China lifts restrictions on Tesla cars after Elon Musk visits China, sending stock prices soaring
Chinese authorities have lifted restrictions on Tesla vehicles after the company's cars passed China's data security requirements. The announcement came after Tesla CEO Elon Musk met with Chinese Premier Li Qiang, raising hopes that Tesla's driver assistance software, 'Full Self-Driving,' will soon be available in China.
Tesla Soars on Tentative China Approval for Driving System - Bloomberg
Musk visits Beijing as Tesla's China-made cars pass security rules
https://www.cnbc.com/2024/04/29/musk-visits-beijing-as-teslas-china-made-cars-pass-security-rules.html
Tesla electric cars are among the most popular vehicles in China, but they have been banned from some government facilities over concerns that their data could be transmitted to the US-based company.
According to the China Association of Automobile Manufacturers and the China National Computer Network Emergency Response Technical Team/Coordination Center, all cars released domestically in 2022 and 2023 will be subject to new data security requirements and will not be allowed to be sold domestically unless they pass the requirements.
The new rules require cars to anonymize facial recognition data, default to not collecting data in the car, and check whether the data is processed in the car and the user is notified about the processing prominently. Tesla's Model 3 and Model Y passed the rules, and their use was lifted in some regions. In addition to Tesla, domestic companies such as BYD and Lotus also passed the rules this time, but it is not clear which regions have lifted the ban.
Following the announcement, Tesla shares soared 15% to their highest price in more than three years.
Prior to the announcement, Musk was seen making a surprise visit to China, where he reportedly met with Chinese Premier Li Qiang, who is said to have helped Tesla set up its Chinese factory.
Tesla was initially welcomed in China, but its momentum has waned as it faces stiff competition from domestic automakers, led by BYD. Bloomberg estimates that Tesla's share of China's auto market has shrunk from 10.5% in the first quarter of 2023 to about 6.7% in the fourth quarter of 2023.
Musk's visit to China has raised hopes that Tesla's driver assistance software 'Full Self-Driving' will soon be available in China, but some believe that China will prioritize supporting domestic companies over foreign ones, as many local companies, including Xpeng and Xiaomi, are using advanced driver assistance systems as a selling point for their cars. 'The likelihood of full self-driving being rolled out in China is extremely low, and there is no strategic value in China supporting Tesla as there are many high-quality alternatives available domestically,' said Junheng Li, CEO of JL Warren Capital.
Meanwhile, Dan Ives, a senior analyst at Wedbush Securities, said, 'We see this as a real opportunity for Tesla as it opens up the possibility of fully self-driving in China. This will be a turning point for Tesla,' pointing out that the lifting of domestic restrictions has given Tesla an opportunity to make further advances.
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