Musk's Surprise Visit to Beijing... Green Light for Autonomous Vehicle Launch (Comprehensive)

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 a visit to India and was reportedly aimed at discussing the launch of the Full Self-Driving (FSD) software in China. Meanwhile, Chinese authorities gave Tesla the first approval among foreign companies in a data security inspection, signaling a green light for Tesla's FSD launch in China.

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On the same 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.

After meeting Premier Li, Musk posted on X, "It was an honor to meet Premier Li Qiang," adding, "We have known each other for a long time since the early days in Shanghai." Premier Li first connected with Musk when he was the Shanghai Party Secretary in 2019, the year Tesla began operating its Shanghai Gigafactory.

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

Meanwhile, the China Association of Automobile Manufacturers and the National Computer Network Emergency Technology Handling Coordination Center announced in the "Notification on the Status of the Fourth Safety Requirement Inspection for Automobile Data Processing (First Round)" that both the Model 3 and Model Y produced at Tesla's Shanghai Gigafactory passed the inspection. This is seen as a step closer to Tesla launching FSD in China.

China currently restricts the data Tesla can collect in sensitive areas for national security reasons and prohibits transmitting this data abroad, including to the US. Tesla vehicles are banned from entering Chinese military facilities, government agencies, and state-owned enterprises. Access to public parking lots at airports, train stations, and police stations is even more strictly limited. On the other hand, Tesla wants to transmit data to the US for algorithm training necessary for autonomous driving functions.

Musk's visit to China has sparked analysis that the green light for Tesla's FSD launch in China has been turned on. Earlier this month, Musk stated on the social networking service X (formerly Twitter), "Tesla may soon allow Chinese consumers to use FSD."

He also expressed his commitment to expanding FSD after the earnings announcement on the 23rd of last month. During the conference call, Musk said, "We should be regarded as an artificial intelligence (AI) or robotics company," emphasizing, "Anyone who does not believe Tesla will solve autonomous driving should not invest in the company. But we will."

Musk's visit comes amid worsening Tesla performance due to a slowdown in the electric vehicle market growth and the rise of Chinese companies. Tesla's vehicle deliveries in the first quarter of this year were 386,810 units, down 8.5% from the same period last year. This marks the first decline in four years since the COVID-19 pandemic began in 2020. Tesla's first-quarter sales in China also fell 4% during the same period. Additionally, Tesla recently announced plans to cut 10% of its total workforce and has reduced electric vehicle prices in China and the US. After the first-quarter earnings announcement, Musk also revealed plans to expand low-priced new models.

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