Tesla shares rose yesterday as Elon Musk moved a step closer to launching self-driving cars in China.
In a much-needed boost, the electric vehicle maker’s billionaire boss has struck a sailing deal with Chinese tech company Baidu.
It also agreed to terms on how the US group handles data privacy and security issues.
Overcoming the two major hurdles came during a surprise visit to Beijing, where Musk met with Chinese Premier Li Qiang to discuss the auto industry.
Tesla shares rose more than 15 percent yesterday.
Moving forward: Tesla boss Elon Musk (pictured) has struck a boating deal with Chinese tech company Baidu
The company has been looking to deploy its autonomous vehicles in China, its second-largest market globally, and convince authorities to transfer data collected in the country abroad to train algorithms.
Musk, 52, said Tesla was willing to cooperate to “achieve more win-win results.” The group previously attempted to reassure Chinese authorities by establishing a data center in Shanghai in 2021.
The stock price rally follows a tough few weeks for Tesla, which is cutting 10 percent of its workforce as it battles weak demand for electric cars.
Musk’s whirlwind visit also came just days after U.S. regulators said a three-year investigation into Tesla’s Autopilot mode had identified at least 13 crashes in which the feature had been involved.
Dan Ives, a technology analyst at Wedbush, was optimistic about the automaker’s future.
“While there are demand challenges in China for Tesla, Wall Street is looking at this painful transition period for a long-term growth story to emerge for Musk, with fully autonomous driving a key ingredient in that recipe for success,” said.
Danni Hewson, head of financial analysis at broker AJ Bell, said: “Elon Musk gets a lot of criticism, but the only thing he seems to get right are those delicate handshake moments.”
“Its cutting-edge autonomous technology is likely what keeps Tesla cars ahead of other electric vehicles.” [electric vehicles] and allows the American company to charge a premium for its models.’
He added: “Getting that technology approved for Chinese drivers will be a crucial part of the company’s next difficult chapter and Mr. Musk has taken some important steps to make that happen.”