Morgan Stanley analyst Tim Hsiao identifies four stocks poised to gain from Tesla's planned Full Self-Driving rollout in China, which could receive regulatory approval as early as February. The bank argues this approval would significantly boost the country's autonomous driving supply chain and accelerate Level 3 license approvals for competitors.

The recommendation favors WeRide and Horizon Robotics as top picks in China's AD space, alongside Desay SV. Hsiao notes improving Sino-US relations create favorable conditions for a green light, though stringent data scrutiny may cause delays. He views the technology as a 'multi-year AI call option' for China's broader AI sector.

Investors should watch for final regulatory sign-off and how Tesla's entry reshapes the competitive landscape. Success could spur consumer adoption, mirroring how Tesla's earlier EV push catalyzed China's electric vehicle market. The move represents a major test of cross-border tech integration amid ongoing geopolitical tensions.