Since the beginning of this year, Tesla has been in the eye of public opinion storm due to constant turmoil.
According to financial report data, Tesla's revenue in the first quarter of 2024 was $21.3 billion, a year-on-year decrease of 8.69%, the largest revenue decline in 12 years; The net profit was 1.13 billion US dollars, a year-on-year decrease of 55%. Tesla's stock price also fluctuated significantly as a result. On the day before the release of the first quarter report, Tesla's stock price dropped as low as $138.8 per share.
Tesla CEO Elon Musk recently chose to visit China in a low-key manner. A reporter from China Business Daily learned that on the afternoon of April 28th, Musk arrived in Beijing in a low-key manner; At noon on April 29th, Musk took a private plane back to the United States. Within less than 24 hours of being in China, Tesla has achieved fruitful results, with the most significant breakthrough being becoming the first foreign-funded car company in China to comply with national standards for automotive data security. In the eyes of the outside world, Tesla's fully autonomous driving software (FSD) is also expected to accelerate its landing in China.
"We are honored to participate in the rapid development of China's new energy vehicle industry." Tesla China stated that it will continue to deeply cultivate in China, jointly develop with the industry in fields such as artificial intelligence, electric vehicles, and energy storage, accelerate the landing of clean energy and autonomous driving technology, and turn the beautiful vision into reality.
It is worth mentioning that after Musk's "flash" of China, Tesla's stock price has rebounded to $184.2 per share as of the close on May 6th, up about 32.71% from its previous low. In an instant, Tesla's market value surged by about 145 billion US dollars (1047.952 billion yuan), exceeding one trillion yuan.
Compliance requirements for automotive data security
The reporter learned that Musk's unexpected visit to China this time was mainly to discuss the launch of fully autonomous driving (FSD) software in China and seek approval. At the same time, it may seek approval to transfer the data collected in China to foreign countries for training autonomous driving technology algorithms.
After arriving in Beijing, Musk expressed his pleasure at seeing progress in electric vehicles in China, and that all cars in the future will be electric. The Tesla Shanghai Superfactory is Tesla's best performing factory, thanks to the hard work and wisdom of the Chinese team. Tesla is willing to further deepen cooperation with China and achieve more win-win results.
Regarding Musk's visit to China, on April 29th, Lin Jian, spokesperson for the Ministry of Foreign Affairs, stated that China is committed to high-quality development, firmly adheres to an open strategy of win-win cooperation, continues to build a first-class business environment that is market-oriented, legal, and internationalized, actively promotes foreign investment, attaches great importance to the relevant demands of foreign-funded enterprises, and effectively protects the legitimate rights and interests of foreign-funded enterprises. "We treat domestic and foreign enterprises equally and treat them equally. We welcome foreign-funded enterprises to continue deepening cooperation with China and sharing the fruits of China's economic development. We also hope that foreign-funded enterprises will comply with China's laws and regulations and fulfill their security commitments."
It is worth mentioning that on the day Musk arrived in China, the China Association of Automobile Manufacturers and the National Computer Network Emergency Technology Coordination Center issued a notice on the testing of four safety requirements for automotive data processing (first batch), and Tesla was listed as the only foreign-funded enterprise that met compliance requirements. Tesla's domestically produced Model 3 and Model Y also meet automotive data security compliance requirements.
It is reported that in order to standardize automobile data processing activities, the China Association of Automobile Manufacturers and the National Computer Network Emergency Technology Coordination Center, in accordance with relevant regulations and in accordance with the principle of voluntary inspection by enterprises, will organize inspections of the data security compliance of new intelligent connected vehicles launched by automobile manufacturers for the years 2022-2023 starting from November 2023. This includes four compliance requirements: anonymization processing represented by facial information outside the vehicle, default not collecting cabin data, cabin data in car processing, and significant notification of personal information processing.
Tesla China has announced that various regions have gradually lifted restrictions on intelligent connected vehicles such as Tesla. "We believe that authoritative institutions' inspection and testing of market sales vehicles' data and personal information protection in accordance with relevant laws and regulations on automotive data will help enhance public trust in data applications, promote the improvement of data security levels for automotive companies and the entire industry, increase the importance of automotive companies' compliance with product data processing, better utilize data resources, and promote industrial development."
