Elon Musk’s Tesla and Baidu join forces to build cars that will drive themselves in China

Companies building self-driving cars for Chinese roads must obtain a mapping qualification

Elon Musk’s Tesla has reportedly joined hands with Chinese internet giant Baidu for data collection on China’s public roads to develop its full self-driving (FSD) system.

As part of the deal, Tesla would also gain data to build a lane-level navigation system for its self-driving feature for Chinese roads, Reuters reported.

The deal came as Mr Musk made a surprise visit to China on Sunday and met with the country’s premier Li Qiang, as he sought government approvals for rolling out the FSD software in China.

Though Tesla launched its FSD system four years ago, it has still not been made available in China – the EV maker’s second-biggest market.

Companies looking to build self-driving cars in China must obtain a mapping qualification, for which foreign firms may need to team up with domestic partners.

With Baidu’s mapping service, Tesla can legally operate its FSD software on roads in China.

Tesla’s Model 3 and Y EVs are now among the cars tested and found to be compliant with China’s data security obligations.

“It is good to see electric vehicles making progress in China. All cars will be electric in the future,” Mr Musk wrote on X.

Tesla’s latest developments come as the company’s stocks have taken a hit since the beginning of the year, with its profits dropping by nearly 20 per cent in the first quarter compared to the same period last year.

The company’s revenue decline is partly due to the price cuts it enforced since the beginning of this year, including the slashing of nearly a third of the price of its FDS system in the US from $12,000 to $8,000.

The EV giant has promised “new vehicles, including more affordable models” with their production expected to begin in “early 2025, if not late this year”.

Though Mr Musk promised in 2019 that there would be a fleet of Tesla robotaxis on the road in 2020, this idea has yet to materialise.

Contrary to its name, the FSD system still cannot drive Tesla cars by itself so drivers must remain alert and be ready to intervene.

Industry experts say Mr Musk’s surprise visit to China could help Tesla improve its FSD with more data on Chinese roads and traffic.

“If Musk is able to obtain approval from Beijing to transfer data collected in China abroad this would be a ‘game changer’ around the acceleration of training its algorithms for its autonomous technology globally,” Equity analyst Dan Ives said, according to Reuters.

Following Mr Musk’s brief visit, the Chinese premier called Tesla’s operations in China a successful example of the country’s economic cooperation with the US.