Elon Musk said on Thursday that Tesla expects to receive regulatory approval for its Full Self-Driving (FSD) advanced driver assistance system in Europe and China as early as next month, a move that could unlock a new source of revenue as global electric vehicle sales growth slows.
“We hope to get Supervised Full Self-Driving approval in Europe, hopefully next month, and then maybe a similar timing for China,” Musk said during his first appearance at the World Economic Forum annual meeting in Davos.
Approval in the two regions would mark a significant milestone for Tesla, which has been seeking to monetise its FSD software outside the United States. The push comes as declining vehicle sales have increased pressure on the automaker to generate higher-margin revenue from software and services.
Tesla markets FSD as an advanced driver assistance system rather than a fully autonomous product. The system requires drivers to remain attentive and ready to take control at all times, a distinction that has drawn close scrutiny from regulators concerned about safety, liability and consumer understanding of automated driving technologies.
Europe has proven particularly challenging for Tesla. Stricter vehicle safety regulations and a fragmented approval framework across multiple countries have slowed the rollout of FSD compared with the U.S. market. China, while more centralised, also requires extensive local validation and regulatory clearance for advanced driving features.
Musk has increasingly framed Tesla’s long-term growth around self-driving technology and humanoid robots, even as the company continues to derive most of its revenue from vehicle sales. That core business is under pressure from intensifying competition, particularly from Chinese automakers, and from reputational challenges in some markets.
Tesla reported a second consecutive annual decline in vehicle deliveries in 2025 and lost its long-held position as the world’s largest electric vehicle maker to BYD, underscoring the urgency of diversifying its revenue base.
Regulatory approval of FSD in Europe and China would allow Tesla to offer paid subscriptions or upgrades in two of the world’s largest automotive markets, potentially reshaping the company’s earnings mix if adoption proves strong.
