After Elon Musk made a surprise visit to China on Sunday, Tesla $TSLA has reportedly overcome a major hurdle in its goal to introduce its driver assistance technology in the world’s largest auto market.
Chinese authorities tentatively approved Tesla’s plan to launch its Full Self-Driving technology in the country
After Elon Musk made a surprise visit to China on Sunday, Tesla $TSLA has reportedly overcome a major hurdle in its goal to introduce its driver assistance technology in the world’s largest auto market.
Chinese authorities on Sunday tentatively approved Austin, Texas-based Tesla’s plan to launch its Full Self-Driving (FSD) technology in the country, according to multiple media reports. The rollout hinges on a newly-signed agreement with Chinese technology giant Baidu and Tesla’s efforts to meet requirements for how it handles data security and privacy issues.
Tesla will deploy FSD using Baidu’s navigation and mapping services, building on an existing partnership that’s been on the books since 2020. Baidu is one of less than two dozen qualified suppliers with China’s top-level mapping credentials that are applicable to driver assistance programs, such as FSD.
Tesla stock jumped 11.5% in Monday morning trading. The stock has been in flux over the past few weeks after Tesla laid off as many as 20,000 workers, settled a lawsuit over its Autopilot system, reported dismal earnings, and watched as three executives announced their resignations.
The driver assistance technology has been available in China for about four years, albeit with restricted features that limit its capabilities due to concerns over data security issues. Musk is looking to obtain approval to transfer data collected in China abroad to train its algorithms for self-driving vehicles, Reuters reports. Since 2021, Tesla has stored all data collected by its Chinese fleet of electric vehicles in the country, as required by local regulators.
The government-backed China Association of Automobile Manufacturers said Sunday that Tesla’s Model 3 and Model Y were compliant with China’s data-security requirements.
Wedbush analyst Dan Ives, a longtime Tesla bull, on Sunday called Musk’s visit to China — and his meeting with Chinese Premier Li Qiang — a “watershed” moment, noting that Tesla is grappling with softening demand and intense domestic competition in China’s EV market.
“If Musk is able to obtain approval from Beijing to transfer data collected in China abroad this would be a ‘game changer’ around the acceleration of training its algorithms for its autonomous technology globally,” Ives wrote in a note to investors.
After reporting poor sales last quarter, Tesla last week slashed prices on some of its models around the world, including in China.
The push to sell FSD comes as Tesla’s technology faces a new wave of scrutiny in the United States. Federal regulators on Friday said they would investigate the company’s recall of more than 2 million electric vehicles over issues with Autopilot.
The National Highway Traffic Safety Administration (NHTSA) also closed its almost three-year investigation into Autopilot. It determined that “foreseeable driver misuse of the system played an apparent role” in at least 13 crashes that involved the technology and led to serious injuries, and at least one death.
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