Beijing, China – Tesla stock saw a significant increase on Monday following reports that CEO Elon Musk received approval from Chinese officials to implement the automaker’s Full Self-Driving (FSD) autonomous software in China. The Wall Street Journal first reported that officials tentatively approved FSD during Musk’s visit to Beijing over the weekend.
According to reports from Bloomberg, Tesla will utilize data from Chinese tech company Baidu for FSD, shifting from satellite navigation to street-level mapping. This collaboration with a Chinese company not only aids in regulatory approval but also minimizes data privacy and security concerns.
The approval of FSD in China marks a significant milestone for Tesla, potentially boosting revenue and enhancing its competitive edge against rivals like NIO, Li Auto, XPeng, and tech companies entering the auto market. China’s market saturation and price competition make it crucial for Tesla to remain at the forefront of technological innovation.
The lack of FSD in Tesla’s cars likely impacted sales in China, where consumers prioritize advanced tech features. Tesla’s market share in China dropped to 6.7% in Q4 of 2023 from 10.5% the previous year, despite aggressive price cuts globally.
Obtaining preliminary approval for FSD and securing a data deal with Baidu are key victories for Tesla, signaling future growth and development opportunities. Analysts view Musk’s success in gaining FSD approval in China as a significant moment for Tesla’s long-term trajectory, enhancing the company’s autonomous driving capabilities and potential for a robotaxi future.
Moreover, Tesla’s ability to store data locally in China since 2021 and potentially migrate it to US-based servers will accelerate the training of its autonomous technology worldwide. The promotion of self-driving by the Chinese government further incentivizes FSD adoption in the country, providing Tesla with more data to improve its software.
These recent developments highlight Tesla’s strategic positioning in the global market and underline the company’s commitment to advancing autonomous driving technology. As Tesla continues to innovate and expand its reach, its efforts in China are expected to play a crucial role in shaping the future of the automotive industry.