Shares of Tesla rose sharply in U.S. premarket trading on Monday after the electrical automobile maker reached a key milestone in rolling out its full autonomous driving technology in China.
The company's stock price rose greater than 12% around 8:30 a.m. ET as investors reacted to news surrounding Tesla CEO Elon Musk's visit to China.
Tesla said on Sunday that local Chinese authorities had lifted restrictions on its cars after they met the country's data protection requirements.
The move raised expectations that Tesla's Full Self Driving (FSD) driver assistance software would soon be available within the country, which is the most important marketplace for electric vehicles.
Although Tesla's electric cars are amongst the most well-liked vehicles in China, also they are They were reportedly banned from some government-related properties For data protection reasons.
Separately, the Biden administration announced earlier this yr an investigation into whether cars imported from China pose a national security risk due to their ability to gather potentially sensitive data.
FSD is an upgrade to Tesla's Autopilot driving assistant. Tesla has offered its FSD technology in China for years, but with a limited feature set that limits it to operations reminiscent of automatic lane changing.
Data security concerns were a serious obstacle stopping Tesla from fully rolling out the system in China.
Tesla has also reportedly struck a take care of Baidu that will give Musk's company access to the Chinese web giant's mapping and navigation technology for Tesla's FSD feature.
The agreement would allow Tesla to access Baidu's mapping services license, which is a requirement for intelligent driving systems to work on public roads in China, Reuters reported, citing two anonymous sources conversant in the matter.
CNBC couldn’t independently confirm the report. Tesla and Baidu weren’t immediately available for comment.
With the license, which foreign corporations can only obtain in collaboration with local Chinese firms, Tesla FSD can legally operate on Chinese roads and its fleets can collect data about traffic, road signs and routes.
Tesla's breakthrough in bringing its FSD self-driving technology to China is a serious achievement for the corporate at a time when it faces stiff competition within the Chinese market. Local rivals reminiscent of Warren Buffett-backed electric vehicle maker BYD, Nio and Xpeng have stepped up their competition with Tesla lately.
BYD was temporarily the world's largest electric vehicle manufacturer, producing greater than 3 million latest energy vehicles in 2023. The company recently lost its title because the world's largest electric vehicle maker after first-quarter sales plunged 43%.
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