Electric vehicle maker Tesla (TSLA) could see the approval for its autonomous driving technology, known as “Full Self-Driving” (FSD), delayed in China due to the escalating U.S.-China trade war, according to a report by the Financial Times. Indeed, Chinese regulators have not provided a clear timeline for approving the license, despite earlier indications that it would be granted in the second quarter of 2025.
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The approval is crucial for Tesla to offer semi-autonomous functionality in its vehicles in China, which would boost subscription revenues and help offset its shrinking sales in the world’s largest automotive market. Tesla’s FSD technology allows vehicles to accelerate, steer, brake, and change lanes on their own but still requires drivers to be alert and have their hands on the wheel. However, Chinese authorities are considering using the approval as a bargaining chip in trade negotiations with the U.S.
This potential delay in approval highlights the level of impact that trade tensions between the U.S. and China have on the firm. It is also worth noting that Elon Musk’s close relationship with President Donald Trump could potentially backfire on the company, particularly in China, as it makes the company a potential target whenever there are political issues. These issues are compounded by the fact that Tesla’s sales in China have been declining due to increasing competition from local players.
Is Tesla a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 12 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After an 84% rally in its share price over the past year, the average TSLA price target of $340.50 per share implies 4.3% downside risk.
