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Elon Musk’s Tesla teams up with China’s Baidu for driver assistance

US EV carmaker moves closer to rolling out more autonomous driving features in world’s biggest auto market

Visitors look at a Jiyue 07 electric SUV from Geely and Baidu at the 2024 Beijing International Automotive Exhibition at the weekend. Phototgraph: Wu Hao/EPA

Edward White, Ryan McMorrow and Peter Campbell
Mon Apr 29 2024 - 10:38

Tesla is partnering with Chinese search giant Baidu to deploy mapping and navigation technology in China, as Elon Musk moves closer to rolling out more advanced driver assistance features in the world’s biggest auto market.

Tesla’s tie-up with Baidu came as Musk made a surprise visit to Beijing on Sunday. Musk met China’s number two leader, premier Li Qiang, as Tesla contends with declining sales and data security concerns.

With the deal with Baidu, the US electric vehicle (EV) maker has cleared an important regulatory hurdle. To operate smart vehicles in China, foreign companies are required to use one of about 20 approved Chinese suppliers of mapping and navigation systems, according to a person familiar with the matter.

Mr Musk’s ambitions to roll out more advanced self-driving technology in China have also been complicated by requirements to store locally the user data needed to improve its systems, which are largely developed in the US.

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On Sunday, Tesla’s electric vehicles were also included on a list of more than 70 car models tested for data security compliance by a Chinese industry group, signalling more official support for the industry.

Tesla had about 7.5 per cent of the EV market in China in the first quarter, and the country is already Tesla’s second-biggest market. But Musk has placed greater significance on rolling out and monetising Tesla’s autonomous driving technology as the company has wrestled with falling sales amid rising competition.

Tesla’s share price has fallen around 30 per cent in 2024, as it has lost ground to local rivals in China. The company has also been hit by a global slowdown in EV sales growth that has forced it to cut thousands of jobs. Tesla did not respond to a request for comment.

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Earlier this year, Tesla cut the monthly subscription price for its “full self driving” system, which can accelerate, steer and brake but is not strictly a fully autonomous technology, in the US. Musk has also talked about licensing its systems to other carmakers.

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“Going balls to the wall on autonomy is a blindingly obvious move,” Mr Musk wrote on X, his social media platform, earlier this month. Rolling out the technology in China, the company’s second-largest market, would dramatically increase its subscription revenues, as well as helping it differentiate its ageing cars against an increasing number of competitive electric vehicles from local manufacturers.

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Access to high-definition mapping is crucial for even a partially self-driving technology system to work. Autonomous systems rely on a combination of sensors, such as cameras or radar, that can see obstacles, as well as maps of the existing road network, to navigate.

To steer safely, vehicles need to know exactly where they are, often within millimetres, as well as the contours of the terrain around them.

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Tom Nunlist, an expert in Chinese technology regulation with Beijing-based consultancy Trivium, said that the industry group’s compliance testing did not amount to approval for Tesla.

“It’s not a certification. It’s not an approval. It’s just an assessment. This industry body is examining adherence by these companies to an emerging set of requirements on a voluntary basis,” he said.

Tesla did not respond to a request for comment. - Copyright The Financial Times Limited 2024

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