Elon's Urgent Trip to China; Asks Help From Official To Boost Tesla With Driver-Assistance Software

In a surprise move, Tesla CEO Elon Musk made a weekend trip to China to push for approval of driver-assistance software, seen as a potential remedy for the carmaker's declining revenue.

The 52-year-old tech mogul met with Premier Li Qiang, the Chinese Communist Party secretary for Shanghai. Qiang had helped Tesla set up what is now considered the company's top plant globally.

According to a person with knowledge of the matter, Musk was scheduled to meet with government officials to discuss the rollout of their "Full Self-Driving" (FSD) system. Despite requiring constant driver supervision and not making Teslas fully autonomous, the FSD feature generates additional revenue for Tesla in the US.

Customers can choose between a one-time purchase of £6381.84 ($8,000) or a monthly subscription of £78.98 ($99). Securing approval for Tesla's FSD system in China could face challenges due to two main concerns: data privacy sensitivities surrounding the system's reliance on car cameras and potential safety issues related to the technology itself.

Tesla's history of data collection practices has raised concerns, leading to previous bans on their vehicles in Chinese military compounds and some government facilities.

In the US, safety concerns are also being investigated. The National Highway Traffic Safety Administration (NHTSA), the country's top auto-safety regulator, recently launched a probe into Tesla's Autopilot system, a less-advanced driver-assistance feature, following 20 reported crashes since December involving vehicles that received an over-the-air software update.

Revenue Decline: Tesla Faces First Setback in Years

Tesla has been facing a first year-over-year decline in quarterly revenue since 2020. This slump indicates a deeper issue than just affordability. To address this, Tesla announced a workforce reduction of at least 10 percent and an acceleration of new model development, including more affordable options.

Thanks to this announcement, Tesla shares saw a sudden and brief upsurge. Musk stated these new vehicles could be ready as early as this year-end, or by early 2025 at the latest. Moreover, the billionaire recently confirmed that his automobile company is set to release Robotaxi in August.

According to China Central Television, China's second-highest ranking official, Li Qiang, met with Musk in Beijing shortly after the Tesla CEO arrived in the city. Li emphasised China's policy of openness to foreign businesses and hailed Tesla as a successful example of Sino-US cooperation.

Update: Tesla's FSD Inches Closer to China Launch

While nothing is set in stone yet, a recent Bloomberg report suggests that Elon Musk's surprise visit to China might have yielded immediate results. Tesla appears to have overcome two key obstacles to launching its driver-assistance system in the world's largest car market, though final approval is not yet confirmed.

To deploy its FSD system in China, Tesla reportedly struck a partnership with Chinese tech giant Baidu Inc. for mapping and navigation functions, according to informed sources.

This move coincides with Tesla reportedly clearing a key hurdle related to data security and privacy requirements in China, potentially addressing previous concerns in this area.

Musk's visit to China comes shortly after he postponed a trip to India, which included a planned meeting with Prime Minister Narendra Modi. The Tesla CEO attributed the last-minute cancellation to "very heavy Tesla obligations."