Elon Musk Visits China to Talk about Tesla’s Full Self-Driving Software Launch

• Elon Musk is planning to expand Tesla's Full Self-Driving Software (FDS) to China.
• On his trip, he met with Premier Li Qiang in Beijing, who previously helped him set up Tesla's first Chinese factory in Shanghai.
• This move comes at a time when Tesla is under heavy scrutiny in the USA from the NHTSA over security issues with its cars' autopilot feature.

On Sunday, Elon Musk paid a visit to Beijing to discuss the expected roll-out of Tesla's Full Self-Driving software (FDS) and to seek permission to transfer data overseas, a person close to the source revealed.

China is Tesla's second biggest market and the reason why this visit is interesting is because it was an announced visit. Although Musk had previously commented that Tesla's FDS software will soon be available in China, nothing concrete has been decided.

His trip included a meeting with Premier Li Qiang in Beijing where he was first greeted by Ren Hongbin, the head of the China Council for the Promotion of International Trade and the organizer of the Beijing Motor Show currently taking place.

No official record of their conversation was found. During the meeting with Li, Musk was told that Tesla's FDS system expanding into China could be used as a successful example of US-China cooperation.

Honored to meet with Premier Li Qiang. We have known each other now for many years, since early Shanghai days' - Elon Musk on X

For context, Li was the one who helped Musk get permission to set up his first Tesla factory in Shanghai back in 2008.

Another video was posted by a user connected with the Chinese state media where Musk was seen saying that it's good to have electric cars in demand in China. Soon, all the cars in China will be electric.

The Trip Bearing Fruits Already

Chinese state media has been tight-lipped about Musk's FDS talks with Li. While we don't have a lot of details about that, we do know of a few key tie-ups:

• Tesla won a key endorsement from a top Chinese auto association. It said that Tesla's Model 3 and Y cars are compliant with China's data security requirements.
• Two other sources have also confirmed that Tesla has signed an agreement with Baidu (a popular search engine in China) to use its mapping license to collect data on public roads in China. This move will greatly help in launching Tesla's FDS system in the country.

Data collection and transfer have been the biggest hurdles in launching Tesla's FDS in China. Although the model came out 4 years ago, China has made it mandatory for the company to store all Chinese data within its borders. So this time around, Musk is trying to get approval to send Chinese data back to the US to train its algorithm.

The sooner Musk can get all the approval, the faster he can train the algorithm. China's road conditions are vastly different from the USA's. With small markets and bicycles frequenting the streets, the FDS needs to be a lot more precise here which means it will probably take longer.

While this update is certainly a positive step, we don't know if the company will need any other approvals to proceed with this project.

Troubled Times for Tesla

While on the one hand, Musk is improving his chances of expanding to the Chinese market, on the other hand, business back in the USA has taken a hit.

• Just last week, an investigation by the NHTSA revealed that Tesla's self-driving cars have been involved in at least 467 collisions and 13 major crashes.
• Tesla had to recall 3878 Cybertrucks last week due to unintended acceleration issues.
• Similarly, last year in December, the company had to recall 2 million vehicles from US streets to fix an issue with the car's autopilot feature.

As a result of this, its shares have also taken a hit. Even its shares in the Chinese market fell from 10.5pc to 6.7pc.

Also, breaking into the self-driving car market in China isn't going to be as easy as it seems. Chinese car makers like BYD are working on their own auto-driving models. A range of new electric cars have already been showcased at the annual Beijing auto show that started on Thursday. Tesla on the other hand did not take part in the show.

Although the company has no new models to reveal now, Musk has promised to bring more affordable cars next year. However, we know that Chinese makers are known for their affordable products, so whether Musk will be able to compete with that remains a question.

However, if this deal does go through, it might just be the much-needed game-changer for Tesla.

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