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Elon Musk recently visited China to boost Tesla’s sales and introduce self-driving technology in its second largest market amidst tough competition.
During his second visit to the country within a year, Elon Musk met with Chinese Premier Li Qiang on Sunday. Li Qiang praised Tesla as a successful example of US-China collaboration.
Musk's purpose for the visit was to seek Beijing's approval for the rollout of Tesla's Full Self-Driving (FSD) software in China, as well as the transfer of its data overseas, as reported by Reuters.
Virtually all Teslas come equipped with a driver-assistance system known as Autopilot. However, for a higher cost, you can upgrade to the more advanced Full Self-Driving (FSD) feature. In China, Autopilot is available, but the full FSD feature is not yet offered due to the need to adhere to the country's data security regulations.
During his recent two-day visit, Musk seemed to have made significant advancements towards achieving his goals, with the trip concluding on Monday.
On Sunday, the China Association of Auto Manufacturers announced that Tesla's Model 3 and Y vehicles have met China's data security standards.
Previously, Tesla's cars were not allowed in certain sensitive areas in China because of worries about spying and data security. Starting in 2021, the company had to store user data locally in China to address concerns about potential spying issues.
Tesla has partnered with Chinese tech giant Baidu (BIDU) to collaborate on mapping and navigation features in preparation for the deployment of the FSD system, as reported by Bloomberg.
CNN has contacted Tesla for more information, while Baidu has chosen not to provide a comment.
Tesla's stock saw a rise of over 6% during pre-market trading on Wall Street. Meanwhile, Baidu's shares ended the day with a 2.4% increase in Hong Kong on Monday. This year, Tesla's shares have experienced a decrease of 32%.
In a competitive market, both companies are making moves that impact their stock performance.
Musk traveled to Beijing during the same time as the Beijing Auto Show, which started last week. The event showcases the newest models from global and Chinese EV manufacturers who are competing to attract consumers in the largest EV market in the world.
SHANGHAI,CHINA - MARCH 29: An aerial view of Tesla Shanghai Gigafactory on March 29, 2021 in Shanghai, China. Tesla Shanghai Gigafactory is reportedly producing vehicles at a rate of about 450,000 cars per year. (Photo by Xiaolu Chu/Getty Images)
Located in Shanghai, China, the Tesla Shanghai Gigafactory is seen in an aerial view on March 29, 2021. It is reported that the factory is able to produce around 450,000 cars per year.(Photo by Xiaolu Chu/Getty Images)
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According to Dan Ives, managing director and senior equity research analyst for Wedbush Securities, this move is a pivotal moment for both Elon Musk and Beijing. The decision comes as Tesla faces stiff competition in the Chinese electric vehicle market and experiences a decrease in demand.
He mentioned that having Full Self-Driving (FSD) available in China has been a crucial component missing for Tesla's autonomous technology. However, there is more to it. If Musk gets permission from Beijing to transfer data gathered in China to other countries, it could significantly speed up the training of its algorithms for autonomous technology worldwide.
"We also think that this trip will be important for Tesla and Musk in expanding their presence in the Chinese market for electric vehicles at a crucial moment," he mentioned.
Musk's visit coincides with US Secretary of State Antony Blinken's recent trip to Beijing, where he met with Chinese President Xi Jinping as both countries work towards improving their relationship.
Deeply integrated
Premier Li was full of praise for Tesla, which vies with China’s BYD for the title of the world’s top seller of battery electric cars.
The Tesla CEO mentioned that the economies of China and the United States are closely connected. He emphasized the mutual benefits that can be derived from each other's development.
During the meeting, Musk commended Tesla's Gigafactory in Shanghai, which was supported by Li when he was the city's party secretary. Musk referred to the factory as the company's most successful one.
Musk expressed his willingness to strengthen cooperation with China and create more mutually beneficial outcomes during his conversation with Li.
During the same day, Musk also had a meeting with Ren Hongbin, the chairman of the China Council for the Promotion of International Trade. This government-supported trade organization extended an invitation for Musk to visit Beijing during his trip.
The CPPIT statement mentioned that they discussed Tesla's future growth in China and the potential for enhancing interactions between American and Chinese businesses.
Musk shared details of his conversation with Li on X and Weibo, where he has a large following of 2.2 million people.
"It was great to see Premier Li Qiang again. We go way back to our early days in Shanghai," Musk mentioned, sharing a photo of their recent meeting featured in Chinese state media.
Their first encounter was in 2018, when Tesla made an agreement with the Shanghai government to establish a factory in the city. At that time, Li held the position of Shanghai's party leader and was known as a promising political figure.
Li supported Tesla by allowing them to own their Shanghai factory independently, unlike other foreign automakers who had to partner with local firms, as reported by Chinese state media.
State media reports and government statements have confirmed that Musk has publicly met with Li at least five times since then.
Editor's P/S:
Elon Musk's recent visit to China underscores the significant role the country plays in Tesla's global strategy. His meetings with high-ranking officials, including Premier Li Qiang, highlight the company's efforts to gain approval for its advanced Full Self-Driving (FSD) software and data transfer. The approval of FSD in China would be a major milestone for Tesla, as it would allow the company to offer its most advanced autonomous driving technology in its second largest market.
Musk's visit also coincides with increased competition in the Chinese electric vehicle market, with domestic manufacturers like BYD emerging as formidable rivals. Tesla's recent price cuts in China and other key markets are a reflection of this competitive landscape. However, the company's long-term success in China will depend on its ability to continue innovating and adapting to the evolving needs of Chinese consumers.
