Tesla launches a one-month free trial of FSD (Full Self-Driving) in China.
Tesla shares fell 4.79%, closing at $238.01.
Wall Street firms downgrade Tesla’s price targets, with JPMorgan cutting its target to $120.
Opinion
Tesla’s competitive position in China is under pressure, as local self-driving technologies advance. The free FSD trial appears to be a customer acquisition strategy, but it raises concerns over profitability and Tesla’s ability to compete with domestic rivals.
Core Sell Point
Tesla’s FSD development in China relies on local partnerships, but its lagging technology and free trial strategy could impact profitability and investor confidence. Investors should monitor competitive dynamics closely before making decisions.
Tesla has announced a one-month free trial of its Full Self-Driving (FSD) software in China. Unlike in the U.S., where FSD requires driver intervention, Tesla aims to launch it as a fully autonomous system in China. However, China’s strict data regulations prevent Tesla from using local driving data for AI training, creating challenges in improving FSD functionality.
To overcome this, Tesla plans to use mapping data from Baidu, a leading Chinese tech firm. Still, concerns persist that Tesla’s FSD may lag behind local competitors such as BYD, XPeng, and Xiaomi. The announcement of free FSD trials has also sparked investor concerns about Tesla’s profitability and competitive edge in China.
Meanwhile, Wall Street analysts have lowered their Tesla price targets.
JPMorgan predicts Q1 deliveries will drop 8% YoY, slashing its price target from $135 → $120—the lowest among major Wall Street banks.
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