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Musk in China Talks FSD Amid Tesla's Global Cuts

Musk visits China to discuss Tesla's FSD amid global workforce cuts and competitive pressures in the EV market.

By Alex P. Chase

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4/28, 04:19 EDT
Tesla, Inc.
XPeng Inc.
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Key Takeaway

  • Elon Musk visits China unannounced to discuss Tesla's Full Self-Driving software amid global workforce cuts and slowing EV sales.
  • Tesla, facing regulatory scrutiny and market competition, aims to advance FSD technology in China's competitive ADAS market.
  • The visit highlights challenges including cybersecurity concerns and NHTSA investigations into Tesla's Autopilot safety.

Musk's Unannounced China Visit

Elon Musk, CEO of Tesla Inc., has embarked on an unannounced trip to China, landing in Beijing around 2 p.m. local time on a SpaceX-registered Gulfstream. The visit, not publicly disclosed prior to his arrival, is said to focus on discussions regarding the rollout of Tesla's Full Self-Driving (FSD) software in the country. This trip occurs amidst a period of significant challenges for Tesla, including a workforce reduction exceeding 10% globally due to slowing electric vehicle (EV) sales growth. Musk's journey to China follows a canceled visit to India, attributed to pressing obligations at Tesla.

Tesla's Strategic Moves in China

Tesla's engagement in China, a critical market for the EV giant, comes at a time when the company is navigating through a complex landscape of competitive pressures and regulatory scrutiny. The company's Shanghai factory, operational since 2019, is a cornerstone of its global production, contributing to over half of Tesla's worldwide deliveries. However, Tesla faces challenges in China, including bans of its vehicles from military and some government compounds over cybersecurity concerns linked to the vehicle's cameras. Musk's discussions in China are aimed at advancing Tesla's FSD technology in a market where advanced driver assistance systems (ADAS) are increasingly common and competitive, particularly as local EV manufacturers like Xpeng Inc. and Xiaomi Corp. leverage sophisticated technology to gain market share.

Regulatory and Market Challenges

Tesla's efforts to expand its technological footprint come amid heightened regulatory scrutiny and market competition. The National Highway Traffic Safety Administration (NHTSA) is investigating Tesla's recall of its Autopilot driver-assistance system, questioning whether the company has adequately addressed safety concerns to ensure driver attentiveness. This investigation follows a recall affecting nearly all Tesla cars manufactured in the U.S. since 2012, prompted by concerns over the system's safety safeguards. Additionally, Tesla's market share in the U.S. EV sector has declined, with the company facing increased competition from both new entrants and established automakers globally.

Management Quotes

  • Elon Musk, CEO of Tesla:

    "So we plan on, with the approval of the regulators, releasing it as a supervised autonomy system in any market that — where we can get regulatory approval for that, which we think includes China."