However, it is unlikely to transform the company's fortunes in the country right away, with Chinese consumers set to be spoiled for choice when it comes to driving assistance software.

Many of Tesla's local rivals are rolling out their own versions of Tesla's Autopilot, which is available in China, and full self-driving technology as competition rages in the country's EV market.

Guangzhou-based EV startup XPeng's City Navigation Guided Pilot (NGP) system, which it first began trialing in 2022, is available throughout China, with plans to expand it internationally also underway.

Like Tesla's full self-driving, NGP can overtake, recognize traffic signals, and conduct lane changes.

Smartphone makers-turned EV builders Huawei and Xiaomi have also been competing to release their own FSD rivals.

Huawei plans to offer its Advanced Driving System, which has capabilities similar to FSD and XPeng's NGP, across several EVs it has developed in partnership with other Chinese auto companies. Xiaomi is incorporating its own version into the SU7, its first EV.

Deliveries for the SU7 began in March, with Xiaomi's driver-assist tech set to be fully available in China by August.

Other companies developing their own autonomous driving features include Nio, whose NOP+ driving assistance software is available in 99% of China's cities, according to CEO William Li.

The reaction from Tesla's rivals to the prospect of FSD being approved has also been bullish.

"Today, many friends asked me what I think about FSD entering China, and I am especially welcoming Tesla FSD to enter China," wrote Xpeng CEO He Xiaopeng on the Chinese social media platform Weibo.

Xiaopeng said it was good regulators had "let a hundred flowers bloom" by allowing rival automated driving systems into China and described Tesla as having "very good self-driving technology and brand."

"If the last 10 years were the decade of new energy, the new decade will be the decade of smart cars," he added.

Not to be outdone, Tesla's biggest rival is also about to join the race to develop smart driving features.

BYD, which briefly overtook Tesla to become the world's largest producer of EVs, announced in January that it would invest 100 billion yuan ($14 billion) in developing new AI-powered features for its vehicles.

The Warren Buffet-backed firm already has its own version of Tesla's "Autopilot" driving assistance feature, "Navigate on Autopilot," available on its Denza N7 EV, and is planning to install the feature to all of its vehicles costing more than $41,000.

Tesla faces brutal competition in China thanks to an explosion of cheap EVs built by local companies like BYD.

The US automaker slashed prices in China earlier this month. Its market share in China shrunk from 10.5% to 6.7% in 2023, according to Bloomberg data.

Tesla did not immediately respond to a request for comment made outside normal working hours.