Analyst Dan Ives has highlighted the crucial role that China plays in Tesla's growth strategy during an interview with CNBC. Describing China as the "heart and lungs" of Tesla's growth story, he emphasized the significance of the Chinese market, especially given the company's plans to test its robotaxis in the country. Chinese state media revealed that Tesla would be conducting trials of its robotaxis in China, although a full rollout of the Full Self-Driving functions has not yet been approved by the government. Despite this, China has reportedly welcomed Tesla to conduct some tests in the realm of autonomous driving.
Elon Musk's positive relationship with Beijing was also mentioned by Ives, indicating that the CEO continues to maintain a good rapport with Chinese authorities. Tesla's focus on China has been evident in recent months, with the company collaborating with Baidu in April to introduce driver assistance features in the country. This partnership aimed to provide crucial mapping and navigation data for China, essential for deploying Tesla's Full Self-Driving software in the East Asian market. Analysts have noted that Tesla's success in China is pivotal for its overall global growth strategy, with expectations that revenue and margins will receive a significant boost from its operations in the region.
Beyond its strategic focus on China, Tesla has also undergone executive changes, further emphasizing the company's dedication to the region. The return of Tom Zhu, speculated to be Musk's potential successor at Tesla, to his role in China signals the company's commitment to maintaining a strong presence and focus on the Chinese market.