Published by Global Banking & Finance Review®
Posted on January 22, 2026
4 min readLast updated: January 23, 2026
Add as preferred source on GoogleElon Musk anticipates Tesla's FSD system to gain approval in Europe and China by next month, marking a key regulatory milestone.
By Akash Sriram
Jan 22 (Reuters) - Tesla is likely to win regulatory approval in Europe and China for its driver-supervised Full Self-Driving (FSD) system as early as next month, CEO Elon Musk said on Thursday, as the electric automaker looks to boost software revenue amid slowing vehicle sales.
While regulatory progress on FSD and early robotaxi deployments point to momentum in Tesla's AI ambitions, the technology remains nascent relative to a valuation that far outstrips those of many technology and automotive companies.
"We hope to get Supervised Full Self-Driving approval in Europe, hopefully next month, and then maybe a similar timing for China," Musk said at his first appearance at the World Economic Forum in Davos.
Tesla has been seeking approval for the system in Europe, where tougher vehicle safety rules and a fragmented regulatory framework have slowed deployment compared with the U.S.
Dutch vehicle authority RDW said in November it expected to decide on FSD in February. Tesla had said once it secures approval in the Netherlands, other EU countries can recognize the exemption and allow a rollout ahead of a formal EU approval.
In China, the smart features similar to FSD remain restricted to a limited number of vehicles as the U.S. automaker had to halt the software update deliveries last March, citing the need for additional regulatory approval.
Tesla made a long-awaited update to its autopilot software in China last February. But some owners expressed disappointment that the system for which they paid more than $9,000 came with operational restrictions.
FSD is classified as an advanced driver assistance feature that requires drivers to remain attentive, and regulators have scrutinized it amid concerns over the safety and oversight of automated driving technologies.
ROBOTAXI UPDATE BOOSTS SHARES
Separately, Musk said Tesla has started robotaxi rides in Austin, Texas, without safety monitors. The service started in June with a Tesla employee in the front passenger seat overseeing the car's behavior.
Shares of the automaker closed 4.2% higher on Thursday after social media posts about the driverless robotaxi rides circulated. Tesla operates a ride-hailing service in California and has received permits to test and deploy its robotaxis in Texas, Arizona and Nevada.
While the deployment in Austin without safety monitors represents progress, Tesla's robotaxi ambitions remain well short of earlier targets to operate in several major U.S. cities, highlighting the regulatory and safety hurdles that hinder rapid rollouts.
Registration of Tesla's vehicles fell 11.4% in California last year, with its market share of new cars in the U.S. state slipping below 10%, according to a report by the California New Car Dealers Association.
The company reported a second consecutive drop in vehicle deliveries in 2025, ceding its position as the largest electric vehicle maker in the world to China's BYD.
HUMANOID ROBOT AMBITIONS
Musk has repeatedly said much of the artificial intelligence developed for autonomous vehicles will also underpin Tesla's planned humanoid robots. Musk said on Thursday that he expects robots to outnumber humans.
He said on Thursday that Tesla expects to sell its Optimus humanoid robots to the public by the end of next year, later than the timeline he had previously outlined.
Industry experts and executives have said scaling humanoid robots for real-world use is technically complex, in part because of a lack of data needed to train the AI models that underpin robot behavior.
"For Optimus, what they (the market) need is credible evidence of scalable manufacturing, a regulatory path, and unit economics if possible," said Ken Mahoney, CEO of Mahoney Asset Management, a Tesla shareholder.
(Reporting by Akash Sriram in Bengaluru; Additional reporting by Zhang Yan in Shanghai; Editing by Arun Koyyur and Jamie Freed)
Full Self-Driving (FSD) is an advanced driver assistance system developed by Tesla that enables vehicles to navigate and drive autonomously under certain conditions.
Autonomous technology refers to systems and devices capable of performing tasks without human intervention, often using artificial intelligence and machine learning to make decisions.
Tesla's FSD approval in Europe would represent a major regulatory milestone, allowing the company to expand the use of its autonomous driving technology across the continent.
The approval of FSD technology in China could enhance Tesla's market presence and competitiveness, potentially leading to increased adoption of autonomous vehicles in the region.
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