Tesla clears China regulatory hurdle with Baidu deal

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Good morning. Tesla has struck a deal with China’s search and mapping group Baidu, which paves the way for the US company’s semi-autonomous driving technology to be rolled out in the world’s largest car market.

The tie-up came after Tesla chief executive Elon Musk met China’s number two leader, Premier Li Qiang in Beijing on Sunday. The US carmaker has lately had to contend with declining sales and data security concerns.

Tesla shares rallied 17 per cent to $197 yesterday, giving the company a market value of $615.8bn. They have climbed more than a third during the past week after halving over the past two years.

Tesla has cleared an important regulatory hurdle with the Baidu deal. Foreign companies selling smart vehicles in China are required to use one of about 20 approved local suppliers of mapping and navigation systems, according to a person familiar with the matter.

Here’s more on the deal — and why Tesla’s “full self-driving” system is key to its China business.

  • Foreign carmakers embrace Chinese tech: At last week’s Beijing auto show, Toyota and Hyundai announced deals with Chinese tech groups, highlighting how foreign auto groups have decided that the only way to survive in the country’s cut-throat car market is to buy local technology.

  • EU vs Chinese EVs: The EU would need to impose huge tariffs of about 50 per cent to stem the flow of cheap Chinese electric vehicles into the bloc, according to new analysis.

Here’s what else I’m keeping tabs on today:

  • Economic data: Taiwan publishes advance first-quarter GDP while Singapore reports jobs figures for the same period.

  • Reports: The IMF publishes its Regional Economic Outlook for Asia and Pacific.

  • Results: Samsung, Adidas, Amazon, HSBC, Glencore, Stellantis and Volkswagen report first-quarter earnings.

Five more top stories

1. The yen strengthened sharply against the dollar yesterday, rebounding from a 34-year low reached a few hours earlier. From about 1pm Tokyo time, the yen rapidly strengthened from ¥159.5 a dollar to ¥154.5. Traders said it was “highly likely” that Japanese authorities intervened by selling dollar reserves and purchasing the Japanese currency for the first time since late 2022.

2. Israel has significantly softened its stance on the conditions for a hostage deal with Hamas, raising hopes of a breakthrough in diplomatic efforts to end the war in Gaza. After weeks of deadlock, Israel had accepted a proposal that sets out an initial six-week pause in the fighting during which Hamas would release 33 hostages, said a diplomat briefed on the talks. Here are more details on the proposal.

  • Protests in south-east Asia: General Atlantic and CVC have paused multimillion-dollar stake sales in companies operating US fast food brands in Indonesia and Malaysia as boycotts over the Israel-Hamas war disrupt business.

3. The billionaire owner of L’Occitane has made an offer to take the skincare company private in a deal that gives it an enterprise value of about €6.5bn. Reinold Geige has offered to pay HK$34 per share to buy the rest of the business and delist it from the Hong Kong stock exchange, where it has been listed since 2010. Its most recent closing share price was HK$29.5. 

  • Hang Seng: Hong Kong’s benchmark stock index climbed as much as 2 per cent yesterday, extending a week-long rally and putting it on course to become the best-performing major index globally in April.

4. Indian Prime Minister Narendra Modi has increased divisive rhetoric on the election campaign, amid signs of low turnout and anti-incumbency sentiment. In a series of rallies since India’s general election began on April 19, Modi has deployed some of the most extreme language of his decade in power to attack opponents and mobilise Hindu voters. Analysts see Modi’s Bharatiya Janata party as favourites in the election, which ends in June after six weeks of staggered voting.

5. WeWork’s senior creditors are poised to take control of the reorganised co-working space provider after agreeing to a restructuring deal, in effect ending Adam Neumann’s attempt to purchase the company he founded. The agreement would give senior creditors control of the reorganised co-working company in exchange for $450mn.

News in-depth

Montage of silhouettes in front of classified documents, the EU and China flags and the Chinese Communist party symbol with hammer and sickle

Recent arrests in Germany and the UK of citizens accused of spying for China point to the growing scale and ambition of Beijing’s European espionage operations. As one official put it, they were examples of Beijing’s “exquisite seeding” of operations that patiently seek to cultivate political influence and shape European attitudes towards China. More worryingly, there are signs they may intersect with Russian networks that have penetrated Europe’s political extremes.

We’re also reading . . . 

Chart of the day

An FT analysis shows that Singapore is one of the best countries for promoting women into senior financial service positions whereas Australia, the Netherlands and India lag behind. When it comes to the type of companies that are likely to advance the careers of their female staff, fintech companies perform better. Here are five charts on tackling the glass ceiling in finance.

Take a break from the news

International chess could be heading for an Indian era to match the Soviet Union’s dominance of the 20th century. Gukesh Dommaraju’s victory in last week’s Candidates in Toronto has the potential to spark a boom in a nation where, in its Chennai and Tamil Nadu heartland, the indoor game is already a credible rival to cricket.  

Gukesh Dommaraju playing chess
Hundreds of fans waited at Chennai airport for Gukesh Dommaraju’s return after his victory at the Candidates in Toronto last week © Dipayan Bose/Sopa/LightRocket via Getty Images

Additional contributions from Tee Zhuo and Gordon Smith

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