(Bloomberg) — Elon Musk's quick trip to China yielded immediate results, as Tesla Inc. cleared two key hurdles to bring driver-assistance systems to the world's largest car market.
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The U.S. automaker plans to partner with Chinese tech giant Baidu Inc. on mapping and navigation capabilities and introduce what the company calls “fully autonomous driving,” or FSD, people familiar with the matter said. Tesla has also passed important data security and privacy requirements in China, which should help ease some of the concerns about bringing FSD to market.
Baidu shares rose as much as 7% in Hong Kong trading.
The move came after Tesla CEO Elon Musk made an unannounced visit to China on Sunday seeking approval for driver-assistance software that could help stem the automaker's decline in revenue. The set of features requires continuous monitoring and doesn't automate Tesla, but the company charges him $8,000 to buy his FSD outright in the U.S., or $99 per month for a subscription. .
Read more: Musk makes surprise visit to China to boost Tesla's revenue
The Wall Street Journal reported on Monday, citing people familiar with the matter, that Chinese officials have told Tesla that the Chinese government has given preliminary approval to the company's plans to introduce FSD capabilities in the country.
Musk met with Prime Minister Li Qiang on Sunday. As Secretary of the Communist Party of China in Shanghai, Premier Li Qiang helped the company establish what is now a world-class factory. His private jet departed from Beijing on Monday, according to Flight Radar 24.
Tesla initially received a red-carpet welcome in China, but its fortunes have been in decline recently as it faces increasing competition from domestic EV makers such as BYD and Lee Auto. came out. Tesla's share of the Chinese car market shrank to about 6.7% in the fourth quarter. Growth in the first quarter of 2023 will rise from 10.5% in the first quarter of last year, according to Bloomberg calculations based on data from the China Passenger Vehicle Association.
Advanced driver assistance systems are becoming increasingly common in China, with many local companies including Xpeng Inc. and Xiaomi Corp. using these features as selling points for their vehicles.
Approval of FSD in China would be a major boost for Tesla, which has seen its quarterly sales decline year over year for the first time since 2020. Despite lowering prices, the company's car sales declined in the first quarter. Musk aims to cut headcount by at least 10% and accelerate development of new models, including cheaper vehicles, that could be completed by early 2025, if not by the end of the year.
Dan Ives, a senior analyst at Wedbush Securities, said in an interview with Bloomberg Television that Musk's surprise visit to China is a “turning point.” “I see this as potentially opening the door for FSD in China, and it unlocks what could just be a great opportunity for them.”
By partnering with Baidu, one of approximately 20 certified suppliers with top domestic map certification qualifications applicable to driver assistance features, Tesla will provide the Chinese company's lane-level navigation and mapping services. becomes available. Tesla has been using Baidu for its in-vehicle mapping and navigation apps since 2020.
Getting the green light for FSD in China could help Tesla regain some lost ground, but the system has proven problematic in the United States. Top U.S. auto safety regulators have just launched an investigation into the company's underpowered Autopilot system, citing 20 crashes since December involving vehicles that received over-the-air software updates. is.
At last week's earnings conference, Musk emphasized the importance of self-driving development and said anyone who doubts Tesla's ability to “solve” self-driving should not invest in the company.
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