Tesla (TSLA) is partnering with Chinese tech giant Baidu (BIDU) to improve its advanced driving assistance system (ADAS) in China. With this deal, Tesla aims to make its software more accurate and reliable in China’s busy cities. The move comes as TSLA faces intense competition and criticism over the performance of its full self-driving (FSD) software in the region.
Importantly, Tesla’s latest software updates in China, released in February, saw major issues, such as incorrect lane changes and misreading traffic signals. These issues stemmed from a lack of proper local data training.
Key Reasons Behind the Collaboration
In China, the company is facing difficulties in deploying its ADAS due to data and regulatory restrictions imposed by both China and the U.S. It must be noted that Chinese data laws require TSLA to store data locally and prevent its transfer to the U.S. for AI training. This makes it hard for Tesla to improve its FSD system for roads in China.
Adding to the pressure, Tesla faces tough competition from local carmakers like BYD (BYDDF) and XPeng (XPEV), which offer ADAS features at lower costs.
To address these hurdles, Baidu has sent engineers to Tesla’s Beijing office to integrate its detailed mapping data with Tesla’s FSD Version 13 software. Baidu’s mapping data includes precise details about lane markings, traffic lights, and other road features unique to China.
What This Means for Both Companies
For Tesla, this partnership helps improve its technology and better position it against local competitors.
For Baidu, this deal is a chance to prove its strength in AI technology. This integration also allows BIDU to put forth its mapping and AI skills on a global level.
Which is better, TSLA or BIDU?
According to the TipRanks Stock Comparison Tool, BIDU stock has a Moderate Buy consensus rating, while TSLA has a Hold rating. Importantly, analysts see an upside potential of over 20% in BIDU stock and 33.5% in Tesla stock.
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