Tesla’s stock price surged as reports emerged on Monday suggesting that the electric car manufacturer had received approval from the Chinese government to bring its Full Self-Driving (FSD) software to China, a significant move for Tesla’s long-term growth. The news came after Elon Musk held talks with high-ranking Chinese politicians over the weekend and following confirmation by the country’s automobile association that Tesla had met data security standards required for its Model 3 and Y vehicles in China. According to Wedbush Securities’ senior equity research analyst Daniel Ives, who published a note on Monday regarding this development, “Musk winning FSD approval in the key Chinese market is a watershed moment for the Tesla story.”
FSD provides more advanced driver assistance features than Autopilot, which was developed to assist human drivers. The technology is still undergoing testing and Musk has stated that it will eventually be much safer than a human driver; around ten times safer in fact. However, Tesla’s Autopilot system has come under scrutiny from the US government due to some crashes involving the software.
Ives believes this recent breakthrough is vital for training its autonomous technology globally because of the country’s strict data security standards required by Chinese authorities. “If Musk can obtain approval in Beijing to transfer data collected in China abroad, it would be pivotal around accelerating the training of algorithms for Tesla’s self-driving tech,” Ives explained.
The electric vehicle market is highly competitive and crowded in China with many domestic car manufacturers vying alongside established companies such as Volkswagen or Toyota, all attempting to win a larger share of this growing sector. Musk has recently spoken enthusiastically about Tesla’s self-driving tech strategy. On April 23rd he remarked: “I think it should be obvious to anyone who’s driving Version 12 [of FSD], and it tells that we are only a matter of time before we exceed the reliability of humans, not much time.”
As part of Tesla’s product roadmap for next year, which was revealed last week, Musk confirmed that there will be new electric cars introduced in China. These vehicles have been described as more affordable models compared to current products such as Model S or X.
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