Tesla stock surges on 'watershed' 'Full Self-Driving' approval in China

Tesla (TSLA) stock soared on Monday following reports that CEO Elon Musk won Chinese approval to deploy the automaker’s "Full Self-Driving" (FSD) autonomous software on the mainland.

As was first reported by the Wall Street Journal, people familiar with the matter said that officials told Tesla that they had tentatively approved FSD in the country during Musk’s 24-hour visit to Beijing over the weekend.

Separately, Bloomberg earlier reported that Tesla will use Chinese tech company Baidu’s street-level mapping data to power FSD. Tesla had been previously using Baidu’s mapping data for satellite navigation in its cars. Working with a Chinese company helped with regulatory approval as data privacy and security risks are minimized, the reports said.

Tesla closed up 15.3%, hitting its highest levels since March 1. Tesla stock is now up nearly 40% in the past four trading sessions.

While pricing for FSD in China was not disclosed, in the U.S., Tesla charges $8,000 up-front for lifetime use (down from $12,000) and $99 a month for subscription services.

Adding FSD functionality in China is a big deal for the automaker not just for the added incremental revenue, but also in terms of the competitive edge it gives Tesla against rivals like NIO, Li Auto, XPeng, and even tech giants like Xiaomi, which is entering the auto market with semi-autonomous software of its own.

“What Tesla has to do is stay on the forefront of innovation. They have to be the most technologically advanced solution,” China expert Leland Miller of China Beige Book said to Yahoo Finance. “We have a domestic market that is saturated, and a price war going on … [Tesla] needs to stay on the top of the technological ladder.”