Tesla launched a pilot project for fully self-driving cars

Shanghai has allowed ten Tesla vehicles to test the most advanced software for autonomous driving.

A successful rollout of its fully self-driving (FSD) software would allow Tesla to better compete with local rivals in China and could turn the world's largest auto market into a battleground for cheaper driver-assistance features, further tightening price war between Tesla and Chinese manufacturers.

Tesla has offered an FSD subscription in China for four years, but with a limited set of features.

In April, the automaker's CEO, Elon Musk, made an unannounced visit to Beijing to discuss the introduction of a fully self-driving system. In May, Reuters reported that Tesla was preparing to register the FSD system with Chinese authorities ahead of a planned rollout this year.

That same month, Chinese state media reported that Tesla had begun construction of a factory in Shanghai to produce Megapack energy storage batteries. At the same time, they welcomed the company's commitment to investing in China.

It is not yet clear when fully self-driving systems could become operational. This pilot project is a good entry point and has a lot going for it. If Tesla and others want to introduce similar systems in Europe, they still have quite a few hurdles to overcome.