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Tesla Surges 12% in Premarket on China Self-Driving Breakthrough

Tesla's shares U.S. premarket trading on Monday, jumping over 12% after introduce self-driving technology in China
April 29, 2024

Tesla's shares surged in U.S. premarket trading on Monday following a significant development: the electric carmaker achieved a crucial milestone in rolling out its full self-driving technology in China.

Around 8:30 a.m. ET, the company's share price skyrocketed by more than 12% as investors responded to news of Tesla CEO Elon Musk's visit to China.

Tesla announced on Sunday that local Chinese authorities had lifted restrictions on its cars after meeting the country's data security requirements. This move sparked expectations that Tesla's driver-assistance software, Full Self-Driving (FSD), would soon be available in China, the world's largest market for electric vehicles.

Although Tesla's electric cars are among the most popular vehicles in China, concerns about data security reportedly led to some of them being banned from government-related properties.

In a separate development earlier this year, the Biden administration initiated an investigation into whether imported cars from China posed national security risks due to their potential to collect sensitive data.

FSD represents an upgrade to Tesla's Autopilot driver assistant. While Tesla has offered its FSD technology in China for years, it has been restricted to certain features, such as automated lane changing, due to data security concerns.

According to reports, Tesla has reached an agreement with Baidu that would grant the company access to the Chinese internet giant's mapping and navigation technology for Tesla's FSD feature.

This agreement would enable Tesla to utilize Baidu's mapping service license, a requirement for intelligent driving systems to operate on public roads in China. However, CNBC was unable to independently verify this report, and both Tesla and Baidu were not immediately available for comment.

With this license, which foreign companies can only obtain in partnership with local Chinese firms, Tesla will be authorized to operate FSD legally on Chinese roads, allowing its fleets to collect data on traffic, road signs, and routes.

For Tesla, this breakthrough toward bringing its FSD technology to China is a significant victory, especially considering the fierce competition it faces in the Chinese market. Local rivals such as BYD, Nio, and XPeng have intensified their competition with Tesla in recent years.

BYD, which was temporarily the world's largest electric vehicle maker, produced over three million new energy vehicles in 2023. However, the firm recently lost this title after experiencing a 43% sales decline in the first quarter of this year.

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