Tesla to build China data center to power global autonomous driving

Tesla CEO Elon Musk / Photo credit: Shutterstock

Electric-vehicle maker Tesla is building a data center in China to develop algorithms that could power its self-driving technology globally, sources told Reuters.

The US-based company plans to send its Chinese EV data abroad for its full self-driving system, but it has yet to get regulatory approval. Currently, Tesla also can’t offer its full US$9,000 full self-driving system in China.

Through a year-long pilot program, businesses in Shanghai’s Lingang area, where Tesla’s factory is located, might permit some data transfer without extra security checks. If successful, this could expedite autonomous driving deployment, potentially positioning China as a key adopter. This can mirror Tesla’s 2019 launch of its Shanghai Gigafactory, which steered it towards mass-market EV production.

However, experts believe that achieving full vehicle autonomy is still years away with Tesla’s current driver-assistance features in China, which require a driver’s readiness to take over.

With dwindling EV demand, Tesla has also been turning to AI-powered products like self-driving to stay ahead. It could supercharge Tesla’s numbers, given that after recent mass layoffs, the company is expected to post the lowest profit margins in six years.

Tesla CEO Elon Musk has reportedly reached out to Nvidia to source graphics processing units for its China-based data center. US sanctions, however, prohibit the sale of Nvidia’s top chips in China.

Musk has also reportedly spoken with Chinese Premier Li Qiang about Tesla’s investment in a local data center and licensing its full self-driving tech to Chinese EV makers.

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