Tesla’s stock (TSLA) is surging this morning on several reports that China is going to approve the automaker’s deployment of its Full Self-Driving package in the country.
The Full Self-Driving package is a promise that Tesla has been selling to its vehicle owners since 2016: that promise is that all new vehicles are equipped with the hardware necessary to become self-driving and it will become that through future software updates.
In the meantime, the package includes additional ADAS feature, like city-street driving where the car handles all the driving, but it needs to be supervised by the driver at all times.
However, this is only available in North America right now. That’s partly due to it having been first designed for the market and it is not completely ready to be deployed elsewhere, but also because regulations in some markets don’t yet approve of the system.
That includes the world’s largest auto market: China.
New reports claim that this is about to change. Tesla CEO Elon Musk has been on a visit to China over the last few days and met with Premier Li Qiang.
Now, Bloomberg reports Tesla was able to secure a deal to get approval for its Full Self-Driving deployment in the country:
The US carmaker was granted the approval under certain conditions, according to a person with knowledge of the matter, who asked not to be identified because details of all the criteria aren’t clear. Tesla did manage to clear two of the most important hurdles: reaching a mapping and navigation deal with Chinese tech giant Baidu Inc., and meeting requirements for how it handles data-security and privacy issues.
Tesla has had issues with data management in China for a few years. The company’s vehicles were even banned by Chinese authorities at times in certain locations due to fear of spying related to the use of cameras on Tesla’s vehicles and its data management.
Several Chinese media are reporting today that this issue has now been solved.
Combined that with a conditional approval by regulators and a deal with China’s Baidu for mapping, which was already partnering with Tesla on maps in China, Tesla appears to be on track for a deployment of FSD in China.
Electrek’s Take
This is understandably making Tesla’s stock surge because after the US, Tesla has more vehicles in China than anywhere else, and that means more potential FSD customers than anywhere else.
If it can deploy its Supervised FSD in the market, it can recognize more revenue from those who bought the package and sell more of them.
It’s unclear how many people in China have already bought FSD, but it’s not likely many because of the lack of approval for the system – although Tesla does sit on more than $3 billion in unrecognized revenue primarily due to FSD. Some of that is from Chinese customers.