Tesla is facing significant delays in obtaining approval for its Full Self-Driving (FSD) technology in China. The company had initially planned to roll out FSD in China and Europe in the first quarter of 2025, subject to regulatory approval. Chinese authorities have indicated there is no definitive timetable for approving Tesla's autonomous-driving license. The delay in FSD approval could potentially impact Tesla's plans to boost subscription revenues and stabilize its position in the Chinese market, which is crucial for the company's global sales.
Tesla's stock (TSLA) is currently trading at around $351.3, down around 1.25% from its previous close. The company has recently seen positive developments in the Chinese market, which have impacted its stock performance.
The company has started 2025 with strong momentum:
On January 10, 2025, Tesla launched the facelifted Model Y in China.
Within five days of launch, the facelifted Model Y reportedly received over 70,000 orders.
Production of the new Model Y officially began at Gigafactory Shanghai on February 17, 2025.
Deliveries of the facelifted Model Y are expected to start in late February 2025, earlier than initially planned.
This strong demand demonstrates the continued popularity of Tesla's vehicles in the Chinese market. The refreshed Model Y comes with a 5% price increase compared to its predecessor and is expected to begin deliveries in March.
However, Tesla is facing some challenges in China:
Potential delay in autonomous driving approval: Tesla is preparing for a possible delay in obtaining Chinese approval for its autonomous driving technology. This could impact the company's plans for implementing full self-driving capabilities in the Chinese market.
Trade war concerns: Recent tariffs imposed by President Trump on America's largest trading partners have affected Tesla's stock price. The automotive industries of the U.S., Canada, and Mexico are deeply intertwined, and Tesla vehicles, despite being assembled in the U.S., contain parts from Canada and Mexico.
Chinese regulators are reportedly considering using the FSD approval as a bargaining chip in trade negotiations with the Trump administration.Tesla is facing challenges related to data security and compliance:
China doesn't allow Tesla to transfer training video outside the country.
The US government won't permit Tesla to conduct training in China.
Despite these challenges, Tesla's performance in China remains strong. In 2024, the Model Y was the best-selling vehicle in China, with 480,309 units sold.This represents a 5.24% increase from the 456,394 units sold in 2023. The company experienced a strong finish in December 2024, selling 61,881 units, which represents the third-highest monthly sales performance.
The updated Model Y, dubbed "Juniper," is projected to attract even more customers in 2025, having generated considerable pent-up demand due to a year-long wait for the refresh. This positive outlook in the Chinese market could potentially offset some of the current stock price pressures.
Technical Analysis of TSLA
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Tesla's stock (TSLA) is currently showing bearish signals based on recent technical analysis: