Tesla’s stock has seen a significant rise following reports that the company has overcome a key regulatory obstacle in China through a partnership with search giant Baidu.
This development comes after CEO Elon Musk’s surprise meeting with China’s second-ranking leader, Premier Li Qiang.
Analyst Daniel Ives from Wedbush described this as “a watershed moment,” highlighting the importance of Tesla’s progress in China and its self-driving technology ambitions.
Both Tesla and Baidu have not provided official comments on the reported partnership.
Ives acknowledged the challenges Tesla faces in China’s competitive electric vehicle market and softer demand but noted that the long-term valuation of the company hinges on gaining approval for fully autonomous driving.
The reported agreement with Baidu is expected to enable Tesla to advance its autonomous driving technology in China, leveraging Baidu’s mapping and navigation services.
However, full approval for autonomous driving is still pending.
Tesla, a major player in the global electric car market, views autonomous driving as a crucial aspect of its future.
However, challenges remain, as highlighted by the recent probe by the US auto regulator into Tesla’s autopilot system following several crashes and safety concerns.
Despite these challenges, Tesla’s share price surged nearly 12% in US markets on Monday, signaling investor optimism about the reported regulatory progress in China.
The company’s financial performance, particularly in China, is closely watched, with recent sales figures reflecting a decline attributed to increased competition and changing government incentives for electric vehicles.
Source-BBC
