Musk's Surprise Visit to Beijing... Seeking Breakthrough with Autonomous Vehicle Launch

Elon Musk, CEO of Tesla, who has been struggling with sluggish electric vehicle sales, made a surprise visit to China on the 28th and met with Premier Li Qiang. This came just over a week after canceling his visit to India and was reported to be aimed at discussing the launch of the Full Self-Driving (FSD) software in China. Attention is focused on whether Tesla, which is experiencing deteriorating performance, can secure approval for the FSD launch in China and find a breakthrough in the world's largest electric vehicle market.

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On the day, CEO Musk visited Beijing at the invitation of the China Council for the Promotion of International Trade (CCPIT) and held talks with Premier Li Qiang of the State Council.

Premier Li evaluated Tesla's development in China as a successful example of Sino-US economic and trade cooperation. CEO Musk also expressed to Premier Li his desire to strengthen cooperation with China.

During this visit to China, CEO Musk persuaded regulatory authorities to approve the launch of FSD in China to expand electric vehicle sales domestically. Tesla launched FSD in 2020 and provides the service in several countries including the United States, but has yet to receive approval for service launch in China. This is one of the reasons why Tesla's competitiveness lags behind Chinese electric vehicle manufacturers, who offer autonomous driving features to Chinese drivers in most scenarios.

Currently, China restricts the data Tesla can collect in sensitive areas for national security reasons and prohibits the transmission of such data to external countries like the United States. Tesla vehicles are banned from entering Chinese military facilities, government agencies, and state-owned enterprises. Access to public parking lots within airports, train stations, and police stations is even more strictly limited. On the other hand, Tesla wants to transmit data to the United States for algorithm training necessary for autonomous driving functions.

Attention is focused on whether Tesla's FSD launch in China will be realized following CEO Musk's visit. Earlier this month, CEO Musk stated on the social networking service X (formerly Twitter), "Tesla may soon allow Chinese consumers to use FSD." If Tesla fails to obtain FSD approval, its competitiveness in the rapidly growing Chinese electric vehicle market is expected to fall further behind.

CEO Musk's visit comes amid worsening Tesla performance due to slowing growth in the electric vehicle market and the rise of Chinese manufacturers. Tesla's vehicle deliveries in the first quarter of this year were 386,810 units, down 8.5% compared to the same period last year. This is the first decline in four years since the COVID-19 pandemic began in 2020. Tesla's first-quarter sales in China also decreased by 4% during the same period. Additionally, Tesla recently announced plans to reduce its workforce by 10% overall and has cut electric vehicle prices in China and the United States. After announcing first-quarter results, CEO Musk also revealed plans to expand low-priced new models.

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