Key Moments
- Morgan Stanley says Tesla’s Full Self-Driving (FSD) rollout in China could gain regulatory approval as early as February, although data checks may delay progress.
- The bank highlights Hesai, WeRide, Horizon Robotics, and Desay SV as potential winners across China’s autonomous-driving and ADAS markets.
- Morgan Stanley views China’s approach to FSD as a long-term AI opportunity that could strengthen the country’s autonomous-driving supply chain.
FSD Approval Prospects and Regulatory Landscape
Tesla’s Full Self-Driving rollout in China may receive regulatory approval as early as February, according to Morgan Stanley. If approved, the move could become a major catalyst for China’s autonomous-driving market.
In a research note, analyst Tim Hsiao said Tesla indicated at the World Economic Forum that talks are in the final stages. However, he added that strict data oversight could still slow the process.
Even so, Morgan Stanley believes approval would support the broader advanced driver-assistance supply chain. In particular, it could help speed up approvals for Level 3 autonomous-driving licenses.
Stocks Morgan Stanley Identifies as Key Beneficiaries
Against this backdrop, Morgan Stanley points to four companies it sees as well positioned to benefit from an FSD rollout in China.
| Company | Morgan Stanley View |
|---|---|
| Hesai | Listed as one of the bank’s preferred stocks in China’s autonomous-driving space. |
| WeRide | Also named as a preferred autonomous-driving play in China. |
| Horizon Robotics | Expected to benefit from faster adoption of advanced L2+++ systems. |
| Desay SV | Likewise seen gaining from broader deployment of L2+++ technology. |
Overall, the bank believes these companies could see upside from a friendlier regulatory stance. At the same time, rising use of higher-level driver-assistance systems may further support demand.
Geopolitics, Data Controls, and Policy Conditions
Morgan Stanley also highlights geopolitics as a supportive factor. According to Hsiao, relations between China and the U.S. have improved steadily in recent months.
That said, he cautions that data handling remains a sensitive issue. As a result, local data collection and cloud access will still require careful management.
Implications for Consumer Behavior and AI Ecosystem
Beyond Tesla, the bank expects full-function FSD to influence consumer behavior across China’s auto market. Over time, it could change how drivers view and use autonomous features.
Morgan Stanley compares this potential shift to the earlier impact of China-made Tesla vehicles on electric-vehicle adoption. In a similar way, FSD could lift the entire autonomous-driving ecosystem.
More broadly, the bank describes FSD as a “multi-year AI call option” for China. As such, it could help accelerate development across the country’s wider AI and autonomous-driving supply chain.
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