Shares of Tesla rose as much as 18% on Monday after CEO Elon Musk met with a top Chinese government leader in Beijing on Sunday and reportedly received support to roll out its advanced driver assistance systems in the country.
Shares of Tesla rose $25.66, or 15%, to $193.95 in afternoon trading, after hitting an intraday high of $198.87. Musk's visit to China comes just as the country's automakers are showing off their latest electric car models at the Beijing auto show.
Chinese Premier Li Qiang told Musk he hopes the US will work more with China on a “win-win” partnership, citing Tesla's operations in China as a successful example of economic cooperation, Chinese state broadcaster CCTV said on his main evening news program. Officials told Tesla that Beijing is tentatively giving the automaker the green light to roll out its “fully self-driving” software in China. according to to the Wall Street Journal.
The much-needed stock boost comes as the automaker struggles causing domestic sales of electric cars to decline and increasing competition.
For China, Musk is a welcome antidote to the tough talk from US officials, which recently occurred during a visit by Secretary of State Antony Blinken. Li's comments also reflect China's efforts to attract foreign investment to boost its weak economy.
It was not clear whether Musk would attend the car show, which runs this week. Chinese automakers and startups have launched a slew of electric cars in recent years, some of which took on Tesla and undercut the U.S. manufacturer on price.
But Musk's visit was more than just a show of support China's fast-growing EV marketbut an effort to gain approval to bring Tesla's full self-driving software (FSD) to the country, Bloomberg reported.
Tesla has a major manufacturing base in Shanghai for both domestic sales in China and exports to Europe and other regions. A week ago it cut prices in China, dropping the Model 3 to 231,900 yuan ($32,700) and the Model Y to 249,900 yuan ($35,200), following similar cuts in the US.
Tesla's most productive factory
During their meeting, Musk told Li that the Shanghai factory is Tesla's “most productive factory in the world,” Bloomberg reported, which also reported that Musk scored a mapping agreement with the Chinese technology giant Baiduas well as approval for data collection – two huge wins for the billionaire.
Musk's surprise visit was a “turning point” for Tesla, Wedbush analysts Dan Ives, John Katsingris, Steven Wahrhaftig and Sam Brandeis said in a research note.
“In a key moment for Tesla, Elon Musk made a surprise weekend trip to Beijing… with a laser focus on cutting the ribbon on the long-awaited rollout of FSD software and permission/approval to transfer data abroad,” said the analysts.
“If Musk can get permission from Beijing to transfer data collected in China abroad, it would be critical to accelerating the global training of his algorithms for his autonomous technology. We also believe that this trip will be of great importance for Tesla and Musk to further strengthen its EV. footprint within the Chinese market at a crucial time,” she added.
An earlier online CCTV report said Musk had come at the invitation of China's Council for the Promotion of International Trade and met with its president, Ren Hongbin, to exchange views on further cooperation and other topics.
The European Union has launched an investigation into Chinese subsidies for the EV industry that could lead to tariffs on electric vehicles made in China, including possibly Tesla cars.
The green energy subsidies have helped transform China's auto market, with electric vehicles accounting for about a quarter of new car sales last year, hitting demand for gasoline vehicles.
Foreign automakers such as Volkswagen and Nissan are scrambling to develop new EV models to hold or regain market share in China, the world's largest auto market.
