Elon Musk’s recent visit to China, lasting less than 24 hours, has proven fruitful as Tesla gained tentative approval to deploy its Full Self-Driving (FSD) software in its second-largest market.
This crucial development came after Musk’s series of meetings with top Chinese officials in Beijing, including Premier Li Qiang.
The endorsement from China allows Tesla to introduce its advanced driver-assistance services in the country, utilizing mapping and navigation technology provided by Baidu. This partnership not only facilitates the deployment of Tesla’s autonomous driving features but also addresses regulatory concerns regarding data security, reports the WSJ.
Following the news, Tesla’s stock saw a significant jump in Monday morning trading, currently up 17.84% to $198.32 per share; Baidu’s shares also increased by 2.4% in Hong Kong. The collaboration marks a strategic move by Tesla to reignite growth and expand its tech footprint in China.
Analysts from Wedbush Securities described Musk’s visit as a “watershed moment,” highlighting its importance for Tesla’s ongoing efforts to strengthen its presence in the Chinese EV landscape. This approval could enhance Tesla’s competitiveness against local carmakers that are already advancing in driver-assistance technology.
Tesla’s push for wider FSD adoption comes amid a backdrop of challenging financial performance, with the company experiencing its lowest first-quarter profit since 2021. Moreover, Tesla faces new regulatory scrutiny in the U.S., where the National Highway Traffic Safety Administration recently initiated an investigation into its driver-assist systems due to safety concerns.
Musk’s trip also included meetings with Robin Zeng, chairman of Contemporary Amperex Technology, Tesla’s primary battery supplier. These discussions likely covered potential licensing of CATL’s battery technology in the U.S., indicating further collaboration between the companies.
With regulators in the EU and the U.S. cautious about Tesla’s FSD autonomous driving, seeing China approve FSD is another 4D chess move by Musk. U.S. lawmakers likely will not want to see China gain a leap in autonomy while there is flip-flopping back home.