Elon Musk Visits China to Discuss Tesla Cooperation Amid Competitive EV Market

On April 28, 2024, Tesla CEO Elon Musk arrived in Beijing, China, for his second visit in less than a year. Musk met with Ren Hongbin, the head of the China Council for the Promotion of International Trade, to discuss next steps in cooperation and other topics amid a fiercely competitive electric vehicle (EV) market in China, the world's biggest market for EVs.

Musk is seeking to meet senior Chinese officials to discuss the rollout of Tesla's Full-Self Driving (FSD) software in China and to obtain approval to transfer data collected in the country abroad to train algorithms for its autonomous driving technologies. Tesla has been required by Chinese regulators to store all data collected by its Chinese fleet in Shanghai since 2021 and has not transferred any back to the United States.

Why this matters: Tesla's efforts to expand its FSD technology in China and gain approval for overseas data transfers highlight the complex regulatory landscape for foreign automakers operating in the country. The outcome of Musk's discussions could have significant implications for Tesla's competitiveness and the development of autonomous driving technologies in the world's largest EV market.

Musk's visit coincides with a cut-throat price war between firms in China's EV market. China's local car giant BYD beat Tesla in the fourth quarter of 2023 to become the world's top seller of EVs, though Tesla reclaimed that title in the first quarter of 2024. Rival Chinese automakers such as Xpeng have been seeking to gain an advantage over Tesla by rolling out comparable autonomous driving software.

Tesla has extensive business interests in China, and Musk's most recent visit was in June 2023. The company has sold more than 1.7 million cars in China since entering the market a decade ago, and its factory in Shanghai is its largest globally. However, Tesla is also going through a major job cull and losing key executives, while reducing prices of its EVs in critical markets like the US and China.

Musk's visit was not publicly announced, and he did not have a booth at the ongoing Beijing auto show this year. In response to a query on social media platform X, Musk said Tesla may make FSD available to customers in China "very soon." The timing of the visit also comes just over a week after Musk scrapped a planned visit to India to meet with Prime Minister Narendra Modi, citing "very heavy Tesla obligations."

Key Takeaways

• Elon Musk visits China to discuss Tesla's FSD software and data transfer approval.
• Tesla faces a competitive EV market in China, the world's largest EV market.
• Musk's visit coincides with a price war between EV firms in China.
• Tesla has extensive business interests in China, including its largest factory globally.
• Musk's visit was not publicly announced, and he did not attend the Beijing auto show.