Elon Musk's short visit to China immediately paid dividends: Tesla has overcome two key obstacles to the introduction of its driver assistance system in the world's largest automotive market, Bloomberg reports, citing a sources, UNN writes.
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According to people familiar with the matter, the American automaker will work with Chinese tech giant Baidu on mapping and navigation features to deploy what it calls Full-Self Driving, or FSD. Tesla has also approved key security and data privacy requirements in China, which will help ease some concerns about the introduction of FSD to the market, the publication writes.
The moves, as noted, came after Tesla CEO Elon Musk made an unannounced trip to China on Sunday to seek approval for driver assistance software that could help stem the automaker's falling revenues. Although the feature set requires constant monitoring and does not make Tesla autonomous, the company charges $8,000 in the US for a direct purchase of FSD or $99 per month for a subscription, the publication points out.
On Monday, the Wall Street Journal reported that Chinese officials told Tesla that Beijing had preliminarily approved the company's plan to launch FSD in the country, citing people familiar with the matter.
On Sunday, Musk met with Premier Li Qiang, who as secretary of the Communist Party of China in Shanghai helped the company build what is now its best factory in the world. According to FlightRadar24, his private jet took off from Beijing on Monday.
"Tesla initially enjoyed a red-carpet reception in China, but its successes have faded recently as it has faced stiffer competition from domestic electric vehicle manufacturers such as BYD and Li Auto," the publication says.
Tesla's share of the Chinese automotive market fell to about 6.7% in the fourth quarter of last year. According to Bloomberg's calculations based on data from the China Automobile Association, this figure will increase from 10.5% in the first quarter.
Advanced driver assistance systems are becoming increasingly common in China, and many local players, including Xpeng and Xiaomi, are said to be using such features as an argument in favor of car sales.
The publication writes that the approval of FSD in China will be a major boost for Tesla, which is experiencing a year-on-year decline in quarterly revenue for the first time since 2020. Even after lower prices, the company sold fewer cars in the first quarter. Musk is reducing the number of employees by at least 10% and is seeking to accelerate the release of new models, including less expensive ones, which could be ready by early 2025, if not by the end of the year.
Tesla звільнить понад 10% працівників на тлі падіння продажів15.04.24, 15:23
Musk's unexpected visit to China is a "tipping point," Wedbush Securities senior analyst Dan Ives said in an interview with Bloomberg Television. "This could open up FSD in China, which I see as the opening of what could really be a golden opportunity for them," he said.
The collaboration with Baidu, one of approximately 20 qualified suppliers with top-level mapping credentials in the country that can be applied to driver assistance functions, will allow Tesla to take advantage of the Chinese company's lane-level navigation and mapping services. Tesla has been using Baidu for in-car mapping and navigation programs since 2020.
While getting the green light for FSD in China could help Tesla regain some of its lost ground, the system has been noted to be problematic in the United States. The main U.S. automotive safety regulator recently launched an investigation into the company's less functional autopilot system, citing 20 accidents since December involving vehicles that had received the software update.
Last week, during a financial results call, Musk emphasized the importance of developing autonomous driving, saying that people who doubt Tesla's ability to "solve" the autonomy issue should not invest in the company.