Free FSD Trial in China Fails to Calm Investor Concerns as JPMorgan Slashes Q1 Delivery Forecast
Tesla (TSLA) shares plunged more than 6% on Monday, continuing a steep decline that has seen the EV giant lose hundreds of billions in market value. The stock, down 8% last week alone, has now fallen for eight consecutive weeks, pressured by mounting challenges in key global markets, especially China.
Investor anxiety intensified following Tesla’s announcement of a free trial of its Full-Self Driving (FSD) software in China, one of its most critical regions. The promotion, available from March 17 to April 16, is open to all owners with compatible hardware. However, it failed to stem concerns over Tesla’s broader struggles in China, where stringent data privacy laws hinder its ability to collect and transfer driving data needed for FSD training.
CEO Elon Musk acknowledged the dilemma during Tesla’s Q1 earnings call, citing restrictions from both Chinese and U.S. governments. Tesla has turned to Chinese tech giant Baidu to enhance its mapping data, a notable shift from Tesla’s previous reliance solely on visual input for FSD.
Yet, Tesla’s FSD lags behind domestic rivals like Xpeng and BYD, the latter recently partnering with DeepSeek AI on its “God’s Eye” autonomous system—posing a significant threat to Tesla’s market share.
Compounding these issues are brand challenges in Europe and the U.S., exacerbated by Musk’s controversial political stances and leadership of the White House’s DOGE initiative.
Adding to investor worries, JPMorgan slashed its Q1 delivery forecast by 15%, now expecting 355,000 units, far below consensus. Analyst Ryan Brinkman cited a historic loss in brand value, calling the situation nearly unprecedented in the auto industry. Tesla’s official delivery figures are expected in early April.
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