Tesla shares jump after reports of China deal

Tesla’s shares have jumped after reports the firm has cleared an important regulatory hurdle in China by partnering with search giant Baidu.

The reports come after chief executive Elon Musk made a surprise visit to meet the country’s number two leader, Premier Li Qiang.

The deal with Baidu brings Mr Musk a step closer to rolling out Tesla’s self-driving technology in China.

Wedbush analyst Daniel Ives said it was “a watershed moment”. Tesla has been contacted for comment.

Mr Ives said the company faces “massive domestic electric vehicle competition in China along with softer demand”, but that its “long-term valuation story” depends on it also getting approval for fully autonomous driving.

The current reported go-ahead allows it to sell parts of its autonomous driving technology in China, such as assisted parking, but full autonomous technology will require further approval.

Tesla’s share price jumped almost 12% as markets opened in the US and means the stock has recovered some of the value it has lost since the start of the year, with the price down over a quarter since January.

Part of the reason analysts believe Tesla needs approval in China is because its performance elsewhere has weakened.

In its results last Tuesday, profits more than halved for the first three months of this year.