Musk Visits China: Tesla Stocks Soar

On April, CEO of Tesla Elon Musk made a surprise visit to China and soon after, the companies' shares marked a 15.6% trading increase, the highest since late February. In Beijing, Musk met with Chinese Premier Li Quiang, seeking permission for data-collection for Tesla’s FSD (full-self driving) software. He also cut a deal with Baidu, also known as the “Chinese Google”, and therefore restored investor’s hopes for future robotaxis and operations in China.  

Why it Matters: Tesla has over 1.7 million cars on the road in China but is struggling to compete with newest low-cost EVs. In large, driver assistance and autopilot software are an important factor when purchasing vehicles and Tesla is seeking to stand out in this category.  

Going deeper: Musk claims Tesla isn’t just a carmaker, but rather a collective of tech-focused startups. Tesla’s DoJo supercomputer in the US is believed to add more than $500 million to its market value according to Morgan Stanley analyst Adam Jones. FSD (Full Self Driving) v.12 onward has been replacing thousands of lines of code with a large AI-model fed by camera footage of the Tesla fleet. This AI technology could accelerate progress toward robotaxis and true driverless services the company aims to provide.  

In China, Tesla had launched its FSD software in the year 2020 but was forced to limit its usage due to China’s data-collection rules. To change this, Musk met with Chinese officials including their Premier and the China Association of Automobile Manufacturers (CAAM). They endorsed Tesla as being compliant of the countries’ data-security measures and approved driver assistance in China. Musk also persuaded them to export data it collects in China to its nascent AI data centers in the US.  

Lastly, Musk also cut a deal with Baidu which would be responsible for supplying mapping and navigation functions for FSD technologies.  

The Bottom Line: Other than booming Tesla stocks, experts consider Musk’s visit to China even more important. It will allow the company to grow amid low-cost rivals and increase data feeds to its AI networks, hence anticipating the arrival of truly autonomous EVs. 

Source in MLA format:  

• Baccardax, Martin. “Tesla Shares Soar as Elon Musk Returns from China with FSD “Game Changer.”” TheStreet, 29 Apr. 2024, www.thestreet.com/investing/stocks/tesla-shares-jump-as-elon-musk-returns-from-china-with-fsd-game-changer. Accessed 30 Apr. 2024. 

• Jolly, Jasper. ““Watershed Moment” for Tesla as Elon Musk’s Visit to China Reaps Quick Reward.” The Guardian, 29 Apr. 2024, www.theguardian.com/business/2024/apr/29/tesla-elon-musk-china-visit-li-qiang-mapping-data-baidu. Accessed 30 Apr. 2024. 

• “Tesla CEO Elon Musk Makes Surprise Visit to China after Postponing India Trip.” Www.youtube.com, 28 Apr. 2024, www.youtube.com/watch?v=SvbRj8R1UAo#:~:text=India%20Trip%20%2D%20YouTube-. Accessed 30 Apr. 2024.