Tesla(US:TSLA) Counterpoint Research·2025-03-14 05:18Core Viewpoint - Tesla has launched its Full Self-Driving (FSD) software update in China, introducing the City Navigation Assistance feature after several delays, which allows vehicles to recognize traffic signals and navigate urban roads autonomously [2][3] Group 1: Tesla's FSD Update - The new FSD feature enables Tesla vehicles to perform various maneuvers such as going straight, turning left, turning right, making U-turns, and changing lanes on city roads [2] - The City Navigation Assistance (City NOA) is classified as a Level 2.9 advanced driving assistance system in the Chinese market, indicating its proximity to Level 3 automation, which is not yet legally permitted for passenger vehicles in China [2][3] Group 2: Competitive Landscape - Chinese consumers have already experienced Level 2.9 systems from local brands like Li Auto, Xpeng, and NIO, which have been promoting such capabilities since 2023 [3] - The rapid development of domestic automakers has diminished Tesla's leading position in the Chinese electric vehicle market, but the FSD update has the potential to re-establish Tesla's competitive edge [3] Group 3: Pricing and Market Strategy - Tesla's FSD is priced at RMB 64,000 in China, which is significantly higher than local competitors who often include smart driving features in the vehicle price or offer them for free [4] - For Tesla to replicate its success in the U.S. market, it must adapt its technology and product offerings to better fit the Chinese market and adjust its business model accordingly [4] Group 4: AI and Future Trends - The advancement of autonomous driving reflects broader trends in the AI industry, with Tesla's FSD v12 showcasing the feasibility of end-to-end architecture in smart driving algorithms [8] - Leading Chinese automakers are also focusing on AI technologies, with companies like Huawei and Xiaomi enhancing their strengths in computing power and cloud services, respectively [8]