Elon Musk Reaches Deals in China on Self-Driving Teslas

Elon Musk Reaches Deals in China on Self-Driving Teslas

By Oghale Apr29,2024

Tesla has concluded a series of arrangements with regulators and a Chinese artificial intelligence company during a quick trip to Beijing on Sunday and Monday by Elon Musk, the car maker’s chief executive, potentially clearing the way for the company to offer its most advanced self-driving software on cars in China.

Tesla had faced a couple hurdles to offering the latest level of autonomous driving, which it calls supervised Full Self-Driving. It has needed approval from Chinese regulators, who questioned whether the company took adequate precautions to protect data. And it has needed access to extremely high-resolution maps across the country.

Mr. Musk flew on his private jet to Beijing on Sunday morning and met almost immediately with Premier Li Qiang, China’s No. 2 official after Xi Jinping. Mr. Li is a longtime ally of Mr. Musk who, when he served as Communist Party secretary in Shanghai, helped clear the way for Tesla’s construction there of what is now the company’s largest car assembly plant.

The government-linked China Association of Automobile Manufacturers later announced that Tesla and five Chinese automakers had obtained approval from authorities and the association for their data security precautions on dozens of car models. The rules bar automakers in China from using software that would identify the faces of anyone outside their vehicles, and include many other restrictions. Self-driving systems use cameras to guide vehicles.

The cars included Tesla’s Model 3 and Model Y. The five Chinese manufacturers included BYD, which is China’s dominant electric vehicle company and Tesla’s primary global rival, and Nio, a longtime player in China’s auto sector.

Tesla has run a data center in Shanghai for the past three years that handles the extensive information accumulated by the cars it has sold in China as they navigate the country’s roads. China has tightened its data security regulations in recent years to severely limit information leaving the country.

Tesla has separately concluded a deal with one of China’s largest tech companies, Baidu, to obtain high-resolution maps of road lanes, according to a person familiar with the deal who was not authorized to speak about it publicly. Tesla cars in China have used Baidu maps for four years for basic navigation, directing drivers where to turn, but have not previously had access to the higher-resolution maps.

Baidu is one of about 20 Chinese companies with the necessary credentials from the Chinese government to obtain access to high-resolution mapping data. Automakers are required to partner with one of these companies or be forced to rely heavily on cameras on their vehicles to create their own maps, as Tesla has done until now.

No details were immediately available on Monday on what Tesla has agreed to do in exchange for the approvals. China has a long history of urging multinationals to share considerable technology in exchange for access to its market. But the Chinese government insists that it does not force foreign companies to surrender their commercial secrets, and promised the Trump administration it would not do so.

Tesla’s stock jumped Monday on the news of the approvals in China. The company last week reported that its profit plunged 55 percent in the first three months of the year, while its revenue fell 9 percent. Days earlier, Tesla announced that it would lay off 10 percent of its worldwide work force, or about 14,000 employees.

As Chinese automakers introduce large numbers of their own electric car models this year, Tesla is doubling down on self-driving capabilities, a feature for which even Chinese auto executives acknowledge Tesla leads the world.

Tesla already offers what it calls “supervised Full Self Driving” in the United States. The company charges $99 a month to upgrade Tesla cars from its Autopilot or Enhanced Autopilot driver-assistance systems to the new level.

The main traffic safety regulator in the United States said on Friday that it was investigating Tesla’s recall of its Autopilot driver-assistance system because of concerns that the company had not done enough to ensure that drivers remained attentive while using the technology.

The regulator, the National Highway Traffic Safety Administration, said there had been at least 29 fatal accidents involving Autopilot and Full Self-Driving from January 2018 to August 2023. But the analysis did not assess whether this was more or fewer deaths than if humans had been driving.

China has also had deaths from mistakes made by self-driving cars, which are now offered by numerous Chinese companies as well as Tesla. But crashes involving errors by human drivers are the frequent subject of viral videos in China, feeding a popular perception that self-driving cars may be safer.

Joy Dong contributed research.

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By Oghale

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