The Netherlands recently approved Tesla's (TSLA) full self-driving, or FSD, software. Now the question is whether the rest of Europe follows. According to a Reuters report, the Netherlands became the first country in Europe to officially approve Tesla's FSD software, with the Dutch vehicle authority, known as the RDW, signing off on the technology.
More importantly, the regulator has also notified the European Commission of its plans to seek EU-wide approval. Europe is one of Tesla's most important markets, and FSD adoption there has been essentially nonexistent until now.
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www.barchart.com What the Dutch Approval Means for Tesla
The RDW's general manager for type approvals, Bernd van Nieuwenhoven, made it clear that FSD Supervised is driver-assistance software, not a fully autonomous system. The driver remains responsible, but the key distinction is that the software can steer, brake, and accelerate without the driver's hands on the wheel.
Van Nieuwenhoven told Reuters he was confident the technology could operate safely across all Dutch roads, including Amsterdam's notoriously tricky streets, which are shared by cars, bikes, and e-bikes.
"If it is good enough for the Netherlands, it is good enough for Europe," he said, according to Reuters.
The report further stated:
The Netherlands will present its findings to a relevant EU technical committee in May. If a majority of member states sign off and the test evidence holds up, an implementing act could follow, paving the way for EU-wide deployment. Meanwhile, individual EU countries can move on their own, using the Dutch approval as a reference point. That means the rollout could begin gaining momentum in multiple countries even before a formal bloc-wide decision.It's also worth noting that the European version of FSD comes with stricter driver-monitoring requirements than the U.S. version, and any significant software update must be cleared by the RDW in advance. So while the regulatory framework is tighter, the path forward is real.
Why FSD Matters for TSLA Stock
Tesla’s FSD subscriber base hit nearly 1.1 million paid customers globally as of Q4, with about 70% of those being upfront purchases. Notably, Tesla is transitioning to a subscription-only model for FSD going forward.
Europe is a significant untapped market. The Netherlands has around 100,000 Model 3 and Model Y vehicles that would be immediately eligible for FSD, Reuters reported. An EU-wide rollout would put tens of millions of potential subscribers in play.
For context, Tesla's energy and autonomy segments are increasingly driving Wall Street's valuation of the stock. Last year, Bank of America assigned roughly 45% of Tesla's value to robotaxis and 17% to FSD, compared with just 12% to core automotive. The FSD subscriber story directly feeds that framework.
Tesla's European sales have been under pressure due to an aging EV lineup and CEO Elon Musk's political escapades, which have cooled demand in parts of the continent. FSD approval doesn't fix those headwinds overnight, but it could unlock a long-term recurring revenue stream for the EV maker.
What's Next for TSLA Stock?
The EU approval process is not guaranteed. A committee vote, political dynamics among member states, and ongoing safety scrutiny in the U.S., where Tesla faces consumer lawsuits and federal investigations related to FSD incidents, could all slow things down. Alternatively, Musk emphasized that Tesla expects to have fully autonomous vehicles operating in a quarter to a half of the United States by year-end.
Analysts tracking TSLA stock forecast revenue to increase from $102.48 billion in 2026 to $258 billion in 2030. In this period, adjusted earnings are projected to expand from $2.04 per share to $11.37 per share. If TSLA stock is priced at 50x forward earnings, which is below the five-year average of 100x, it could surge over 40% within the next four years.
Out of the 43 analysts covering TSLA stock, 15 recommend “Strong Buy,” two recommend “Moderate Buy,” 17 recommend “Hold,” and nine recommend “Strong Sell.” The average Tesla stock price target is $401.39, above the current price of about $377.
www.barchart.com On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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