By Florence Lo and Daniel Leussink
BEIJING (Reuters) – Tesla has overcome some key regulatory hurdles that had long prevented it from rolling out its self-driving software in China, paving the way for a favorable outcome from Elon Musk’s surprise visit to China’s second-largest market. American automobile manufacturer.
Tesla CEO Musk arrived in the Chinese capital on Sunday where he was expected to discuss rolling out Full Self-Driving (FSD) software and allowing driving data to be transferred overseas, according to a person with knowledge of the matter. subject.
Two separate sources told Reuters on Monday that Tesla had reached a deal with Baidu to use the Chinese tech giant’s mapping license for data collection on Chinese public roads, in what they described as a key step for the introduction of FSD in the country.
And a major Chinese auto association said Sunday that the Tesla Model 3 and Y cars were among the models it had tested and found to comply with China’s data security requirements.
Data security and compliance are the main reasons why the US electric vehicle maker, which rolled out the most autonomous version of its Autopilot software four years ago, has yet to make FSD available in China, its second largest market in the world, despite customer demand.
Chinese regulators have required since 2021 that Tesla store all data collected by its Chinese fleet in Shanghai, preventing the company from transferring any back to the United States.
Musk is seeking permission to transfer data collected in the country abroad to train algorithms for his self-driving technologies, the person said.
Musk’s visit to China, first reported by Reuters, was not publicly reported and the person spoke on condition of anonymity because they were not authorized to speak with the media. Tesla did not respond to requests for comment.
Stock analysts at Wedbush called the surprise visit a “major moment for Tesla.”
Rival Chinese automakers and suppliers such as Xpeng and Huawei Technologies have sought to gain an advantage over Tesla by deploying similar software.
Retired newspaper commentator Hu Xijin said on his Weibo account that Tesla was the only foreign-invested automaker to meet China’s data compliance requirements and said this would pave the way for Tesla cars to enter the world. premises owned by government agencies and state-owned enterprises across China. .
“This is not only a major breakthrough for China, but also a significant demonstration for the whole world of solving data security problems,” he said.
Tesla cars have been banned from Chinese military complexes for years due to security concerns related to cameras installed on their vehicles. Its cars have also been turned away from sites hosting important political events, such as the ruling Communist Party’s annual summer conclave to be held in 2022.
CHINA DATA
The improving outlook for FSD’s entry into China comes as Tesla shares have lost nearly a third of their value since the start of the year, as concerns grow over the manufacturer’s growth trajectory of electric vehicles. Last week, Tesla reported its first drop in quarterly revenue since 2020, when the COVID-19 pandemic slowed production and deliveries.
Musk said last week that Tesla would introduce new, cheaper models using its current electric vehicle platforms and production lines and that it would offer a new “robot taxi” with autonomous driving technology. He said on X this month that he would unveil the robotaxi on August 8.
China’s complex traffic conditions, with more pedestrians and cyclists than in many other markets, provide more critical scenarios for training self-driving algorithms more quickly, industry experts say.
“If Musk can get approval from Beijing to transfer data collected in China overseas, it would be a game-changer for accelerating the training of its algorithms for its autonomous technology on a global scale” , Dan Ives, an analyst at Wedbush, said in a note.
Musk said this month that Tesla could make FSD available to customers in China “very soon,” in response to a question about X.
MEETING OF CHINESE PRIME MINISTER
Musk’s trip to China has so far involved a meeting with Chinese Premier Li Qiang, who hailed Tesla’s development in China as a successful example of economic and trade cooperation between the United States and China, and the organizer of the ongoing Beijing auto show.
The chairman of Chinese battery giant CATL, Robin Zeng, a key supplier of Tesla batteries, also visited Musk’s hotel in Beijing on Monday, according to a Reuters witness. Reuters could not immediately confirm with CATL whether Zeng had met with Musk.
Musk’s visit to China, first reported by Reuters, was not publicly reported and the person spoke on condition of anonymity because they were not authorized to speak with the media. Tesla did not respond to requests for comment.
(Reporting by Florence Lo, Daniel Leussink and Liam Mo in Beijing, Zhang Yan in Shanghai; writing by Brenda Goh; editing by Sonali Paul)
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