Key Points
Obtaining approval to sell its Full Self-Driving (Supervised) software in Europe is one of the key catalysts for Tesla (NASDAQ: TSLA) stock in 2026. Not only are FSD (Supervised) and other software services becoming an important revenue generator for the company, but the demonstration of FSD (Supervised) is a key precursor of the potential approval of robotaxis using unsupervised FSD in the future. And the good news is that Tesla doesn’t need European Union-wide approval to do it.
Tesla obtains approval in Europe
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- The E.U. does not encompass the whole of Europe. Many countries, such as the U.K. and Switzerland, are not in the E.U.
- There are two pathways for Tesla to obtain approvals in the E.U. (1) an E.U.-wide approval through its Technical Committee on Motor Vehicles (TCMV) and (2) on a country-by-country basis using Article 39 of E.U. Regulation 2018/858.
- E.U. approvals work differently from those in the U.S., and from one perspective, this may make it easier for Tesla to obtain approvals.
Tesla’s European FSD approval process
Earlier this year, the Netherlands, via its Vehicle Authority (RDW), became the first E.U. country to approve Tesla’s FSD (Supervised) after more than 18 months of testing on its tracks and public roads. The approval applies only to the Netherlands.
As noted by the RDW, an E.U.-wide approval process involves submitting an application that would be reviewed by the TCMV and then voted on by member states. The voting process requires at least 15 of the 27 E.U. member states to vote in favor, and those voting in favor must represent 65% of the E.U.’s population.
The RDW in early May presented to the full E.U. seeking to expand FSD (Supervised) approval to all of the E.U.’s 27 countries. Reuters has reported the earliest E.U. vote on the matter could come in July. There have been no public statements from the auto regulators in the E.U.’s big four countries (Germany, France, Italy, and Spain). Still, it looks likely they will wait for the E.U.-wide vote before pursuing the Article 39 route
Image source: Tesla.
The other route
Article 39 of E.U. regulation 2018/858 says that a car manufacturer can apply for E.U. type-approval if it incorporates new technology, and states “the approval authority may grant a provisional E.U. type-approval, valid only in the territory of the Member State.” This is how the Netherlands approved Tesla’s FSD (Supervised).
However, the rules also say any E.U. country could approve Tesla’s FSD (Supervised) based on the Netherlands’ approval, even if the E.U.-wide vote is “no.” As such, Tesla does not need the E.U.-wide vote to receive individual country approvals in the E.U.
Since the individual countries can simply rely on the Netherlands’ data and approval without doing their own review, this could speed up approval in more countries even if the full E.U. does not OK the technology’s use on its roads.
While European approvals will take time, I’m optimistic Tesla will achieve them.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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