Since 2024, two key members of U.S. politics and business have visited China consecutively, before U.S. Treasury Secretary Yellen, followed by U.S. Secretary of State Blinken, and on April 28, Tesla CEO Elon Musk came to China on his own private jet. Although Tesla did not officially announce the specific reason for Musk's visit to China, according to the insider, there are two main points for this visit, one is to promote Tesla's full self-driving software in China, and the other is to hope that China will allow the transfer of car data.
On April 28, according to the South China Morning Post, Tesla CEO Elon Musk came to China on his own private jet on the same day. It is worth noting that Musk's visit to China coincided with a sharp drop in his stock. On April 26, local time, the U.S. auto safety regulator announced that it had begun a new investigation into Tesla, which covered 5 models with assisted driving systems produced from 2012 to 2024, coupled with the previous successive stock sell-offs, Tesla's stock has fallen by as much as 32% since 2024 alone! The largest decline once exceeded 44%.
It is worth noting that in addition to stocks, Tesla's sales volume, as well as net profit, have fallen significantly. On April 23, Tesla announced its financial report for the first quarter, which showed that Tesla's total revenue in the first quarter was $21.3 billion, down 9% year-on-year, and net profit shrank sharply to $1.129 billion, a decrease of 55%. In terms of sales, Tesla delivered a total of 387,000 vehicles in the first quarter, down 8.5% year-on-year. It can be seen that Elon Musk's visit to China can be said to be under great pressure, trying to increase his sales and increase his net profit.
According to the source, the first task of Musk's visit is to promote his self-driving software in China, after all, autonomous driving is a core selling point of new energy connected vehicles. As one of the first technology giants involved in new energy vehicles, Tesla also has its own technology in autonomous driving, and once Tesla is equipped with its own autonomous driving software, it can significantly improve the competitiveness of its products. While this may work for other countries, the positive effects in China are limited.
First of all, there are a large number of new energy connected passenger car companies in China, and the top car companies basically have their own intelligent driving solutions. As the saying goes, one step behind is one step behind, and at a time when domestic intelligent driving is blooming and advancing by leaps and bounds, Tesla's autonomous driving technology has no competitive advantage.
Second, the relevant US regulators have launched a new investigation into Tesla, precisely because the vehicles equipped with self-driving software have been involved in multiple accidents before. In December 2023, Tesla announced a recall of 2 million vehicles and upgraded the Autopilot driver assistance system, but collisions still occurred after the upgrade. It can be seen that if Tesla simply relies on self-driving software to improve the competitiveness of its products, it can play a very limited role.
As for the second point mentioned by the source, it is quite related to the first point. If autonomous driving becomes more intelligent, it is necessary to invest huge manpower and material resources to train artificial intelligence. In addition to computing power, China has a large and developed transportation road, and it is also the most important sales market for Tesla, and through the huge user base accumulated before, Tesla's self-driving software can make great progress in a short period of time. If Tesla's goal is achieved, it will be of great significance for the iteration of its self-driving technology. However, Musk has proposed to allow Tesla to transfer data externally, which Musk has almost no chance of winning.
Since the rise of artificial intelligence, data security has begun to be paid attention to, some foreign-funded vehicles with coordinate functions and optical sensors have been greatly restricted, and even restricted the entry of relevant vehicles on some occasions, and major countries in the world have launched a battle to defend data security, of course, not only limited to vehicles. Imagine that a vehicle with coordinates and optical images, after entering a classified place, can lead to quite serious consequences once the relevant data is sent abroad. In today's increasingly strict data security, it is undoubtedly difficult to export a large amount of sensitive data abroad.
In fact, some tech giants are not alone in declining sales and sharp reductions in net profits, and Apple is facing a similar situation. According to the latest data released by market research firm Counterpoint, Apple's sales in China fell 19% year-on-year in the first quarter, while its shipments also fell 9.6%. Its sales as a high-end model in China have dropped from the first place to the third now, and not only that, but its stock has also fluctuated significantly, and its market value has evaporated by more than $300 billion at one point.
While US high-tech companies have suffered setbacks one after another, US Treasury Secretary Janet Yellen has tried in vain to shift the blame on China, slandering China as "overcapacity" during her visit to China, thus compressing the living space of Western companies. Then U.S. Secretary of State Antony Blinken also visited China on April 24, but so far, it has not achieved the results that the United States wants. In Biden's so-called "all-out competition" environment, it is simply wishful thinking that Western politicians will still point fingers at China and try to force China to make concessions.