Billionaire Elon Musk made a surprise visit to China to secure approval for Tesla’s automatic driving features from the Chinese government. Musk met with Chinese Premier Li Qiang, who he described as an old friend. The purpose of the visit was to ensure Tesla’s Internet-enabled autonomous driving functions received official approval from the China Association of Automobile Manufacturers (CAAM).
CAAM, a government-backed entity, plays a crucial role in certifying Internet-connected automobiles for compliance with China’s data security laws. Musk’s visit was essential to secure CAAM’s endorsement for Tesla’s vehicles, which are equipped with cameras for monitoring both the interior and exterior surroundings.
Following Musk’s visit, Tesla received approval for data privacy from CAAM, and a deal was announced with Baidu to provide mapping and navigation data for Tesla’s full self-driving system. This partnership would not have been possible without the endorsement of the Chinese Communist Party, which controls Internet navigational data tightly.
The visit boosted confidence in Tesla among Chinese consumers, and Chinese state media used the visit for propaganda purposes to showcase the importance of the Chinese market to American companies. The successful visit led to a surge in Tesla’s stock prices and indicated potential improvements in Tesla sales in China.
Sales for Tesla’s major global rival, BYD, declined sharply in the first quarter of 2024, while Tesla weathered the storm better due to its premium brand image and appeal to wealthy customers. The drop in sales for BYD and other Chinese rivals could exacerbate the issue of overcapacity in the EV market.
