Tesla’s stock went up a lot on Monday because there were reports that Elon Musk got approval from China to use Tesla’s “Full Self-Driving” software there.
Some people who know about this told the Wall Street Journal that Chinese officials said it’s okay for Tesla to use the “Full Self-Driving” software in China. This happened while Musk was in Beijing for 24 hours over the weekend.
Another report from Bloomberg said Tesla will use data from a Chinese company called Baidu to power the “Full Self-Driving” software. Tesla was already using Baidu’s data for navigation in its cars. Using data from a Chinese company helped Tesla get approval because it lowers concerns about privacy and security.
Tesla’s stock went up by 15.3%, which is a big jump. This is the highest the stock has been since March 1. Over the past four days of trading, Tesla’s stock has gone up by almost 40%.
We don’t know how much Tesla will charge for the “Full Self-Driving” software in China yet. In the U.S., Tesla charges $8,000 to use it forever (which used to be $12,000) or $99 a month for a subscription.
Having the “Full Self-Driving” software available in China is a big deal for Tesla. It’s not just about making more money. It also makes Tesla more competitive against other companies like NIO, Li Auto, and XPeng, as well as big tech companies like Xiaomi, which are also working on self-driving software.
Tesla’s sales in China might have been affected because it didn’t have the “Full Self-Driving” software. Chinese customers like having the latest technology in their cars. According to China’s Passenger Car Association, Tesla’s share of China’s car market went down to 6.7% in the last part of 2023 from 10.5% the year before, even though Tesla cut prices a lot. Globally, Tesla delivered fewer cars in the first quarter of 2024 compared to a year ago.
But now that Tesla has gotten approval for the “Full Self-Driving” software and a deal with Baidu, things are looking up for the company.
An analyst named Dan Ives said this is a really important moment for Tesla. Getting approval for the “Full Self-Driving” software in China is a big win for Elon Musk and Tesla. It’s a big part of Tesla’s plan to make self-driving cars and even robotaxis in the future.
One important thing for Tesla’s self-driving software is collecting lots of data. Tesla has been storing data in China since 2021, as required by Chinese regulations. If Tesla can move that data to servers in the U.S., it will help Tesla make its self-driving software better all over the world. Also, people in China might be more interested in using the self-driving software because the government supports it in some places, which means Tesla will get even more data to improve its software.
