Tesla: Full Self-Driving Approval in China Supports Our View for Deliveries Growth in 2024

On April 29, Tesla shares rose over 10% at the time of writing. The rally was due to multiple media outlets reporting that Tesla cleared regulatory hurdles in China and was given tentative approval by the Chinese government to begin selling its full self-driving driver-assistance software (FSD). The move should drive Tesla sales higher in China, where the automaker is facing increasing competition with many electric vehicle manufacturers competing on lower prices. Additionally, the ability to sell FSD software in a new market should drive higher adoption rates. In our view, Tesla's FSD is currently a differentiator as we view Tesla as a leader in driver-assistance software. For FSD in China, Tesla will partner with Baidu to use Baidu's mapping and navigation services, which should help accelerate FSD in China.