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In a move that reflects Chinese sensitivities towards Western tech, Tesla has now equipped its electric vehicles (EVs) in China with AI models from DeepSeek instead of xAI’s Grok Large Language Model (LLM). This change is evident in the Vehicle Identification Number (VIN) registrations of Tesla EVs in China, where DeepSeek is mentioned under the AI subcategory.
This development contrasts sharply with Tesla’s approach in other markets, where xAI’s Grok LLM handles AI-related tasks. The shift comes as China’s politburo has become increasingly sensitive to perceptions of becoming “addicted to [the] American technology stack,” a concern that was recently highlighted by the US Commerce Secretary, Howard Lutnick.
To illustrate this emerging paradigm shift, it is worth noting that China is now actively discouraging its tech companies from purchasing NVIDIA’s H20 GPUs. The rationale behind this move is fear of backdoor spyware and potential sweeping bans on these chips.
While DeepSeek’s AI models face challenges due to inferior training capabilities provided by Huawei’s AI chips, the Chinese government is pushing for a complete ban on such technology in the country. Meanwhile, DeepSeek reportedly had to delay the launch of its R2 model.
Elon Musk recently announced that Tesla’s FSD version 14 will be launched in September. Additionally, xAI plans to start training the next version of the Grok LLM next month, with Musk describing it as a “shot at being true AGI.”
Furthermore, the National Highway Traffic Safety Administration (NHTSA) has initiated an investigation into Tesla’s crash reporting delays, where the agency was sometimes notified months after an event when regulations mandate prompt notification.
Given these headwinds, it is unsurprising that puts on Tesla’s stock remain highly in demand and expensive.
