.0 hardware, and future support is uncertain.

With usage thresholds in place, Tesla suddenly announced on March 17 that this feature would be open for free for one month, allowing all car owners with AI4.0 hardware models to experience it. This move may not be seen as a signal that Tesla's FSD has officially entered the Chinese market but rather as an "internal testing plan" to optimize intelligent assisted functions and promote FSD product iterations by incorporating Chinese road data and user habits through small-scale targeted openings. Tesla's FSD's true "ace" may still be forthcoming.

From the Battle of Intelligent Driving Routes to a "New Race"

If one sentence were to summarize the current competitive landscape of intelligent driving technology among major global automakers, it would be "many versus Lu Bu," with "Lu Bu" representing Tesla's FSD.

Tesla's FSD stands out by completely forgoing lidar and adopting a purely visual solution with eight cameras at a low cost to collect data. Combined with self-developed neural networks and massive computing power for continuous training, Tesla has built an entire intelligent driving system. The key to this system is the vast amount of real road data continuously provided by Tesla's over 6 million car owners worldwide.

According to Chebaizhiku's research report "Tesla FSD Development and Impact," Tesla has achieved a phased lead over its competitors in terms of computing power, data, tools, and algorithms.

For example, the report shows that as of 2023, Tesla's cloud computing power reached 35 EFLOPS (hereinafter referred to as E), surpassing Huawei's Vehicle BU (3.3E), NIO (1.4E), Li Auto (1.2E), Geely (0.81E), Great Wall (0.67E), Xpeng (0.6E), and other domestic new energy vehicle brands. Tesla's computing power is more than three times the combined total of the other six.

*Image source: NIO's official Weibo account

With the vast 6 million real vehicle data, Tesla's FSD has achieved a certain level of substitution for human drivers in some areas. As quoted from Liu Yilin, former Senior Director of Autonomous Driving Products at Xpeng Motors, Tesla's FSD is accurate and "as stable as an old dog" in terms of dynamic and static perception capabilities and complex game theory capabilities.

This aligns with the perceptions of many Tesla's older car owners—in challenging maneuvers like narrow road meetings under viaducts and emergency avoidance, Tesla's assisted execution is robust, resembling an "old driver with ten years of experience."

FSD performs better on better roads but struggles with poor road conditions and complex traffic rules. Since the FSD update in late February, many of the first batch of Chinese car owners to try it have complained on social media about issues like autonomous driving changing lanes on solid lines and running red lights.

Specifically, when merging into a solid line lane on a regular road or entering the main road from a ramp, Tesla's FSD cannot recognize road diversion lines or bus lanes. Additionally, it has difficulty recognizing ground signal lights, which are relatively rare, and suspended signal lights distinguishing between left-turn and straight-ahead signals.

Considering Musk's admission that Tesla's FSD only uses publicly available videos of Chinese roads and signs for training simulations, the first batch of Chinese car owners who experienced Tesla's FSD found it more like an "American old driver with ten years of experience" not acclimatized to China.

Compared to Tesla's FSD, domestic new energy vehicle manufacturers represented by Huawei's Vehicle BU and Xpeng Motors generally adopt intelligent driving solutions that integrate lidar and vision cameras, aiming for more robustness in complex road conditions.

Simultaneously, based on the advantage of local data, after the emergence of DeepSeek, various automakers have accessed large models for data training, potentially narrowing the gap with Tesla's self-built neural network model capabilities to a certain extent. The competition among new energy automakers surrounding intelligent driving has shifted from a simple "route battle" to a race focused on localizing functions and adapting to car owners' actual needs.

New Energy 2025: Will the Winner Be Determined by "Intelligent Driving"?

Due to the double decline in share price and sales, Tesla's aggressive promotion of FSD entering China in 2025 is seen as a strong signal that 2025 will be the "first year of intelligent driving." However, considering the initial experience of Chinese car owners with Tesla's FSD and the increasingly competitive domestic new energy vehicle market, one must ask: Will intelligent driving truly become a key factor influencing consumer decisions in the future?

