During Elon Musk’s visit, Tesla removes significant regulatory obstacles for self-driving cars in China

On Sunday, Tesla CEO Elon Musk touched down in the Chinese capital, where he was scheduled to talk about the release of Full Self-Driving (FSD) software

Elon Musk’s unexpected visit to China, the US automaker’s second-largest market, went well for Tesla thanks to the removal of many significant regulatory obstacles that had long prevented the company from implementing its self-driving software there.

According to a person with knowledge of the situation, Tesla CEO Elon Musk came in the Chinese capital on Sunday and was scheduled to speak about the release of Full Self-Driving (FSD) software and authorization to send driving data abroad.

Just over a week had passed since the billionaire postponed his scheduled travel to India to meet with Prime Minister Narendra Modi due to “very heavy Tesla obligations.” During his brief stay, he met with Chinese Premier Li Qiang.

Tesla and Baidu have secured an agreement to use the Chinese tech giant’s mapping license for data collecting on China’s public roads, according to two separate sources who spoke with Reuters on Monday. These sources described the arrangement as a crucial step toward the introduction of FSD in the nation.

Furthermore, Tesla’s Model 3 and Model Y vehicles were among those it assessed and determined to be consistent with China’s data security regulations, according to a leading Chinese auto group on Sunday.

Despite consumer demand, the US electric vehicle manufacturer, which launched the most autonomous version of its Autopilot software four years ago, has not yet made FSD available in China, its second-largest market worldwide, due in large part to data security and regulatory concerns.

Since 2021, Chinese authorities have mandated that Tesla store all data gathered by its Chinese fleet in Shanghai; the business is unable to export any of this data back to the United States.

According to the source, Musk is trying to get permission to send data gathered domestically to another country in order to train algorithms for its autonomous driving capabilities.

Musk’s trip to China, which was initially made public by Reuters, was not announced publicly, and the speaker only agreed to remain anonymous since they lacked the proper authorization to interact with the media.

According to the Chinese flight tracking app Flight Manager, Musk’s aircraft took off from Beijing Capital Airport at 05:17 GMT and was bound for Anchorage, Alaska.

A request for comment on Musk’s departure was not immediately answered by Tesla.

Wedbush equity analysts referred to the unexpected visit as “a major moment for Tesla.”

rival By releasing comparable software, Chinese automakers and vendors like XPeng and Huawei Technologies have been attempting to outperform Tesla.

On his Weibo account, retired newspaper critic Hu Xijin said that Tesla was the only foreign-funded carmaker to comply with China’s data compliance regulations. He added that this would allow Tesla vehicles to be driven on Chinese government-owned and agency-owned property.

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“This is not only a breakthrough in China, but also a significant demonstration for the entire world in solving data security issues,” he stated.

On Sunday, Premier Li commended Tesla’s growth in China as an effective illustration of trade and economic cooperation between the United States and China.

China information

Due to security concerns about cameras mounted on the vehicles, Tesla automobiles have been prohibited from entering Chinese military sites for a number of years. Important political gatherings, like the annual summer leadership summit of the ruling Communist Party in 2022, have also turned away its automobiles.

On his Weibo account, He Xiaopeng, the CEO of XPeng, a company whose XNGP Advanced Driver Assistance System is comparable to FSD, expressed his gratitude for Tesla’s introduction of its technology to China.

“Only with the entry of more good products and technologies can the experience of the entire market and customers be improved, and it will allow the market’s development to accelerate in a healthy manner,” he stated.

He uttered the famous words, “Let a hundred flowers bloom,” which were coined by Chairman Mao Zedong, the man who founded modern China.

The increased likelihood of FSD entering China coincides with growing doubts about the EV maker’s development trajectory, which has caused Tesla shares to lose about a third of their value since the beginning of the year. Following the COVID-19 pandemic-related delays in manufacturing and delivery in 2020, Tesla revealed this week that its quarterly sales had decreased for the first time.

Last week, Musk said that Tesla will launch new, less expensive models utilizing its current EV platforms and manufacturing lines. The company will also provide a new self-driving “robotaxi” as well. This month, he said on X that the robotaxi would be unveiled on August 8.

According to industry analysts, China’s complex traffic circumstances, which include a higher number of pedestrians and bicycles than in many other markets, offer more scenarios that are essential for training autonomous driving algorithms more quickly.

“If Musk is able to obtain approval from Beijing to transfer data collected in China abroad this would be a ‘game changer’ around the acceleration of training its algorithms for its autonomous technology globally,” Dan Ives, a Wedbush analyst, said in

In answer to a question on X this month, Musk stated that Tesla might make FSD available to consumers in China “very soon.”

During the brief visit to Beijing, Musk not only met Li but also the person in charge of the ongoing auto exhibition in Beijing. On Monday, a Reuters witness claims that the chairman of the major Chinese battery supplier for Tesla, CATL Robin Zeng, also paid a visit to Musk’s hotel. Reuters was unable to promptly verify with CATL if Zeng had a meeting with Musk.

Musk had planned to use his postponed trip to India to announce $2–$3 billion in new investments, including a car plant, after India promised to decrease import taxes on electric vehicles in exchange for a new policy.