Could Tesla’s FSD Finally Become a Reality in Korea? The Future of Autonomous Driving and Prospects for Domestic Adoption

Whenever the topic of Tesla’s Full Self-Driving (FSD) feature comes up, it evokes mixed feelings among Korean owners. Despite paying several million won extra to purchase it, the feature was almost unusable. However, with the rapid advancement of global autonomous driving technology and signs of change in the domestic regulatory environment, it seems that the day is approaching when the true value of FSD can be experienced in Korea.

Currently, Tesla’s FSD beta program is only operational in North America, with approximately 1.6 million users participating. In its Q4 2023 earnings report, Tesla announced that the intervention frequency of the FSD beta had improved fivefold compared to the previous year, meaning the number of interventions per 10,000 miles decreased from 200 to 40. While still far from full autonomy, the pace of technological progress is clearly accelerating.

So why couldn’t FSD be fully utilized in Korea? The most fundamental reason is the difference in regulatory environments. In the United States, both federal and state governments adopt a relatively flexible approach to testing autonomous driving technologies. California has allowed autonomous vehicle testing since 2012, with over 60 companies currently holding test licenses. In contrast, Korea has much stricter safety standards for autonomous driving technology, and Level 3 or higher autonomous driving features are not yet permitted on public roads.

There are also technical differences. Tesla’s FSD was developed optimized for North American road environments. Applying an AI model trained in a completely different environment, including road signs, traffic lights, traffic rules, and even driving culture, to Korea has its limitations. For example, Korea’s complex intersection structures, narrow alleys, and unique parking culture present challenges that a system trained on North American data finds difficult to handle.

Current and Future Prospects of the Autonomous Driving Market

The global autonomous vehicle market is rapidly growing. According to a recent report by McKinsey & Company, the market size for autonomous driving technology is expected to reach $400 billion by 2030. Of this, the passenger car segment is projected to account for about $300 billion, and the commercial vehicle segment $100 billion. Particularly, the Asia-Pacific region is emerging as the fastest-growing market, with an average annual growth rate of 28.5%.

Not only Tesla but other major companies are also investing heavily in the development of autonomous driving technology. Google’s Waymo has received a total of $5.6 billion in investments by 2023 and is currently operating fully driverless taxi services in Phoenix, San Francisco, and Los Angeles. Waymo’s autonomous taxis provide approximately 100,000 paid rides per week, and this figure is expected to exceed 1 million by 2024.

China’s Baidu is also commercializing autonomous driving technology through its Apollo project. As of the end of 2023, it is operating autonomous taxi services in 10 cities, including Beijing, Shanghai, and Shenzhen, with cumulative driving distances exceeding 50 million kilometers. Baidu announced plans to expand its services to 100 cities by 2025.

Despite this growth, full commercialization of autonomous driving technology still requires time. According to an analysis by the Boston Consulting Group, Level 4 autonomous driving (full autonomy under specific conditions) is expected to become commonplace around 2030, while Level 5 (full autonomy under all conditions) is projected to be possible only after 2035.

Changes and Future Prospects in the Korean Market

Fortunately, Korea’s regulatory environment related to autonomous driving is gradually changing. The Ministry of Land, Infrastructure, and Transport announced a roadmap to support the commercialization of autonomous vehicles by 2024, aiming for Level 4 autonomous vehicle commercialization by 2027. To achieve this, it is expanding policy support by easing safety standards for autonomous vehicles and simplifying temporary operation permit procedures.

Currently, companies like Hyundai Motor, Naver Labs, and Kakao Mobility are actively developing autonomous driving technology in Korea. Hyundai Motor plans to apply Level 3 autonomous driving features to mass-produced cars by 2025 and is investing approximately 1.2 trillion won, or about 15% of its R&D budget as of 2023, in the autonomous driving sector. Naver Labs is piloting an autonomous shuttle service in the Pangyo area and plans to expand the service area in 2024.

Tesla also appears to be making efforts to introduce FSD in the Korean market. Elon Musk mentioned on X (formerly Twitter) in 2023 that “launching FSD in the Asian market is a priority,” and Tesla Korea is reportedly continuing discussions with domestic regulatory authorities. Industry experts anticipate that by the second half of 2025, or at the latest by 2026, FSD features may be available in Korea, albeit in a limited capacity.

However, even if FSD is introduced in Korea, it may be challenging to expect the same level of performance as in North America. Considering Korea’s complex road environment and traffic conditions, it is likely that initial use will be limited to highways or certain arterial roads. Tesla will need considerable time to collect and learn from Korean road data and develop localized AI models in the process.

The economic impact is also expected to be significant. According to an analysis by the Korea Automobile Manufacturers Association, the domestic economic effect of autonomous vehicle commercialization is estimated to reach 47 trillion won annually. This figure includes social cost savings from reduced traffic accidents (18 trillion won annually), improved logistics efficiency (15 trillion won annually), and the creation of new services (14 trillion won annually).

While there has been disappointment among Korean Tesla owners who purchased FSD but could not fully utilize it, the situation seems poised to change. With technological advancements and changes in the regulatory environment aligning, the era of experiencing true autonomous driving in Korea is finally approaching. Although full autonomy still requires more time, it seems clear that the first steps are not far off. Personally, I expect that by around 2025, we will see a day when we can drive hands-free, at least on highways.

This article was written by adding personal opinions and analysis after reading the Untitled article.

Disclaimer: This blog is not a news outlet, and the content written reflects the author’s personal views. The responsibility for investment decisions lies with the investor, and no responsibility is taken for investment losses based on the content of this article.