Tesla stock rises after CEO Musk scores key deals with China on weekend trip to Beijing
Tesla shares jumped as much as 18% on Monday after CEO Elon Musk met with a top Chinese government leader on Sunday in Beijing and reportedly received backing to roll out its advanced driver-assistance in the country.
Shares of Tesla jumped $25.66, or 15%, to $193.95 in afternoon trading after touching an intraday high of $198.87. Musk's visit to China comes just as the nation's carmakers are showing off their latest electric vehicle models at the Beijing auto show.
Chinese Premier Li Qiang told Musk that he hopes the U.S. will work more with China on "win-win" cooperation, citing Tesla's operations in China as a successful example of economic cooperation, China's state broadcaster CCTV said on its main evening news program. Officials told Tesla that Beijing is giving a tentative greenlight for the automaker to roll out its "full self-driving" software in China, according to the Wall Street Journal.
The much-needed stock boost comes as the automaker struggles with decelerating domestic EV sales and mounting competition.
For China, Musk is a welcome antidote to the tough talk from U.S. officials, which played out most recently during a visit by Secretary of State Antony Blinken. Li's remarks also reflect China's efforts to attract foreign investment to boost its flagging economy.
It wasn't clear whether Musk would visit the auto show, which runs through this week. Chinese automakers and startups have launched a bevy of electric cars in recent years, some going head-to-head with Tesla and undercutting the American maker on price.
But Musk's visit was more than just a show of support for China's fast-growing EV market, but an attempt to obtain approval to bring Tesla's full self driving software (FSD) to the country, reported Bloomberg.
Tesla has a major manufacturing base in Shanghai for both domestic sales in China and exports to Europe and other regions. It cut prices in China a week ago, dropping the Model 3 to 231,900 yuan ($32,700) and the Model Y to 249,900 yuan ($35,200), following similar reductions in the U.S.
Tesla's most productive plant
During their meeting, Musk told Li the Shanghai factory is Tesla's "most productive plant globally," reported Bloomberg, which also reported that Musk scored a mapping deal with Chinese tech giant Baidu, as well as data-collection clearance — two huge victories for the billionaire.
The surprise visit by Musk was a "watershed moment" for Tesla, Wedbush analysts Dan Ives, John Katsingris, Steven Wahrhaftig and Sam Brandeis, said in a research note.
"In a major moment for Tesla, Elon Musk made a surprise weekend trip to Beijing ... with a laser focus on cutting the ribbon on the long awaited rollout of FSD software and permission/approval to transfer data overseas," the analysts said.
"If Musk is able to obtain approval from Beijing to transfer data collected in China abroad this would be pivotal around the acceleration of training its algorithms for its autonomous technology globally. We also believe this trip will be significant for Tesla and Musk further strengthening its EV footprint within the Chinese market at a pivotal time," they added.
An earlier CCTV online report said that Musk had come at the invitation of the China Council for the Promotion of International Trade and met with its president, Ren Hongbin, to exchange views on further cooperation and other topics.
The European Union has launched an investigation into Chinese subsidies for the EV industry that could lead to tariffs on electric vehicles made in China, potentially including Tesla cars.
The green energy subsidies have helped transform the Chinese auto market, with EVs reaching about a quarter of new car sales last year, eating into demand for gasoline-powered vehicles.
Foreign automakers such as Volkswagen and Nissan are scrambling to develop new EV models to hold onto or claw back market share in China, the world's largest automobile market.