The billionaire unexpectedly traveled to Beijing over the weekend, meeting with high-ranking officials and striking a deal with the Chinese search giant Baidu.
The whirlwind visit came just a week after the billionaire decided not to make a planned trip to India to meet Prime Minister Narendra Modi, citing Tesla-related “obligations.”
Instead, Musk with Premier Li Qiang, China’s second-highest-ranking politician, in Beijing to discuss the rollout of Tesla’s Full Self-Driving technology in the world’s biggest auto market. Bloomberg reported that the electric-vehicle maker was expected to get the green light for the tech in China, citing an unnamed source.
Approval of FSD software could help boost Tesla’s sales in China, which have slumped amid steep competition from local rivals and suffered elsewhere from rising anxiety about EVs.
Greg Baker/AFP/Getty Images
The partnership with Baidu revolves around mapping and navigation functions for Tesla’s autonomous-driving software.
Bloomberg reported that Baidu’s lane-level navigation and mapping was likely to let Tesla make its autonomous-driving services available in China.
Such a move could be a much-needed boost for Tesla, which has lost its market leadership in the world’s largest EV market.
Tesla has had difficulty keeping up with a brutal price war against Chinese suppliers. In 2023, it lost its title as the world’s top EV seller to BYD, which is also planning to release its own autonomous-driving technology.
China’s sluggish economy and property-market woes have also dampened consumer demand and made some wary of big-ticket purchases.
Approval for FSD could have a significant impact on Tesla’s revenues, given it charges $8,000 in the US for it or $99 a month for a subscription.
In an interview with Bloomberg TV, the Wedbush analyst Dan Ives said of the deal, “This could open up FSD in China, which I view as unlocking what could be, really, the golden opportunity for them.”
Chinese authorities also said Tesla’s cars made in the country now passed data-security requirements. In 2021 Beijing cracked down on the use of Teslas by state personnel over security concerns posed by the vehicles’ cameras.
Musk’s China visit came amid tough times for Tesla.
The EV maker reported its first decline in quarterly revenue since 2020 in its earnings call last week, missing Wall Street’s already-low expectations. The revenue drop represented the first major decline since the pandemic disrupted vehicle production and deliveries.
Telsa has also been laying off 10% of its workforce, or about 14,000 employees, and has had to recall recently launched Cybertrucks.
Despite the miserable earnings, the company’s stock jumped after the news that Tesla’s long-awaited cheaper EVs were coming soon. Musk didn’t give many specifics on the new vehicles, such as exactly how much they’d cost or when they’d be available, but it was enough to soothe nervous investors.
The stock surge confirms that Musk’s promises still have meaning for many investors. Tesla is set to rise again by close to 10% when trading begins on Monday.
The combined might of China’s car makers is a formidable adversary, but Musk’s visit shows he’s coming out fighting.
Tesla didn’t immediately respond to a request for comment from Business Insider, made outside normal working hours.
