Elon Musk’s ‘sudden visit’ to China may not have been unplanned after all. Within a day of his visit, Musk agreed to partner with China’s tech giant Baidu to bring FSD (full self-driving) capabilities to Tesla vehicles in China. Coincidentally, just last week, Elon Musk postponed his visit to India owing to ‘very heavy Tesla obligations’. 

The announcement comes after four years of FSD, the autopilot software mode, rolling out in the US market, with China initially denying permission to the automaker owing to regulatory and data collection issues. The new move fortifies Tesla’s presence in its second-largest market in the world, which accounts for 33% of global sales. 

Not just that, it’s also been four years since Tesla first partnered with Baidu. 

The Key Automobile Player

In early 2020, Tesla partnered with Baidu for in-car mapping and navigation in China. Baidu’s navigation map is used across Tesla’s vehicles in China. 

With a restriction of foreign companies (outside China) requiring to partner with domestic companies that have mapping qualification license for all intelligent driving systems, Baidu has been a key player in the automobile segment. 

The company partnered with a number of major automobile companies including Audi, BMW, Ford, Mercedes-Benz, Toyota, Volvo, Hyundai and others, and not all of them were for simply entering the Chinese market. The collaborations focus on technology development especially in the realm of autonomous driving. 

Companies such as Audi, Volvo and JLR partnered with Baidu to facilitate research and testing on autonomous vehicles in various environments. 

Baidu’s open-source platform for autonomous driving, Apollo, already has over 100 partners worldwide. The platform provides hardware and software solutions including cloud data services and companies can leverage Baidu’s AI algorithms and mapping data. 

Baidu had started an R&D division in the US in 2014 and has a separate wing for ‘intelligent driving’. In a past interview with Fred Fishkin, Helen Pan, general manager of Apollo Autonomous Driving, USA, said, “For Baidu Apollo USA we’re focused on our self-driving technology and we are developing this new technology to bring mobility to the society and to the people who provide driverless technology to all.” 

Interestingly, the testing for this self-driving technology is happening in China. “It’s taking place in three cities, Wuhan, Chongqing, and Beijing,” said Pan. 

Interestingly, there were reports of Tesla collaborating with Baidu Apollo to bring its fully autonomous robotaxi in China before the US. Baidu’s Apollo Go, is already operating 24/7 autonomous driving service in select areas. 

In India, the expansion of EV is led by Chinese manufacturers. EV giant BYD looks to seize 90% of the country’s EV market. Surprisingly, BYD, which had a partnership with Baidu, decided to opt out of the deal after a year. Last year, BYD decided to make its own intelligent driving technology. 

Baidu: The Internet Company 

Automobiles may be an important wing for Baidu, but the company was predominantly known for its search engine, which was introduced in 2000. It accounts for over 51% of search traffic in China. The company also claims to be an early adopter of AI (in 2010) to improve content discovery. 

Further, Baidu has been taking huge strides in the generative AI race with its Ernie chatbot, with Ernie 4.0 said to be on par with GPT-4. 

US Remains Stringent

While automobile companies are flocking to collaborate with Baidu, apprehensions in the US continue. 

Investor and entrepreneur Vinod Khosla, in a recent interview with Hamza Choudery, co-founder of Autoblocks AI, spoke about how regulation is a good thing. “It’s never by itself, the complete solution or sufficient, what I’d say is it can help slow China down and accelerate us. Banning the latest NVIDIA chips into China – that’s a really good idea. Not giving them access to state-of-the-art models is a big idea,” said Khosla.  

While such discussions continue, Musk continues to advance Tesla’s growth outside the US. 

Source: X

Tesla Cruises into China

In addition to soaking in the scenery in Beijing, Musk made all the crucial moves that will benefit Tesla in China. After meeting Li Qiang, the Premier of the People’s Republic of China, the China Association of Automobile Manufacturers announced that Tesla passed Beijing’s data security tests. 

This will also remove restrictions on Tesla vehicles in certain markets in China. 

Source: X

The latest announcement further strengthens Tesla’s already existing partnership with Baidu, with the permission to transfer data overseas. Further, Tesla can gather data about the vehicle’s surroundings including road layouts, traffic signs and nearby buildings, a step for further data collection and cater to fit Tesla’s future roadmap in the Chinese market. 

While Tesla’s strengthened partnership with Baidu will allow data collection, there is no confirmation on whether this data will be owned by Tesla or Baidu.  

The visit and collaboration announcement also comes at a time when Tesla is planning to layoff over 690 workers from its facility in Nevada.