Wide Full Self-Driving Supervised (FSD) adoption is central to Tesla's growth strategy. Much of the company's $1 trillion valuation hinges on Chief Executive Elon Musk's bet that artificial‑intelligence-driven self‑driving software and robotaxis will become a major revenue stream.

The Netherlands' approval for the technology, which can steer, brake and accelerate a car, follows more than 18 months of tests and analysis by the Dutch vehicle authority RDW.

"Proper use of this driver assistance system makes a positive contribution to road safety," RDW said in a statement on Friday, adding that it would also submit an application for the technology to be used throughout the EU.

Tesla is also counting on self-driving software to boost vehicle sales, which have slowed in Europe due to its aging EV lineup and Musk's far‑right political rhetoric that has alienated some consumers. Tesla's sales in Europe rose in February for the first time in more than a year.

"I expect FSD approval by the Dutch authority and subsequent European regulators will lead to improved sales in Europe over the coming months as consumers are excited to try FSD," said Morningstar analyst Seth Goldstein.

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Tesla shares rose about 0.7 percent in aftermarket trading on Friday. Its shares have fallen 23 percent this year, lagging the United States stock market.

"We're excited to bring FSD Supervised to more European countries soon," Tesla said in a post on social media platform X, adding that it will start rolling out the technology in the Netherlands shortly.

The software is already available as a subscription for US drivers, where it is also facing consumer lawsuits and federal investigations after crashes and reports of traffic violations.

RDW said the EU sets stricter requirements for safety during vehicle approvals than the US. "This means that the FSD Supervised version in the US is NOT comparable to the FSD Supervised version in the EU," it said, without providing further details.

Europe-wide adoption

Tesla is the most popular maker of electric cars in the Netherlands, with around 100,000 Model 3 and Model Ys combined that would be eligible for FSD software.

Many companies are working on self-driving systems. Most use several hardware sensors to track the driving environment, while Tesla relies primarily on cameras and AI.

Other carmakers including Mercedes, Ford, and BMW have introduced 'hands-free' driving technology on select highways and at limited speeds, mostly in Germany. Tesla's is the first that will be usable in a wider range of situations.

RDW said it would now submit the application for authentication within the entire EU to the European Commission. All member states will then vote on the application, which requires a majority within the responsible committee for the system to become valid EU-wide.

If it does not win a majority, individual countries may still decide to allow it. Tesla said last month it was anticipating possible EU-wide approval during the summer.

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