Tesla makes headway in China with Baidu deal
Tesla and Baidu team up in autonomous driving push
In a major development, electric vehicle pioneer Tesla has forged a strategic partnership with Chinese tech behemoth Baidu to leverage its mapping and navigation technologies in China. This move is a critical step in complying with regulatory requirements for foreign automakers selling smart vehicles in the world's largest auto market.
Elon Musk makes a surprise visit to Beijing
The announcement of the Tesla-Baidu collaboration comes on the heels of Tesla CEO Elon Musk's unexpected visit to Beijing, where he met with China's Premier Li Qiang. This visit took place amidst declining Tesla sales and growing data security concerns in the Chinese market.
By joining forces with Baidu, Tesla has effectively removed a significant hurdle in its quest to roll out and monetise its highly anticipated "full self-driving" advanced driver assistance system in China – the company's second-largest market after the United States.
High-definition mapping key to new initiative
Access to high-definition mapping is an indispensable component for autonomous driving features to function effectively. These systems rely on precise locational data and intricate terrain details to navigate safely and efficiently, making the partnership with Baidu a crucial enabler for Tesla's autonomous ambitions.
While Tesla vehicles have undergone data security compliance assessments by a Chinese industry group, this evaluation does not equate to official approval. Beijing maintains stringent regulations that require user data generated by self-driving technologies to be stored within China's borders.
Revenue boost on the horizon
By successfully deploying its full self-driving system in China, Tesla stands to reap significant benefits. Not only could this move dramatically increase the company's subscription revenues, but it also promises to differentiate Tesla's electric vehicles from an ever-growing pool of local competitors in the dynamic Chinese market.
Tesla stock price – technical analysis
Tesla’s shares were given a fresh boost by the news, building on an already-strong post-results rally.
The price has pushed on through the March highs, and now the next level to watch on the upside becomes the October low at $194, while just beyond this is the February high at $205.
A close above $175.73 today would mark a close above the 50-day simple moving average (SMA). This would be the first time this has happened since early January.
In the short-term, a close back below $175 would be a notable failure of bullish momentum.
