Just after Tesla launched its ‘Full Self-Driving’ package, in China, the country announced that it cracking down on automated driving features with new limitations.

In February, Tesla launched a first version of its “Full Self-Driving” FSD package in China for owners with the latest “Hardware 4.0”, or “HW4”, vehicles.

Most of the features under Tesla’s FSD package have been limited to North America due to Tesla training its system for this market first and due to regulatory limitations in other markets.

Shortly after Tesla launched FSD in China, the American automaker had to pause its rollout due to updated requirements from China’s Ministry of Industry and Information Technology (MIIT).

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Now, MIIT has confirmed that it held a meeting with automotive industry stakeholders yesterday, and it has further clarified the rollout of advanced driver assistance (ADAS) features.

CNEV reported on the meeting:

Car companies were asked to refrain from using words like “self-driving,” “autonomous driving,” “smart driving,” “advanced smart driving,” and instead use the term “combined assisted driving” to avoid misleading consumers, according to the minutes of the meeting.

Tesla had already changed the name from ‘Full Self-Driving’ to “Intelligent Assisted Driving” following the launch in China.

Based on a statement from MIIT, the meeting focused on enforcing the previously announced updated requirements that launched right after Tesla introduced FSD in China (translated from Chinese):

The meeting emphasized that automobile manufacturers must deeply understand the requirements of the “Notice”, fully carry out combined driving assistance testing and verification, clarify the system functional boundaries and safety response measures, and must not make exaggerations or false propaganda. They must strictly fulfill their obligation to inform, and truly assume the main responsibility for production consistency and quality safety, and truly improve the safety level of intelligent connected vehicle products.

Regulators want automakers to reduce the frequency of new software updates and instead focus on extended testing before releasing new updates.

The last few months have been quite chaotic for ADAS systems in China. Along with Tesla’s FSD release, several Chinese companies released their systems, including BYD, Xiaomi, and Huawei.

Xiaomi reported a fatal accident in which its ADAS system was active just seconds before the crash, and Tesla owners using FSD racked up thousands of dollars in fines due to FSD making mistakes.

The Tesla Cybertruck is in crisis. The automaker is still sitting on a ton of old inventory, which it is now heavily discounting, and it is throttling down production to try to avoid building up the inventory again.

When launching the production version of the Cybertruck in late 2023, Tesla CEO Elon Musk claimed that the vehicle program would reach 250,000 units a year in 2025:

“I think we’ll end up with roughly a quarter million Cybertrucks a year, but I don’t think we’re going to reach that output rate next year. I think we’ll probably reach it sometime in 2025.”

We are now in 2025, and Tesla is expected to currently be selling the Cybertruck at a rate of about 25,000 units a year – a tenth of what Musk predicted.

Earlier this month, we reported that Tesla began the second quarter with 2,400 Cybertrucks in inventory, valued at over $200 million.

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This is a real problem for Tesla as many of those Cybertrucks are older 2024 model year units not eligible for the federal tax credit, and even some ‘Foundation Series’, which Tesla stopped building in October 2024 – meaning that Tesla is sitting on some 6-month-old trucks in some cases.

Tesla is now offering deeper discounts on the new inventory of Cybertrucks. The discounts can go as high as $10,000, but the average one is closer to $8,000, which is more than the tax credit:

Despite Tesla’s efforts, the automaker has only reduced its Cybertruck inventory by about 100 units since the beginning of the month.

Tesla is now further throttling down production of the Cybertruck at Gigafactory Texas, according to a new report from Business Insider.

According to two Tesla workers speaking with BI, the automaker has reduced its Cybertruck production teams and now operates at a fraction of its original capacity. It also moved some Cybertruck production workers to Model Y production at the plant.

One of the workers said:

“It feels a lot like they’re filtering people out. The parking lot keeps getting emptier.”

As we previously reported, Tesla has been operating all its factories at approximately 60% capacity to avoid building up excessive inventory amid lower demand.

When it comes to the Cybertruck program, it sounds like Tesla is lowering production even further.

Last week, Tesla launched a new version of the Cybertruck in an attempt to boost demand, but it has been poorly received due to the automaker’s removal of many essential features.

Electrek’s Take

There are a lot of other automakers that would have already given up on the Cybertruck ith these results, but not Tesla. Musk is not one to admit defeat easily.

However, Tesla is running out of options.

The new Cybertruck RWD was a desperate attempt, and I doubt it will work. Now, it sounds like Tesla is further throttling down production – virtually confirming that the new trim didn’t help.

The next step would be a complete production pause.

Again, I don’t think Musk wants to admit defeat, but at some point, it’s inevitable.