Shanghai's Nanhui New City district has approved a pilot program allowing 10 Tesla vehicles to test the company's advanced driver assistance system (ADAS) Full Self-Driving (FSD) software.

For FSD to be operational in China, Tesla must first obtain approval from the Ministry of Industry and Information Technology (MIIT), which regulates all automotive software and models sold in the country. Following MIIT approval, Tesla employees, and eventually Chinese users, will be permitted to test FSD on public roads.

Tesla has established a significant local infrastructure in Shanghai, including a data center opened in 2021 to handle all in-country data such as its standard ADAS “Autopilot” and production details, ensuring compliance with China’s strict data sovereignty regulations.

Analyst QuickTake: Tesla CEO Elon Musk has actively engaged with Chinese officials, hinting at a potential upcoming launch of FSD in China and discussions around robotaxi testing, emphasizing the strategic importance of China in Tesla’s global strategy. Earlier this year, Tesla cleared regulatory challenges in China by meeting China's stringent data security standards and partnering with Baidu to use Baidu’s mapping license for data collection, crucial for the launch of FSD in China.