Tesla has just obtained tentative approval for its Full Self-Driving (FSD) suite in the world’s largest auto market, boosting its stock on Monday morning.
FSD overcomes regulatory hurdles in China
Chief Executive Elon Musk made a surprise visit to China on Sunday. He met with high-ranking government officials in Beijing, including CCPIT President Ren Hongbin and Chinese Premier Li Qiang.
The Tesla boss’ sudden trip to China reportedly resulted in one of the most significant bull signals for the electric automaker this year: the Chinese government’s FSD suite approval.
Unnamed Chinese officials disclosed that Tesla’s FSD suite has secured tentative approval as it successfully overcame some regulatory hindrances that impeded its launch in the country, the Wall Street Journal reported.
In addition, Bloomberg noted that two of these hurdles include mapping & data-security and privacy issues. In order to solve these issues, Tesla tapped Chinese web services company Baidu.
“The US carmaker was granted the approval under certain conditions, according to a person with knowledge of the matter, who asked not to be identified because details of all the criteria aren’t clear.
Tesla did manage to clear two of the most important hurdles: reaching a mapping and navigation deal with Chinese tech giant Baidu Inc. and meeting requirements for how it handles data security and privacy issues.”
Bloomberg
Partnership with Baidu
Tesla plans to launch its autonomous driving electric vehicles using mapping and navigation functions provided by Baidu, the people familiar with the matter disclosed.
As mentioned, this strategic partnership solves one of the most challenging regulatory obstacles for the Musk-led company’s plans to introduce the FSD suite in the region.
Partnering with a local company will also ease Chinese regulators’ apprehensions about data security issues. In addition, Baidu can also effectively support FSD-equipped Tesla electric cars, considering its recent advancements in the area of autonomous driving and artificial intelligence (AI).
FSD’s launch in China to play a crucial role in Tesla’s growth
Industry analysts suggest that the FSD’s imminent launch in the Chinese market will substantially aid Tesla’s further growth in the future.
Wedbush Analyst Dan Ives even called the recent feat a “watershed moment for the Tesla story.” These optimisms are unsurprising, considering the advantages Tesla may gain from the FSD’s deployment in China.
For instance, Tesla can collect more data from its FSD-equipped electric vehicles as they hit the Chinese roads. Tesla uses these data to train its neural nets. Therefore, the software will continuously improve with every additional mile driven.
“If Musk is able to obtain approval from Beijing to transfer data collected in China abroad, this would be pivotal around the acceleration of training its algorithms for its autonomous technology globally.”
Wedbush Analyst Dan Ives even wrote in his note
In addition, the FSD suite can also boost Tesla’s appeal to Chinese customers, particularly to tech-interested buyers.
The FSD suite’s successful attainment of a tentative approval boosted Tesla stock by 10% in morning trading on Monday.
