The provisional approval in China of Tesla's autonomous driving system, known as Full Self-Driving (FSD), marks a significant milestone for the future of autonomous mobility and the robot taxis that Elon Musk envisages. However, it is crucial to distinguish FSD, a driver assistance system requiring active supervision, from true robot taxis. This approval could generate significant additional revenue for Tesla, particularly in China where the company charges $8,000 for the SDF or offers a monthly subscription of $99.

The approval comes after a surprise visit by Elon Musk to China, coinciding with a car show in Beijing. The visit underlines the strategic importance of China for Tesla, despite growing competition, particularly from local rival BYD. To obtain approval, Tesla had to forge key partnerships, notably with Baidu for the integration of maps and navigation.

The SDF approval in China comes against a backdrop of tense relations between the US and China, with Tesla seeking to maintain its position as a premium brand despite increased competition and price cuts. This move may be seen as a strategy by Elon Musk to strengthen Tesla's presence in China and take advantage of opportunities in autonomous driving.

The relationship between Tesla and China has been mutually beneficial, with Tesla becoming the first international car company allowed to operate in China without having to form a local joint venture. The rapid construction of Tesla's Shanghai factory and China's support during the pandemic were crucial to Tesla's expansion. While some US companies are re-evaluating their presence in China, Tesla continues to see growth opportunities in this key market.


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