Citi Research commented in a report that Tesla (TSLA.US)      's commercialisation of full-self-driving (FSD) in China is not an important factor affecting long-term global earnings performance. Instead, the broker believed that autonomous taxis (Robo-taxi) would be a bigger driver of future earnings growth potential.

Meanwhile, Tesla's breakthrough in launching FSD in the mainland will largely undermine the potential of XPeng (XPEV.US)      's urban Navigate on Autopilot (NOA). Citi therefore maintained its Sell rating on XPeng.

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Citi pointed out that if Tesla launches FSD in China, it is believed that it will do so in a "black-box" format, without the need to hand over important coding technology, with the mainland team adjusting the user information on a regular basis. This would allow a firewall to prevent leakage of US AI technology, while also eliminating the need to upload mainland users' information outside China, which is in line with the Chinese government's requirements for information protection.

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