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Musk makes surprise China visit in search of Tesla revenue boost

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Tesla Inc.’s Elon Musk made an unannounced trip to China on Sunday, seeking approval for driver-assistance software that could help arrest the carmaker’s revenue decline.

The Tesla chief executive officer met with Premier Li Qiang, who as the Chinese Communist Party secretary for Shanghai helped the company set up what is now its top plant globally.

Musk was expected to meet officials about rolling out the system Tesla markets as Full Self-Driving, or FSD, a person with knowledge of the matter said. While the suite of features require constant supervision and don’t make Teslas autonomous, the company generates incremental sales in the U.S. by charging $8,000 to buy FSD outright, or $99 a month for a subscription.

Getting the green light from China for FSD could be complicated by sensitivities around the cameras that Tesla’s driver-assistance system relies on, as well as concerns about the safety of the company’s technology.

Tesla’s vehicles have been banned from China’s military compounds and some other government venues in the past over data-collection concerns. The U.S.’s top auto-safety regulator also just opened a probe into the company’s less-capable Autopilot system, citing 20 crashes that have occurred since December involving vehicles that received an over-the-air software update.

Tesla is coming off its first year-over-year decline in quarterly revenue since 2020, having sold fewer cars even after slashing prices. The company is cutting headcount by at least 10% and looking to accelerate new models, including less-expensive vehicles, that could be ready by early 2025, if not before year-end, Musk said last week.

 

China’s No. 2 official met Musk in Beijing hours after the billionaire touched down in the city. Li said the nation is always open to foreign companies, adding that Tesla is a successful example of China-U.S. cooperation, according to China Central Television.

Musk is paying a visit to China shortly after postponing a trip to India that was going to include a meeting with Prime Minister Narendra Modi. The CEO called off his journey on short notice, citing “very heavy Tesla obligations.”

Musk told Li that Tesla is willing to deepen cooperation with China, CCTV said. The CEO earlier met the head of the China Council for the Promotion of International Trade, Ren Hongbin, according to the broadcaster.

Advanced driver-assistance systems are becoming increasingly common in China, where Tesla is losing share of the EV market. Many local players including Xpeng Inc., Xiaomi Corp. and Huawei Technologies Co., use such features as a selling point for vehicles.

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