The Zhitong Finance App learned that CICC released a research report stating that Tesla will start promoting the latest FSD Beta V12.3 advanced driving assistance system to FSD subscribers and subscribers across the US starting March 16, 2024. This push is the first large-scale push after V12.1 and V12.2 were tested by employees and a small number of users. The bank believes that this promotion means that the commercial launch of the end-to-end smart driving model represented by the FSD V12 is within easy reach. It is recommended to focus on targets: 1) Vehicle: Tesla (TSLA.US), Xiaopeng Automobile-W (09868), etc.; 2) Solution: Desai Seaway (002920.SZ), Huayi Technology (688071.SH), etc.

CICC reviews are as follows:

The world's end-to-end smart driving model was launched for the first time, and the FSD V12 showed excellent characteristics.

Tesla FSD BetaV12 is the industry's first implementation of an end-to-end sensing-planning-control model solution (vehicle control is directly output from sensor data). It drastically reduces regular engineering codes, allows perception information to be used in decision-making and planning as much as possible, and enhances the generalized understanding of the scenario. Users said 1. Compared to the V11, the V12 is more personable, with fewer takeovers, better lane selection, better multi-vehicle gaming, etc.; it also added features such as roadside parking after reaching the end, turning the head at the intersection, etc., to further enhance the automation experience. We believe that Tesla is focusing on developing an end-to-end model, in addition to better performance, another reason is to match the global sales of models; the generalization ability of the end-to-end model can help Tesla reduce the need for local algorithm engineering team building, thereby helping FSD to promote more efficiently on a global scale and obtain corresponding software revenue.

As FSD is advancing outside of North America, it remains to be seen when it will be introduced to China.

Recently, the United Nations Economic Commission for Europe (UNECE) passed Draft Driver Control Assistance System (DCAS) 2. The draft aims to standardize advanced driving assistance technology. We believe it is compatible with FSD systems and is expected to accelerate its introduction in Europe. According to media reports 3, Tesla is pushing ahead with preparations to introduce FSD to China. We recommend that investors pay attention to the preliminary actions introduced by Tesla FSD, that is, to establish a computing power center in China or establish cooperation with cloud server vendors.

Industry and academia promote end-to-end R&D, and the competition may be launched as soon as it is triggered.

Both industry and academia have certain research reserves for end-to-end smart driving, including Xiaopeng, Momenta, Horizon, etc. that have published corresponding research progress. We believe that if the FSD V12 is successfully implemented and has excellent performance, it may be expected to drive a new round of iterative upgrading of smart driving technology to meet the demands of various OEMs to improve performance and expand overseas markets.

Risk warning: Technology development falls short of expectations; FSD promotion falls short of expectations; introduction of smart driving regulations falls short of expectations.