Tesla partners with Baidu, say reports; how it will help to launch full self driving EVs in China

Tesla, the electric vehicle (EV) giant headed by billionaire Elon Musk, has inked a pact with China’s top internet research company Baidu for mapping and navigation, reports said on Monday, April 29. The development comes amid Musk’s visit to China, where he has met the country’s Premier Li Qiang.

Musk, according to reports, met Qiang to press for approvals related to the rollout of Tesla’s full self driving (FSD) vehicles in China. The country is the company’s second-largest market, but the competition has increased over the past couple of years due to the rise of domestic EV makers.

While Tesla and Baidu are yet to issue official statements, news agencies Reuters and Bloomberg learnt from sources that the companies have signed an agreement.

How tie-up with Baidu will help Tesla to roll out FSD cars in China?

According to Reuters, the deal with Baidu will allow the automaker to access the mapping license for data collection on China's roads and highways.

Automobile companies offering intelligent driving solutions in China, including full-driving systems and technology-based driving assistants, have to mandatorily secure a mapping qualification before launching their products. For foreign carmakers, the requirement is to tie-up with any among the dozen domestic internet and navigation companies that have mapping licence.

The pact with Baidu allows Musk to clear the final regulatory hurdle before launching Tesla’s FSD and other driver assistance system-based vehicles in China, two sources privy to the development told Reuters.

The deal also allows Tesla to access Baidu’s lane-level navigation system, the news agency further reported. The details were yet to be independently verified.

Meanwhile, Grace Tao, Tesla's vice-president of external relations in China, wrote a commentary piece in China's official newspaper People's Daily on Friday, saying autonomous driving is a key growth driver for the country's new energy vehicle sector, arguing that the technology will hatch new business models such as robotaxis, a vision that Musk has embraced, the South Morning China Post reported.

Musk’s China visit

Days after deferring his visit to India till “end of this year”, Musk arrived in Beijing on Sunday at the invitation of the China Council for the Promotion of International Trade Automobile company. The visit was timed with Tesla’s ongoing negotiations with the Chinese authorities about the lifting of all restrictions, the state-run China Daily reported.

The restrictions included moving and parking in some sensitive areas in the country, as Tesla’s electric vehicles, or EVs, passed an authoritative national data inspection in China, the daily quoted official sources as saying.

Musk visited to discuss topics including removing restrictions on Tesla EVs in some sensitive areas, such as government agencies, as well as launching the vehicles' full self-driving functions in the country, it said.

Musk made the visit mainly because of the data issue and not there for the ongoing Auto China show in Beijing, as has been reported, it said.

Tesla’s position in Chinese EV market

Tesla, the leader in China's premium EV segment, delivered 603,664 Model 3s and Model Ys made at its Shanghai Gigafactory to buyers in China last year, an increase of 37.3 per cent over 2022.

The growth rate matched the 37 per cent rise in sales recorded in 2022 when it delivered about 440,000 vehicles.

Tesla has sold more than 1.7 million cars in China since it entered the market in 2012 and located its biggest factory in Shanghai, where Musk enjoys high levels of political support for the project.

In a sign of its further commitment to China, Tesla bought a parcel of land in Shanghai to build a factory with a planned annual capacity of 10,000 Tesla Megapack batteries, which are used for battery storage stations.

His visit to China also coincides with Tesla's recent announcement to lay off "more than 10 per cent" of its global headcount to cut costs and boost productivity.