Tesla clears major regulatory hurdles for self-driving in China during Musk’s visit

Tesla has cleared some key regulatory hurdles that had long stymied launching its self-driving software in China, paving the way for a favorable outcome from Elon Musk’s surprise visit to the U.S. automaker’s second-largest market. Has been expanded.

Tesla CEO Musk arrived in the Chinese capital on Sunday, where he was expected to discuss the rollout of full self-driving (FSD) software and permission to transfer driving data overseas, according to a person with knowledge of the matter.

The billionaire’s whirlwind trip, during which he met Chinese Prime Minister Li Qiang, came just a week after he canceled a planned visit to India to meet Prime Minister Narendra Modi citing “too heavy Tesla obligations.”

On Monday, two separate sources told Reuters that Tesla has struck a deal with Baidu to use the Chinese tech giant’s mapping license for data collection on China’s public roads, which they said could be used to launch FSD in the country. An important step for.

And a top Chinese auto association said Sunday that Tesla’s Model 3 and Y cars were among the models it tested and found to be compliant with China’s data protection requirements.

Data security and compliance have been the key reasons why the US electric vehicle maker, which introduced the most autonomous version of its Autopilot software four years ago, has not yet made FSD available in China, despite customer demand. It is the second largest market.

Chinese regulators had told Tesla to store all data collected by its Chinese fleet in Shanghai from 2021, leaving the company unable to transfer it back to the United States.

The person said Musk wants to get approval to transfer data collected in the country abroad to train algorithms for his autonomous driving technologies.

Musk’s trip to China, which was first reported by Reuters, was not publicly marked and the person spoke on condition of anonymity because they were not authorized to speak to the media.

The plane Musk was on took off from Beijing Capital Airport at 0517 GMT and was headed to Anchorage, Alaska, according to Chinese flight tracking app Flight Manager.

Tesla did not immediately respond to a request for comment on Musk’s departure.

Equity analysts at Wedbush called the surprise trip “a major moment for Tesla.”

Rival Chinese automakers and suppliers like XPeng and Huawei Technologies are trying to gain an edge over Tesla by launching similar software.

Retired newspaper commentator Hu Zijin said on his Weibo account that Tesla is the only foreign-funded automaker to meet China’s data compliance requirements and said this would make it easier for Tesla cars to be owned by government agencies and state-owned firms throughout China. The path to enter the premises will be paved. ,

“This is not only a breakthrough in China, but an important demonstration for the whole world in solving data security issues,” he said.

Premier Li on Sunday hailed Tesla’s development in China as a successful example of US-China economic and trade cooperation.

china data

Tesla cars have been banned from entering Chinese military complexes for years due to security concerns related to the cameras installed on its vehicles. Its cars have also been turned away from sites hosting important political events, such as the ruling Communist Party’s annual summer leadership conference, scheduled for 2022.

XPeng CEO He Xiaopeng, whose XNGP advanced driver assistance system is similar to FSD, said on his Weibo account that he welcomed the entry of Tesla technology into China.

“Only with the entry of more good products and technologies can the entire market and customer experience be improved and this will accelerate the market growth in a healthy way,” he said.

“Let a hundred flowers bloom,” he said, paraphrasing a famous line from Chairman Mao Zedong, the founder of modern China.

The improved prospects of FSD’s entry into China come as Tesla shares have lost nearly a third of their value since the start of the year, as concerns grow about the EV maker’s growth path. Last week, Tesla reported its first decline 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 existing EV platform and production lines and introduce a new “robotaxi” with self-driving technology. He said on X this month that he would unveil the robotaxi on August 8.

According to industry experts, China’s complex traffic conditions, with more pedestrians and cyclists than many other markets, provide more scenarios that are important for training autonomous driving algorithms at faster speeds.

“If Musk is able to get approval from Beijing to transfer data collected in China overseas, it would be a significant boost to the training of its algorithms for its autonomous technology on a global scale,” Wedbush analyst Dan Ives said in a note. Would be a ‘game changer’ to accelerate.”

Musk said this month in response to a question on X that Tesla could make FSD available to customers in China “very soon.”

Apart from meeting Li on a short visit to Beijing, Musk also met the organizer of the ongoing Beijing Auto Show. Robin Zeng, president of Chinese battery giant CATL, a major Tesla battery supplier, also visited Musk’s hotel on Monday, according to a Reuters witness. Reuters could not immediately confirm from CATL whether Zeng met Musk.

Musk was set to announce $2 billion to $3 billion of new investments, including a car plant, on his canceled India visit after India offered lower import taxes on EVs in return for a new policy.

© Thomson Reuters 2024