China Contemplates Utilizing Tesla's FSD Deployment as Bargaining Chip in Trade Discussions
In the realm of Elon Musk's business empire, there's been a lot of buzz about how his close affiliations with the new Trump administration could impact Tesla's fortunes. On one hand, President Trump might ease regulations, granting even more government contracts to SpaceX. Yet, markets favorable to the EV industry but hostile towards the administration's politics are showing signs of disdain for Tesla, causing concerns.
Another concern arises as China deliberates on utilizing Tesla as a pawn in trade negotiations. Tesla's car sales remained flat in 2024, and to maintain its astronomical valuation, Musk has invested heavily in autonomous technology. He sees this as a more lucrative opportunity than the traditional business of car sales, with plans for autonomous "Cybercabs." Despite rolling out its Full-Self Driving (FSD) tech, China has yet to allow Tesla to implement this technology in the country.
Chinese authorities are considering withholding Tesla's autonomous driving license as a bargaining chip in trade negotiations with the U.S., reportedly hoping for a significant breakthrough or concession in trade talks to expedite the approval[1][3][5]. From the Financial Times:
Chinese officials are contemplating using Tesla's autonomous-driving license approval as a negotiation tool. The delay in granting permission is primarily due to this reason, adding that a swift consent is unlikely unless there's a major breakthrough or concession in trade talks.
In China, competitors like BYD have been gaining ground selling affordable EVs, which lessens the need for Tesla's presence in the country. President Trump may have an incentive to support Musk, given Musk's backing of his super PAC and his role in promoting Doge versus DEI and government elites[2].
Tesla cannot train its AI systems in China due to export restrictions, but it's been preparing by training its AI on publicly available US footage of Chinese streets[1]. Musk has long promised full autonomy, but he's consistently missed his own deadlines, with limited rideshare services scheduled for Austin in the near future[3].
Musk's support for rolling back EV incentives, including tax credits that have benefited his company, raises eyebrows. Critics suggest he may be motivated by Tesla's lesser dependence on these incentives compared to competitors not yet near profitability[4].
So here we are, living in Musk's world, questioning how much of the next four years will be influenced by his requirements.
- Amidst the speculations about Tesla's future, Elon Musk has placed his bets on autonomous technology, envisioning a fleet of "Cybercabs" for 2024, despite the current adversely affecting negotiations with Chinese authorities over the approval of its Full-Self Driving technology.
- The future of Tesla in the tech sector appears to be intertwined with the 2024 negotiations, as Chinese authorities consider withholding autonomous driving licenses as a bargaining chip in trade talks, potentially impacting Musk's plans for cybercabs adversely.
- Tesla's close affiliations with the Trump administration might help in easing regulations, but the market's disdain towards the administration's politics, along with negative trade negotiations with China, could adversely affect Tesla's future sales and valuation.
- In the realm of tech and future vehicle innovations, Tesla's 2024 plans, dependent on the successful implementation of Full-Self Driving technology, are under intense scrutiny, with the outcome of negotiations playing a pivotal role in shaping the company's trajectory.