Tesla partners with Baidu for autonomous driving in China
What's the story
Tesla has successfully overcome significant challenges to introduce its driver-assistance system in China, the world's largest auto market.
This development comes after an unexpected visit to China by Elon Musk, Tesla's CEO.
The company has now formed a strategic partnership with Baidu Inc., a top Chinese technology firm, to improve mapping and navigation capabilities - a key component of its Full-Self Driving (FSD) system.
Data security
Tesla has also met a crucial data security requirement
As one of the approximately 20 suppliers qualified to provide essential modules for self-driving functions, Baidu will supply lane-level navigation and mapping for Tesla's autonomous driving services.
In addition to the partnership with Baidu, Tesla has also met a crucial data security and privacy requirement in China.
This achievement is expected to alleviate some concerns about the company's data security practices.
Diplomatic engagement
Musk met with Premier Li Qiang during his visit
During his visit, Musk met with Premier Li Qiang, a long-time acquaintance from his early days in Shanghai.
Li Qiang had previously assisted Tesla in establishing its top global plant in Shanghai.
Musk expressed his honor at meeting Premier Li Qiang on a social media platform.
This diplomatic engagement is seen as part of Tesla's broader strategy to expand its presence and influence in the Chinese market.
FSD rollout
Musk's primary objective was to discuss full self-driving software
Musk's primary objective during his visit was to discuss the rollout of Full Self-Driving (FSD) software and secure permission to transfer data overseas.
Despite high demand, FSD is not yet available in China, which is Tesla's second-largest market globally.
However, Musk hinted that Chinese customers might have access to FSD "very soon."
Since 2021, Tesla has stored all data collected by its Chinese fleet in Shanghai, complying with Chinese regulations.
Market performance
Tesla has sold over 1.7 million cars in China
Despite competition from Chinese automakers like Xpeng 9868.HK, who are launching similar software, Tesla has sold over 1.7 million cars in China since entering the market 10 years ago.
The Shanghai factory remains Tesla's largest worldwide.
Equity analysts at Wedbush described Musk's visit as "a major moment for Tesla," noting that the availability of FSD in China, a key factor in Tesla's long-term valuation story, now appears imminent.