Dutch regulators approved the use of Tesla's self-driving software on highways and city roads, a first for a European electric car maker, and the company hopes other countries in the European Union will take similar action. Widespread adoption of FSD is core to Tesla's growth strategy. The company's $1 trillion valuation rests largely on Chief Executive Elon Musk's bet that artificial intelligence-powered self-driving software and robotaxis will become the company's main revenue streams.
The Dutch approval of the technology, called Full Self-Driving Supervised, follows more than 18 months of testing and analysis by the Dutch Vehicle Directorate (RDW).
"The correct use of this driver assistance system has a positive impact on road safety," RDW said in a statement on Friday.
Tesla is also counting on its self-driving software to boost car sales, which have slowed in Europe as an aging electric vehicle lineup and Musk's far-right political rhetoric alienate some consumers. In February, Tesla's sales in Europe were the first in more than a year.
"I expect the approval of FSD by Dutch authorities and subsequent European regulators will boost Tesla sales in Europe in the coming months as consumers get excited about trying FSD," Morningstar analyst Seth Goldstein said.
Tesla shares rose about 0.7% in after-hours trading on Friday. Tesla shares have fallen 23% this year, lagging behind the U.S. stock market.
"We are excited to introduce FSD Supervised to more European countries soon," Tesla said in a post on social media platform X.
In the United States, Tesla has also faced consumer lawsuits and federal investigations following reports of crashes and traffic violations.
RDW said the EU has stricter safety requirements than the United States during the vehicle approval process. "This means that the U.S. version of FSD supervision is not comparable to the EU version of FSD supervision," RDW said, without providing further details.
The aim is to adopt it across Europe
Tesla is the most popular electric car manufacturer in the Netherlands, with approximately 100,000 Model 3 and Model Y vehicles eligible for FSD software.
Many companies are developing autonomous driving systems. While most companies use multiple hardware sensors to track the driving environment, Tesla relies primarily on cameras and artificial intelligence.
Other carmakers including Mercedes, Ford and <span id=usstock_BMWYY>BMW have rolled out "hands-free" driving technology on some highways at limited speeds, mainly in Germany. Tesla is the first company to use the technology in more situations.
RDW said it will now submit an application for EU-wide certification to the European Commission. All member states will then vote on the application, with a majority in the responsible committee required for the system to come into force across the EU.
If a majority vote is not obtained, individual countries can still decide to allow use. Tesla said last month it expected EU-wide approval could come in the summer.