The success of Tesla’s autonomous vehicle ride-hailing service, robotaxi, is considered a crucial driver for the company’s next growth phase. This success increasingly relies on the Chinese government’s support and regulatory role.
Chinese authorities have been actively supporting the autonomous driving industry by easing regulations and indirectly assisting companies, including Tesla. This approach has created a favorable environment for technological development in the sector.
On Tuesday, Barron’s cited investors’ rising expectations for the unveiling of robotaxi on August 8th as the reason for Tesla’s continued rise in stock price.
Barron’s analyzed that Tesla’s current stock price is historically overvalued. This indicates that investors recognize the company’s potential for future growth.
Tesla’s robotaxi is a vehicle-hailing service that utilizes electric vehicles and autonomous driving technology. It is expected to operate by allowing users to call a Tesla driverless vehicle via an app, just like calling a taxi.
Launching the robotaxi business is a crucial test to evaluate whether Tesla can transition from an EV manufacturer to an AI platform company.
However, improving its autonomous driving technology is the most urgent task for Tesla to be competitive in the driverless taxi business.
The advanced driver assistance technology, FSD, currently applied to Tesla EVs, still requires human attention and only implements a partial autonomous driving stage, making it somewhat distant from the operation of driverless taxis.
Tesla is aggressively expanding its business by increasing investment in AI server infrastructure for autonomous driving technology development.
In this process, the Chinese government is expected to play an important role in helping Tesla’s robotaxi business succeed.
Tesla recently received permission to pilot FSD services in some areas of China, boosting its driving data collection.
China is considered a suitable region for the development of autonomous driving technology. It allows the testing of autonomous vehicles in various road environments, and the regulations related to the collection and acquisition of driving data are also looser than those in the US or Europe.
Moreover, the Chinese government is showing a strong will to foster the autonomous driving industry, which increases the likelihood of Tesla benefiting from this.
According to Bloomberg, Beijing authorities in China are discussing legislation to support the operation of autonomous taxis. They are pushing for legislation for the commercialization of official services.
Whether Tesla will be selected as a supported company by the Beijing authorities is still uncertain.
However, Bloomberg emphasized that Tesla has been maintaining a good relationship with the relevant authorities in China, as it has recently been included in the public procurement list of EVs by local governments in China.
Tesla is steadily increasing investment by operating EV and energy storage device (ESS) production facilities in Shanghai, China.
Considering these relationships, the outlook that Tesla can benefit from China’s autonomous driving industry promotion policy is gaining strength.
According to Reuters, Tesla is considering establishing a data center in China to develop autonomous driving algorithms. The company plans to use the data obtained in China to actively develop technology.
It was also reported that Tesla and Nvidia discussed supplying AI semiconductors for use in data centers in China. The construction plan is already presumed to be considerably advanced.
However, Bloomberg suggested that the Chinese government could face challenges in continuing to encourage companies, including Tesla, to develop autonomous taxi-related technologies.
This is due to a pedestrian accident involving a driverless taxi operated by the Chinese IT company Baidu in Wuhan. Along with ongoing backlash from taxi drivers, this has somewhat worsened public opinion.
Tesla CEO Elon Musk has not yet revealed detailed information other than the announcement of the unveiling of robotaxi on August 8th. Mid-to-long-term plans like autonomous driving technology development will likely be mentioned at the event.
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