Tesla stock jumps on FSD China launch but it has to use Baidu just like Apple

After months of taking a beating, Tesla's stock price is finally shooting up on the news that the Chinese regulators may have greenlit the launch of FSD there.

Instead of a scheduled visit to India, Elon Musk made unannounced trip to Beijing yesterday, meeting with the prime minister.

Apparently, the discussions were fruitful, and insiders report that China has agreed to allow the Full Self-Driving (Supervised) service on its roads.

Grace Tao, the VP for China, even hinted that Tesla may also plan to launch the Robotaxi and CyberCab ride-hailing service there:

Autonomous Driving technology is revolutionizing the industry, becoming a key driver for new productivity growth in the new energy vehicle sector... This model not only increases vehicle utilization but also helps alleviate urban traffic congestion and reduce environmental pollution.

As has become customary, however, all data has to stay local and, above all, Tesla can only use the mapping services of the local search giant Baidu.

Apple has reportedly been forced to do something similar, entering a partnership to integrate Baidu's chatbot Ernie Bot on its iPhone in China with the iOS 18 update, instead of its own AI.

While Baidu offers the only proper mapping service in China, as Google Maps is blocked there, Elon may have agreed to whatever local authorities demanded in terms of data collection and privacy safeguards.

Tesla, along with other vehicle autonomy service providers like BYD and NIO, have now passed all four data security requirement tests, announced China's Association of Automobile Manufacturers.

The CEO of XPeng, one of the local automakers that already have a self-driving service up and running for its cars in China, welcomed the competition, praising Tesla's solution:

Today quite a few friends asked me what I think about FSD entering China, and I am especially welcoming Tesla FSD entering China... Considering our own progress, I think large models will accelerate driverless deployment by at least 3 years, and fully autonomous driving is also one of the best business scenarios for the large models.

Armed with the permission to gather "sensitive personal information" and the mandate to use Baidu for mapping and navigation, Tesla can now apparently launch FSD in China whenever it is ready.

Its stock price reacted very positively on the news and shot up more than 10% in premarket trading.

Tesla is also running FSD 12 demos for transportation authorities in Europe, and one local regulator said they managed to test it for 45 minutes with just one interference.