A recent research report by CITIC Securities predicts that the overall scale of the intelligent driving industry will grow from 70.59 billion yuan in 2024 to 105.60 billion yuan in 2025, a year-on-year increase of 49.6%. Simultaneously, the intelligent driving industry chain will usher in the second peak after the market trend from 2021-2022, namely, the "equalization of intelligent driving" promoted by independent automakers after the maturation and cost reduction of mid-to-high-end intelligent driving solutions.

The popularity of intelligent driving is evident from the data recently released by leading new energy manufacturers.

BYD sold 322,800 vehicles in February 2025, an increase of 163.95% year-on-year. Its newly released "Tian Shen Zhi Yan" high-end intelligent driving system covers models priced between 70,000 and 200,000 yuan, breaking the high-price barrier and directly boosting sales in the mid-to-low-end market.

Xpeng Motors sold 30,500 vehicles in February 2025, exceeding 30,000 for the fourth consecutive month. The main model, MONAM03 (intelligent driving version), delivered 15,000 units in a single month, proving that the expansion of intelligent driving functions to the 150,000 yuan market can effectively boost demand.

Huawei Hongmeng Zhixing sold 35,000 vehicles in January this year, with 12,500 units of the Wenjie M9 (high-end intelligent driving version) delivered. The intelligent driving system has become a core selling point for models priced above 300,000 yuan.

Behind these sales figures lies the prevailing market view—due to a significant increase in supply, vehicles with intelligent driving functions are expected to be chosen by more consumers in 2025, potentially profoundly changing consumer perceptions and making intelligent driving functions a "must-have" option for future car purchases.

However, when intelligent assisted driving becomes an industry standard, how should competition among new energy vehicle manufacturers unfold? The first is the coverage of scenarios and the completeness of functions.

*Image source: Xpeng Motors' official Weibo account

The ranking of intelligent driving cars (autonomous driving classification ≤L2) launched, compiled by the First Electric Platform in 2024, roughly divides current intelligent driving capabilities into three tiers. The first tier is led by Huawei Hongmeng Zhixing, Xpeng, NIO, Li Auto, and other enterprises, which have more significant competitive advantages in actual intelligent driving capabilities and coverage.

The second tier includes Xiaomi, Wuling Baojun, Aion Ao Platinum, BYD Denza, and other automakers. They have fewer intelligent driving open areas but already possess full-scenario intelligent driving capabilities of "Highway NOA + City NOA." The third tier consists of other automakers whose driving functions temporarily stay at the "Highway NOA" level.

Although consumers do not use Highway NOA and City NOA with the same frequency in daily life, "having it" when purchasing a car is more likely to influence consumers' final decisions than "whether it is useful or not." From Highway NOA to City NOA and then to full-scenario intelligent driving, continuously enriching the application scenarios of intelligent driving systems and improving product functions and experiences have become key competitive points for new energy automakers in 2025.

The second is price, or rather, the pricing model. Currently, there are three pricing models for intelligent driving functions of domestic new energy vehicles: subscription, outright purchase, and standard configuration (no additional charge).

*Comparison of pricing models for intelligent driving functions of some automotive brands (Chart by Jingzhe Research Institute)

The disparity in pricing models for intelligent driving functions across manufacturers stems from various strategies. Some automakers integrate the development costs of these features into the overall vehicle price, while others fear that adding the cost of intelligent driving functions to the product price may lead to exorbitant pricing and a loss of market competitiveness, thus leaving the decision to the consumer. For many consumers, the need to research whether optional features are worth the cost undoubtedly adds to the complexity of the purchasing decision.

Therefore, as intelligent driving becomes an "industry standard," the challenge for new energy automakers will be to maintain a price advantage while incorporating the additional costs of intelligent driving features. This is bound to be a pressing issue that requires focused attention and innovative solutions.

In conclusion, regardless of whether Tesla's FSD entering China directly impacts the Chinese new energy vehicle market, a competition centered around intelligent driving for future mobility has already commenced. However, the ultimate outcome of this competition will be shaped not solely by technological advancements but also by user experience and the value-for-money ratio inherent in intelligent driving features. The new energy vehicle industry is undeniably hurtling towards a critical phase of full-fledged competition.