The Race for Autonomous Driving: Toyota vs. Tesla in China

Key Takeaways:

• Toyota and Guangzhou Automobile Group plan to release an electric vehicle capable of autonomous driving in China in 2025.
• Tesla recently received tentative approval to launch its Full Self-Driving system in China.
• Toyota’s move follows Tesla’s push into the Chinese market with its autonomous driving technology.

Toyota Motor and its Chinese joint venture partner, Guangzhou Automobile Group (GAC), are gearing up to launch an electric vehicle equipped with advanced autonomous driving capabilities in China by 2025. This move comes hot on the heels of Tesla’s recent approval to introduce its Full Self-Driving (FSD) system in the country.

Toyota’s Autonomous Driving Plans

GAC Toyota has announced that its upcoming Bozhi 3X SUV will be the first model to feature a sophisticated self-driving system capable of navigating highways, city streets, and parking lots. The joint venture is collaborating with Momenta Global, a company known for its work on autonomous driving software for brands like Mercedes-Benz.

In addition to the advanced self-driving technology, GAC Toyota is also working on launching an iron phosphate lithium battery between 2026 and 2027. This new battery technology is expected to significantly reduce the production costs of its bZ4X electric vehicle by up to 40%.

Tesla’s Influence on Toyota’s Strategy

Toyota’s decision to introduce vehicles with autonomous driving capabilities in China closely follows Tesla’s recent approval to roll out its FSD system in the country. Tesla’s FSD system has been a significant revenue stream for the company in the U.S., with users paying a monthly fee for access to the technology.

Expanding into the Chinese market with its FSD system could provide Tesla with a substantial boost in revenue, especially as the company faces concerns about its growth trajectory. Reports suggest that Tesla is aiming to launch its FSD system in China later this year, further intensifying the competition in the autonomous driving space.

It is worth noting that despite its name, Tesla’s FSD system still requires driver attention, and regulatory bodies in the U.S. have initiated investigations into the software following accidents involving Tesla vehicles.

Market Performance

Following these developments, Toyota’s stock saw a modest increase of 0.5% on Friday, closing at $204.97. The company’s shares have gained nearly 12% since the beginning of the year, reflecting investor confidence in its strategic moves in the electric and autonomous vehicle space.

On the other hand, Tesla’s stock remained relatively stable on Friday, closing at $197.88. However, the company has experienced a decline of over 20% in its stock value since the start of 2024, indicating some challenges and market fluctuations impacting its performance.

Conclusion

The race for autonomous driving technology is heating up in China, with both Toyota and Tesla making significant strides in this space. While Toyota is gearing up to launch its electric vehicle with advanced self-driving capabilities, Tesla is expanding its FSD system into the lucrative Chinese market.

As these automotive giants compete for market share and technological dominance, consumers can expect to see more innovative and sophisticated autonomous driving features in vehicles hitting the roads in the near future.

For more updates on the latest developments in the automotive industry, stay tuned to Investopedia.