Elon Musk Departs Beijing as Tesla Wins Key Data Clearance, Nears China Approval for Assisted Driving

Elon Musk, the CEO of Tesla, has departed Beijing after his company secured a vital data security clearance in China. This development brings Tesla closer to government approval for its assisted driving technology in the country, potentially through a partnership with Chinese tech giant Baidu.

During his visit, Musk met with top Chinese officials, including Premier Li Qiang, as he worked to boost Tesla's fortunes in the world's biggest electric car market. On the same day, Tesla's locally produced models were listed among the electric vehicles that meet China's data security requirements, clearing a key regulatory hurdle.

Tesla has reportedly reached an agreement with Baidu to use the company's mapping license for data collection on China's public roads. This deal clears a final regulatory hurdle for Tesla's driver assistance system, known as Full Self-Driving (FSD), to be offered in China. As part of the agreement, Baidu will also provide its lane-level navigation system to Tesla.

Why this matters: The successful clearance of data security standards and the potential Baidu partnership mark significant progress for Tesla in the Chinese market. China is Tesla's second-largest market globally, and the introduction of advanced assisted driving features could help boost the company's sales and competitiveness in the country.

Despite competition from domestic firms, Teslas remain among the best-selling electric vehicles in China. The company is trying to boost sales with features like FSD, which need to comply with China's strict data and privacy laws. The China Association of Automobile Manufacturers stated that 76 models from six companies, including Tesla, meet the compliance requirements for automotive data security.

Tesla has been storing all data collected by its Chinese fleet in Shanghai as required by Chinese regulators and has not transferred any back to the United States. Obtaining approval to transfer data collected in China abroad would be a significant development for accelerating the training of Tesla's autonomous driving algorithms globally, according to Musk.

The improved prospect of FSD entering China comes as Tesla shares have lost almost a third of their value since the start of the year due to concerns about the EV maker's growth trajectory. Musk said Tesla would introduce new cheaper models and a "robotaxi" with self-driving technology to address these concerns.

Chinese Premier Li Qiang praised Tesla's development in China as a successful example of U.S.-China economic and trade cooperation during his meeting with Musk. Tesla has sold over 1.7 million cars in China since entering the market 10 years ago, and the Shanghai factory remains its largest worldwide, despite increasing competition from Chinese automakers.

"The visit is seen as an effort by Musk to address key regulatory and business challenges in the Chinese market, which is crucial for Tesla's global growth," according to a source familiar with the matter. The availability of FSD in China, a key factor in Tesla's long-term valuation, now appears imminent following Musk's diplomatic engagement and the company's recent regulatory progress.

Key Takeaways

• Elon Musk visited Beijing, securing vital data security clearance for Tesla in China.
• Tesla reached a deal with Baidu to use its mapping license for data collection in China.
• This clears the way for Tesla's Full Self-Driving (FSD) technology to be offered in China.
• China is Tesla's second-largest market, and FSD could boost sales and competitiveness.
• Obtaining approval to transfer data collected in China abroad would accelerate Tesla's autonomous driving globally.