It is reported that Tesla has achieved localized data storage at its Tesla Shanghai data center in 2021. In addition, Tesla has introduced third-party authoritative organizations to review the company's information security management system and has passed the security management system certification (ISO27001).
"Paying attention to data security is not unique to China, and European and American countries also attach great importance to data security. In contrast, I think China has designed data security (standards) more systematically so far." Gong Min, the research director of UBS China's automotive industry, said in an interview with reporters that in the field of autonomous driving, Tesla dominates the US market, while the Chinese market is diverse and competitive, both leading the latest development direction of the global autonomous driving industry.
According to a research report by CICC, if Tesla FSD is to be promoted in China, the entire data loop needs to be in China, and preparations need to be made in data collection and model training to consider whether the BEV perception scheme can be well localized and adapted. In China, FSD mapping may require cooperation with Chinese manufacturers, and Tesla needs to establish a local computing center and form a local algorithm adaptation team.
FSD's entry into China will generate a "catfish effect"
At present, Tesla FSD has entered the V12.3 phase. In March, Tesla pushed FSDV version 12.3.1 to North American car owners, introducing end-to-end neural network technology. This technology uses deep learning of driving data from over a million vehicles and artificial intelligence technology to influence vehicle control, such as operating steering wheel pedals, turn signals, etc., rather than hard coding every driving behavior, marking another leap for Tesla in the field of autonomous driving.
Tesla has stated that it will not disclose the subscription rate of FSD at the moment, but in terms of pricing, Tesla acknowledges that FSD has a huge value for cars, and the current selling price offered by Tesla is actually similar to the value of "options". The implication is that the current price of FSD is not considered expensive.
On April 23rd, Tesla just released its Q1 2024 report, with revenue of $21.3 billion, a year-on-year decrease of 8.69%, the largest revenue decline in 12 years; The net profit was 1.13 billion US dollars, a year-on-year decrease of 55%. Meanwhile, during the reporting period, Tesla delivered a total of 387000 vehicles, a year-on-year decrease of 8.3%. This is Tesla's first year-on-year decline since the second quarter of 2020.
In contrast, FSD's revenue has increased year-on-year, indicating that FSD will become Tesla's "profit cow" in the future. Tesla stated that the company has been investing in the hardware and software ecosystem needed to achieve autonomous vehicle driving. The company believes that through a pure visual architecture based on end-to-end neural networks with billions of miles of real-world data, scalable and profitable autonomous businesses can be achieved.
In April, Musk also stated on social media that Tesla may soon provide FSD to Chinese customers. Tesla's competitors in China, such as Xiaopeng Motors, are also launching similar autonomous driving assistance products to gain an advantage over Tesla.
On April 29th, He Xiaopeng, Chairman of Xiaopeng Motors, publicly stated that "Tesla has excellent autonomous driving technology and brand, and welcomes Tesla FSD to enter China. Only with more good products and technologies can the entire market and customers have a better experience, and the market can develop healthily and accelerate."
The reporter noticed that Tesla FSD's cumulative mileage data can be said to be far ahead. According to the financial report, as of the first quarter of 2024, the total actual road mileage of FSD has reached 1.25 billion miles (approximately 2 billion kilometers). Tesla expects that at current speeds, the cumulative mileage of FSD is expected to reach 2 billion miles by the end of May and 6 billion miles within a year.
Gong Min believes that in the field of autonomous driving, Tesla dominates the US market, while the Chinese market is diverse and competitive, both leading the latest global development direction. "At present, top overseas electric vehicle companies definitely have advantages, with a huge amount of data collection and feedback retention being their advantage. However, this is an era of competition promoting rapid innovation and iteration, so I have greater confidence in the development of China's autonomous driving industry."
Zhang Xiang, a visiting professor at the Yellow River University of Science and Technology, told reporters that Tesla was one of the earliest companies to develop autonomous driving, and the algorithm accuracy of FSD is relatively high. But Tesla mainly collects FSD training data in North America, but the road conditions in China are more complex than in the United States, with more pedestrians on the road, which increases the difficulty of using FSD. In the future, FSD will need to spend a lot of time debugging and optimizing after entering the Chinese market.
"Autonomous driving is ultimately a software technology that requires constant trial and error, even in real-life scenarios. In actual traffic accidents, if liability is divided for autonomous driving, how insurance companies guarantee it, and so on, these issues still need time to clarify." Zhang Xiang further stated.