Shares in Tesla experienced a remarkable surge following reports of a collaboration between CEO Elon Musk’s company and Chinese tech giant Baidu for mapping and navigation features to bolster autonomous driving technology in China, the world’s largest auto market.
In premarket US trading, Tesla shares soared nearly 14%, while Baidu witnessed a more than 5.5% jump in Hong Kong trading.
According to sources familiar with the matter cited by Reuters, Baidu, China’s leading internet search company, has agreed to grant Tesla access to its mapping license for data collection on China’s public roads. This move is seen as a significant step in clearing regulatory hurdles for the rollout of Tesla’s Full Self Driving (FSD) technology, the latest iteration of its Autopilot system.
Elon Musk’s recent visit to China, where he held discussions with Prime Minister Li Qiang, fueled speculation about approval for the FSD software rollout in China and permission to transfer data overseas. Reports suggest that Chinese officials have tentatively approved Tesla’s driver-assistance service in the country, with the company meeting requirements related to data security and privacy issues.
Under Chinese regulations, automakers must obtain a mapping qualification to operate autonomous driving systems on public roads, often necessitating cooperation with local tech firms. The partnership with Baidu is expected to enable Tesla to legally operate its software in China while collecting crucial data about road conditions, traffic signs, and surrounding structures.
This development marks a significant milestone for Tesla, as regulatory hurdles had previously prevented the availability of its FSD technology in China. The approval for this technology is anticipated to have a substantial impact on Tesla’s financial performance, particularly amidst its recent year-on-year decline in quarterly revenue and staff reduction efforts aimed at cost-saving measures and increased productivity.
Wedbush Securities senior analyst Dan Ives described Musk’s visit to China as “a watershed moment,” suggesting that it could pave the way for unlocking the “golden opportunity” represented by FSD in China, potentially transforming Tesla’s prospects in the market.
