Chinese Effect: Tesla Stock Soars!

The CEO of Tesla met with China’s number two during a surprise visit to Beijing to discuss autonomous driving.

The meeting between Elon Musk and Premier Li Qiang is all the more notable as it takes place during the Beijing Auto Show, where Chinese automakers are promoting their latest electric models.

This visit aimed to reach an agreement on Tesla’s use of a Chinese mapping software. Nothing extraordinary at first glance, but it is a major regulatory requirement for deploying Tesla’s autonomous driving solution in China.

According to Reuters, citing two sources close to the matter, Tesla has struck a deal with Chinese tech giant Baidu to use its mapping license for data collection on Chinese public roads, thus removing the obstacle. And what does China get in return? Tesla has established its largest foreign factory in Shanghai, where about half of its vehicles are produced. This way, the Middle Empire ensures that its valuable technology remains under control within its territory, and that the dollars flowing from Tesla are not at risk of being cut off by another country. Coincidence or not, this American entrepreneur’s trip comes a week after the last-minute cancellation of a planned visit to India to meet Prime Minister Narendra Modi. Musk had previously cited heavy obligations towards Tesla. We now know almost for certain what those were…

In the end, this brief trip to China was certainly not a bad idea, as Tesla’s stock jumped nearly $30 in 24 hours to reach $198 before stabilizing around $194 and correcting a month of continuous decline fueled by strategic hesitations and layoffs.