Tesla soars after Elon Musk wins approval for full self-driving (FSD) rollout in China; stock pops 16%

In a positive turn of events for Tesla, Elon Musk’s surprise visit to China over the weekend seems to have paid off big time for the electric car giant. Tesla’s stocks surged by more than 16% at the beginning of trading on Monday following Musk’s successful efforts to gain approval for its driver-assistance system, dubbed “Full Self-Driving” (FSD), in the world’s largest automotive market.

As of the time of writing, Tesla stock is currently trading at $195.24, a gain of 16.01 percent.

According to a report by The Wall Street Journal, Beijing has tentatively given the green light to Tesla’s plan to introduce FSD. This approval swiftly followed Musk’s unexpected visit to Beijing on Sunday, during which he met with Premier Li Qiang. Li had previously played a crucial role as the Communist Party chief in Shanghai during Tesla’s establishment of its car manufacturing plant there.

“After his flurry of meetings with top officials in Beijing, China’s government signaled its blessing for Tesla to roll out its advanced driver-assistance service in the carmaker’s second-biggest market. The Tesla chief executive is seeking to expand use of the controversial software feature globally as the company confronts the prospect of lower sales growth this year,” The Wall Street Journal reported.

Taking to X (formerly Twitter), Musk expressed his admiration for China while acknowledging the reciprocal support he receives from Chinese fans.

“I’m a big fan of China. I have to say that. I also have a lot of fans in China, well the feelings are reciprocated,” Musk said.

"I'm a big fan of China. I have to say that. I also have a lot of fans in China, well the feelings are reciprocated."

一 Elon Musk pic.twitter.com/ZrsQckpjEX

— DogeDesigner (@cb_doge) April 29, 2024

According to insiders, Tesla is teaming up with the Chinese tech behemoth Baidu to bolster its FSD with top-notch mapping and navigation software. But it’s not just about the tech; Tesla has had to jump through several regulatory hoops to ensure data security and privacy compliance, a must in China’s tightly regulated market.

Meanwhile, Musk’s visit has been dubbed a “watershed moment” by Wedbush Securities senior analyst Dan Ives, who sees this as a golden opportunity for Tesla, especially considering its recent struggles with declining revenue and stiff competition in the EV market.

“This could open up FSD in China, which I view as unlocking what really could be the golden opportunity for them,” Ives said. 

But amidst the celebrations, let’s not forget Tesla’s recent financial woes, with quarterly revenue taking a nosedive since 2020. With rivals nipping at its heels and demand taking a hit, Tesla has had to tighten its belt with a global workforce reduction. So, while the FSD approval in China is undoubtedly a win for Tesla, the road ahead may still be bumpy.