Grace Tao, Tesla’s Vice-President, told Shanghai-based financial news outlet Cailian on Friday that the facility has sufficient computing power to support the development of assisted-driving features, according to The South China Morning Post. However, she did not disclose details regarding the centre’s size or investment.

The launch marks a significant step toward the commercialisation of Tesla’s Full Self-Driving (FSD) navigation software in mainland China.

“Chinese fans of autonomous driving will benefit from intensified competition between Tesla and its local rivals,” Shanghai-based angel investor Yin Ran told The South China Morning Post.

“As thousands of Level 3 (L3) vehicles are expected to hit China’s roads in 2026, a new battle will emerge as electric vehicle makers race to deliver efficient and affordable self-driving systems,” Yin said.

According to the report, Tesla’s FSD system is powered by neural network technology trained using video footage from real-world driving scenarios. The system enables vehicles to make decisions in a manner similar to human drivers.

Tesla, however, faces regulatory hurdles in China, where it is restricted from transferring data collected from Chinese roads to the United States. At the same time, US regulations limit the company’s ability to train its AI systems within China, creating operational challenges.

In February last year, Tesla introduced its FSD software in mainland China at a price of 64,000 yuan (approximately $9,220), the report added.

Zhang told the newspaper that the new AI centre is expected to enhance Tesla vehicles’ ability to interpret lane markings and traffic signals on Chinese roads.