Elon Musk made a surprise trip to China, where he met officials and made a deal with Baidu. The deal gets Tesla closer to adding self-driving features in cars sold in China. Tesla’s sales in China have struggled because of competition and a price war.
Elon Musk’s unexpected visit to China seems to have paid off. The rich guy suddenly went to Beijing last weekend, met with top officials, and made a deal with Chinese search giant Baidu. This quick trip happened just after Musk decided not to go to India as planned to meet Prime Minister Narendra Modi, saying he had to do Tesla stuff.
Instead, he met with Premier Li Qiang in Beijing to talk about putting Tesla’s self-driving tech in the biggest auto market in the world. Some folks told Bloomberg that Tesla might soon get the okay to use the tech in China. Getting approval for FSD software could help Tesla sell more cars in China, where competition is tough, and some people worry about EVs.
The deal with Baidu is about mapping and navigation for Tesla’s self-driving software. Baidu’s mapping and navigation stuff could let Tesla offer self-driving services in China, according to Bloomberg. This move could really help Tesla, which isn’t the top EV seller in China anymore.
Tesla’s had a hard time keeping up with Chinese companies who are slashing prices. It lost the title of world’s top EV seller to BYD, which is also working on its own self-driving tech, in 2023.
China’s economy is slow, and folks aren’t buying big things like cars as much. Getting the okay for FSD could help Tesla make a lot more money because it charges $8,000 for it in the US, or $99 a month if you subscribe. According to CNBC, in an interview with Bloomberg TV, Dan Ives, Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities, said “This could open up FSD in China, which I view as unlocking what really could be the golden opportunity for them.”
Chinese officials also said that Tesla’s cars made in China now meet data security rules. In 2021, Beijing stopped government workers from using Teslas because they were worried about the cameras in the cars.
Musk went to China when Tesla is having a tough time. The company had its first drop in quarterly sales since 2020, which was bad news. Tesla is also letting go of 10% of its workers, about 14,000 people, and had to recall its new Cybertrucks.
Even though sales were down, Tesla’s stock went up because Musk said they’re making a cheaper EV soon. Musk didn’t say much about the new car, like how much it’ll cost or when it’ll be out, but it made investors feel better. The stock going up shows that people still believe in Musk’s promises. Tesla’s stock is expected to go up by almost 10% when trading starts on Monday. Chinese car companies are tough competition, but Musk’s visit shows he’s ready to fight.
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