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Tesla in China: Robo-taxi plans and data security compliance

Tesla progress delayed as Musk prioritizes xAI
Tesla progress delayed as Musk prioritizes xAI

Tesla has been making significant strides in China’s electric vehicle (EV) market. Chinese authorities removed restrictions on Tesla’s cars after it passed the country’s data security requirements. 

Now, Elon Musk also wants to test the self-driving feature in robo-taxis in the country. Musk met with Premier Li Qiang while attending the Beijing Motor Show, which took place from April 25 to May 5. 

Tesla’s robo-taxi proposal

As reported by the state-run China Daily, officials told Musk that China “welcomes Tesla to do some robo-taxi tests in the country.” 

Meanwhile, the South China Morning Post reports that Musk’s visit to Beijing fuels speculation that Tesla’s Full Self-Driving (FSD) software would be widely implemented in China. The service costs $99 a month in the US. 

What does this mean for Tesla’s robo-taxi endeavors? According to Wedbush Securities managing director Dan Ives, “China is the heart and lungs of the Tesla growth story.” He says adding robo-taxis to the mix is the first step in “altering full self-driving in China.”

“Obviously navigating challenges the next few quarters, but the golden goose is autonomous and FSD,” Ives says. “And China plays a key role there. This is a major shift to what we’ve seen over the last six to nine months. Musk continues to play well in that sandbox in Beijing.” 

“It would be a historical moment.” 

China’s data security requirements

Chinese authorities recently removed data security restrictions on Tesla’s cars after it passed the country’s stringent requirements. Speaking to China Daily, automotive industry expert Mark Rainford says “it’s a good thing.” 

“It’s one more domino knocked down in order for them to be able to potentially get the data from those cars out to America.” Since China is Tesla’s second-largest market, there are more than enough cars to get training data from. 

“[Tesla has this] supercomputer that is currently learning how to teach autonomous cars based on what it sees. So it’s looking at how humans react to certain situations on the road,” he explains. 

For the last three years, data from cars in China had to be stored locally in Shanghai. Any transfer to the United States was prohibited. These restrictions were put in place in 2021 to prevent the potential of spying. 

At the time, Musk said Tesla had to be “very confidential with any information. If Tesla used cars to spy in China or anywhere, we will get shut down.”

Tesla layoffs

These developments follow after the Tesla layoffs impacted more than 10% of its workforce. Key personnel were also let go, including team lead Will Jameson, director of the supercharger group, Rebecca Tinucci, and head of new products, Daniel Ho.

Following Tesla’s Q1 financials, which showed a 55% drop in revenue, Musk simply said Tesla had to be “absolutely hard-core” in implementing cost-cutting measures.

ALSO READ: Tesla shifts to affordable cars amidst profit plunge

Tesla also recalled nearly 3,900 Cybertrucks due to a “potentially dangerous flaw” in the accelerator pedal design. 

About the author

Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.

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