- Elon Musk made a surprise visit to China, meeting officials and striking a deal with Baidu.
- The deal brings Tesla a step closer to introducing its self-driving features in cars sold in China.
- Tesla's sales in China have struggled amid rising competition from Chinese makers and a price war.
Elon Musk's surprise visit to China appears to have paid off.
The billionaire unexpectedly traveled to Bejing over the weekend, meeting with high-ranking officials and striking a deal with Chinese search giant Baidu.
The whirlwind visit came just a week after the billionaire decided not to make a planned trip to India to meet Prime Minister Narendra Modi, citing Tesla-related "obligations."
Instead, Musk met in Beijing with Premier Li Qiang, China's second-highest ranking politician, to discuss the rollout of Tesla's full self-driving technology in the world's biggest auto market. The EV maker is now expected to get the green light for the tech in China, according to unnamed sources cited by Bloomberg.
Approval of FSD software could help boost Tesla's sales in China, which have slumped amid steep competition from local rivals, and suffered elsewhere from rising anxiety about EVs.
'Golden opportunity'
The partnership with Baidu revolves around mapping and navigation functions for Tesla's autonomous driving software.
Baidu's lane-level navigation and mapping is likely to let Tesla make its autonomous driving services available in China, Bloomberg reported
Such a move could be a much-needed boost for Tesla, which has lost its market leadership in the world's largest EV market.
Tesla has had difficulty keeping up with a brutal price war against Chinese suppliers. In 2023, it lost its title as the world's top EV seller to BYD, which is also planning to release its own autonomous driving technology.
China's sluggish economy and property market woes have also dampened consumer demand and made some wary of big-ticket purchases.
Approval for FSD could have a significant impact on Tesla's revenues given it charges $8,000 in the US for it, or $99 a month for a subscription.
Wedbush analyst Dan Ives said the new deal "could open up FSD in China, which I view as unlocking what really could be the golden opportunity for them," per CNBC.
Chinese authorities also said that Tesla's cars made in the country now passed data security requirements. In 2021 Beijing cracked down on the use of Teslas by state personnel over security concerns posed by the vehicles' cameras.
Musk's battle plan
Musk's China visit comes amid tough times for Tesla.
The EV-maker reported its first decline in quarterly revenue since 2020 in its earnings call last week, missing Wall Street's already low expectations. The revenue drop represented the first major decline since the pandemic disrupted vehicle production and deliveries.
Telsa is also laying off 10% of its workforce, or around 14,000 employees, and has had to recall its recently launched Cybertrucks.
Despite the miserable earnings, the company's stock jumped on the news Tesla's long-awaited "affordable" EV was coming soon. Musk didn't give many specifics on the upcoming cheaper EV, such as exactly how much it would cost or when it'd be available, but it was enough to soothe nervous investors.
The stock surge confirms that Musk's promises still have meaning for many investors. Tesla is set to rise again by close to 10% when trading begins on Monday.
The combined might of China's car makers are a formidable adversary, but Musk's visit shows he is coming out fighting.
Tesla did not immediately respond to a request for comment from Business Insider, made outside normal working hours.
