Tesla, Inc. (TSLA.US) Chinese version of FSD was criticized for being "high price and low configuration", domestic smart driving accelerates overtaking.

American electric car manufacturer Tesla, Inc. (TSLA.US) launched a long-awaited update to its autonomous driving software in China on Tuesday, introducing city navigation features, but the move left Chinese car owners disappointed as they felt it fell far short of Elon Musk's previous promises. Tesla, Inc. announced in its app notification that the new features include automatic lane changes based on speed and route, as well as detecting traffic lights at intersections and deciding whether to turn. In addition, the onboard cameras will also monitor the driver's attention. An insider revealed that these features are similar to Tesla, Inc.'s "Full Self-Driving" (FSD) but are less advanced than the features in the U.S. due to insufficient data training on Chinese roads and traffic rules. FSD is a set of driver assistance technologies developed using artificial intelligence to deal with more complex traffic conditions, while Autopilot is used to handle more routine situations. Reports suggest that this update is being rolled out in batches for official gray testing. The intelligent assisted driving system introduced domestically is currently only at the L2 level and cannot achieve the full autonomous driving function of FSD in the U.S. Additionally, Tesla, Inc.'s official website has changed the description of the previously ordered FSD system from "fully autonomous driving capability" to "FSD intelligent assisted driving functions." Musk had hoped to introduce the complete autonomous driving kit and FSD system in China, but he noted that efforts are facing many challenges due to technical restrictions imposed by the U.S. and Chinese governments. The company has postponed its initial target for the end of 2024 until this year. Many Chinese social media users expressed disappointment with this update as it did not deliver the features that Tesla, Inc. has been promoting for years. They also pointed out that Chinese competitors in the automobile industry are offering similar driving assistance features at lower prices or even for free. One Tesla, Inc. owner in Zhejiang Province who purchased the Long Range Model 3 in 2019 for 56,000 RMB (approximately $7,720) for the FSD software felt very frustrated due to the lack of updates. "We can see that Tesla, Inc. has no choice but to roll out a deliberately limited system..." the owner said. "It is difficult for Tesla, Inc. to catch up with the smart driving capabilities of Chinese cars, especially considering its high pricing." Due to the delayed launch of the FSD system in China, Tesla, Inc. is at a disadvantage in competition with Chinese rivals like Huawei, Xiaomi, and BYD Company Limited. These competitors have launched numerous electric vehicles with advanced smart driving software capable of navigating complex city traffic in China. Tesla, Inc. charges its customers nearly $9,000 for the limited version of the FSD software in its electric vehicles starting from $32,000. In contrast, Xiaomi's SU7 electric sedan starts at $29,700 and has outsold Tesla, Inc.'s Model 3 in China, offering an enhanced smart driving system including city navigation for free. Earlier this month, BYD Company Limited also began offering advanced autonomous driving features for free on most of its models, with some models priced as low as $9,555. Tesla, Inc.'s upgraded version of Autopilot is comparable to the mid-range version of BYD Company Limited's God's Eye system, which uses advanced computing and lidar to generate 3D images of the car's surroundings to assist in navigating around obstacles. This feature is available on its high-end brands Denza and the Dynasty and Ocean series. Musk stated that Tesla, Inc. is seeking approval from Chinese regulators to fully deploy FSD in China, but currently China only requires automakers to register any Level 2 updates with the Ministry of Industry and Information Technology. According to industry standards, both Autopilot and FSD are considered Level 2 autonomous driving technologies, thus requiring human supervision and intervention as needed under Chinese law. Automakers only need to seek approval from regulatory authorities for more advanced Level 3 and above autonomous driving functions. However, Musk hopes to transfer the data collected by Tesla, Inc. vehicles in China overseas, while Chinese data laws restrict such data. This data is used to train autonomous driving systems and will drive Tesla, Inc.'s long-term efforts to produce fully automated vehicles. As part of this effort, Tesla, Inc. also plans to establish a data center in China to train algorithms needed for fully automated driving vehicles. In last month's earnings call, Musk mentioned that due to the U.S. ban on in-person training in China, Tesla, Inc. has been using videos of Chinese streets on the internet to train its AI software.