The agreement was reached after Musk’s Sunday meeting with the second person in the Chinese power hierarchy, Premier of the State Council of the People’s Republic of China Li Qiang.
Tesla shares rose 17% to US$197, giving the company a market value of US$615.8 billion. Overall, Tesla shares rose more than a third for the week, an important performance given that they have nearly halved over the past two years.
The agreement with Baidu helped overcome an important regulatory hurdle for the Chinese market.
The British Financial Times, citing its sources, says that foreign companies wishing to sell computerized transportation technology to China are required to use one of about 20 Beijing-approved suppliers of mapping and navigation systems.
In the first quarter of this year, Tesla accounted for about 7.5% of the electric vehicle market in China, its second-largest market.
Tesla faces fierce competition in China with relatively low demand and that its continued success will depend on whether it gets approval to sell fully autonomous driving technology, said Daniel Ives, an analyst at US investment firm Wedbush Securities.
The current approval allows the company to sell only parts of its autonomous driving technology, such as parking assist, to China, but full autonomous technology will require further approval.
The introduction of this technology in China will significantly increase the company’s revenues, and will also help Tesla gain an important advantage over local automakers, whose products are no less competitive.
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2024-04-30 08:21:56