Key hurdles cleared after Musk's quick visit

Elon Musk's quick visit to China has paid immediate dividends, with Tesla clearing two key hurdles to introduce its driver-assistance system to the world's biggest auto market.

The US carmaker will partner with Chinese tech giant Baidu for mapping and navigation functions to deploy what it calls full-self driving - or FSD - according to reports. Tesla has also passed a key data-security and privacy requirement in China, which would help ease some concerns over bringing FSD to market.

Baidu shares rose as much as 7 percent in Hong Kong.

The moves come after Tesla chief Elon Musk made an unannounced trip to China on Sunday, seeking approval for driver-assistance software that could help arrest the carmaker's revenue decline.

While the suite of features requires constant supervision and does not make Tesla vehicles autonomous, the company charges US$8,000 (HK$62,615) to buy FSD outright in the United States, or US$99 a month for a subscription.

Chinese officials reportedly told Tesla that Beijing has tentatively approved the plan to launch its FSD feature in the country.

Musk on Sunday met with Premier Li Qiang, who as the Communist Party secretary for Shanghai helped the company set up what is now its top plant globally. Musk's private jet left Beijing yesterday.

While Tesla initially enjoyed a red-carpet welcome in China, its fortunes have faded more recently as it faces tougher competition from domestic electric vehicle makers like BYD and Li Auto.

Tesla's share of China's auto market shrank to around 6.7 percent in the fourth quarter of 2023, from 10.5 percent in the first quarter of last year, according to Bloomberg calculations.

Advanced driver-assistance systems are becoming increasingly common in China, with many local players including Xpeng and Xiaomi using such features as selling points.

Separately, Xiaomi's chairman Lei Jun said the loss of its car businesses is moderately small among its peers as the sales volume of its first EV model SU7 exceeded expectations.

The chairman of Chinese battery giant CATL, Robin Zeng Yuqun, a key Tesla supplier, also visited Musk's hotel yesterday, reports said.