Tesla Axes Autopilot and Goes Full Send into FSD… But Regulators Hold the Cards

Alexa, play Don’t Stop Believin’...

Tesla (+1.5%) caught a bid after Musk told the room at Davos that Europe and China could approve Full Self-Driving next month. Not “eventually.” Not “on the roadmap.” Literally next month.

At the World Economic Forum, Musk said Tesla is hoping to get Supervised FSD cleared in Europe by next month, with China on a similar timeline. Translation: Tesla finally gets a real shot at monetizing FSD outside the U.S…. which matters a lot when car sales are doing that awkward sideways thing.

And yes, this is still Supervised FSD, meaning drivers stay engaged and regulators aren’t exactly in a trusting mood. But a green light from Europe and China would finally crack open the software revenue door Musk’s been knocking on for years.

And make no mistake about it… Tesla needs software revenue badly.

With Chinese competitors flooding the market and undercutting on price, EV demand has gone ice cold and Tesla has now posted two straight years of delivery declines. The top spot in global EV sales has moved on, and Tesla is no longer holding it. That crown belongs to BYD now.

That’s why Musk keeps dragging the conversation toward autonomy and humanoid robots… because FSD is the last clean shot at fixing the math.

However, there’s been one big problem: adoption has been… mid.

(Source: CNBC)

Tesla launched the FSD beta back in 2020, and expectations were sky-high. But by late 2025, CFO Vaibhav Taneja admitted only 12% of Tesla customers had paid for it. Twelve. Correct me if I’m wrong… but that’s not exactly “software margins save the day” numbers.

That explains why yesterday Tesla announced they’re killing Autopilot as a standalone feature… an obvious shove to push buyers toward FSD subscriptions instead (bold strategy, cotton).

Another thing worth mentioning is that the stakes are very real for Musk personally. One of the key milestones tied to his absolutely unhinged $1 trillion pay package is hitting 10 million active FSD subscriptions by 2035.

Regulators, however, aren’t gonna be giving Elon the benefit of the doubt.

Europe has tougher safety rules and a fragmented approval process, which is why FSD has lagged there compared with the U.S. And globally, Tesla’s driver-assistance tech has been under heavy scrutiny after years of… let’s call it aggressive marketing.

Over the last decade, Tesla often oversold what Autopilot and FSD could actually do. Some drivers believed it and to say bad things followed would be an understatement. According to the National Highway Traffic Safety Administration, hundreds of crashes and at least 13 fatalities have been linked to misuse of the system.

That history is why these approvals matter so much.  If Europe and China sign off (even with guardrails) it signals a shift from “we don’t trust you” to “fine, but don’t mess this up.”

(Source: Reuters)

Remember, Tesla’s whole self-driving journey started after Musk and Google split ways in the early 2010s… and Google’s autonomous project eventually became Waymo, which is now racking up fully driverless miles (in six cities now) while Tesla still insists the future is just one update away. So Elon better get his act together… and fast.

And obviously, Musk saying “next month” should always come with an asterisk the size of Texas.

But if Europe and China really do approve FSD (even in supervised form) Tesla finally gets a real chance to prove whether this decade-long promise can translate into something real.

At the time of publishing this article, Stocks.News holds positions in Tesla and Google as mentioned in the article.