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Tesla’s Full Self Driving Approval in China Sparks Stock Surge
April 29, 2024
Tesla shares shot up over 12% early Monday as CEO Elon Musk got the nod to launch “Full Self Driving” (FSD) tech in China.
Musk’s quick trip to Beijing led to tentative approval from Chinese authorities, relying on Baidu’s mapping license for navigation, according to the Wall Street Journal. Premier Li Qiang was among the officials Musk met, who had previously aided Tesla’s Shanghai facility launch. Although the FSD rollout timing isn’t set, local approval could rejuvenate Tesla in China’s massive auto market amid sales struggles and local competition.
The deal with Baidu reassured Beijing on data privacy, aligning with Tesla’s compliance since 2021 to store Chinese business data in Shanghai. This move was “clearly key to getting the green light from Beijing,” noted Wedbush analyst Dan Ives. Musk is also seeking permission to transfer Chinese fleet data overseas to enhance driving software training.
FSD, Tesla’s cutting-edge semi-autonomous software, is drawing both praise from enthusiasts and scrutiny from U.S. regulators. Musk mandated potential buyers to experience FSD firsthand before purchase. Recent price cuts for FSD in the U.S., along with subscription options, aim to attract more customers.
“This is a key moment for Musk as well as Beijing at a time that Tesla has faced massive domestic EV competition in China along with softer demand. While the long term valuation story at Tesla hinges on FSD and autonomous, a key missing piece in that puzzle is Tesla making FSD available in China which is now a done deal.”
Wedbush analyst Dan Ives via NY Post
Tesla emphasizes FSD’s use alongside an attentive driver, with the NHTSA investigating its role in various crashes. Last year, Tesla issued an over-the-air recall to enhance driver alerts during Autopilot use.
Tesla has recently announced plans to launch more affordable EVs as fast as possible and as one of its top priorities.
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