Tesla surges by $64bn after Elon Musk’s Beijing breakthrough

Thanks for joining us today. Chris Price will be back in the morning to cover all the latest on the markets. In the meantime, Matthew Field and James Titcomb report that Facebook’s owner faces an EU investigation:

Brussels is preparing to launch an investigation into Meta’s handling of Russian disinformation amid fears the social media giant is not doing enough to prevent the spread of Kremlin propaganda.

The Facebook and Instagram parent is facing a probe from the European Commission after policymakers have accused Vladimir Putin of using social media as a “weapon of mass manipulation”.

EU watchdogs are reportedly concerned that Meta has not done enough to halt Russia’s disinformation campaign, particularly in the run-up to Europe’s parliamentary elections in June.

Brussels is investigating Meta over suspected breaches of the bloc’s Digital Services Act, which can lead to billions of euros in fines ...

A Meta spokesman said: “We have a well-established process for identifying and mitigating risks on our platforms. We look forward to continuing our cooperation with the European Commission and providing them with further details of this work.”

Read the full story...

The Australian mining giant trying to buy Anglo American told investors on Monday it is proposing a $25.7bn (£20.4bn) settlement, jointly with a Brazilian partner, over the collapse of a dam in 2015.

The tragedy in Mariana, in south-east Brazil, unleashed a torrent of nearly 40m cubic metres of sludge made up of mining waste, killing 19 people, flooding 39 towns and leaving more than 600 people homeless.

The collapsed dam at an iron ore mine was owned by Samarco, a 50-50 joint venture between Brazilian miner Vale and BHP.

The affected areas remain ghost towns, with thousands of people awaiting compensation.

BHP said its Brazilian business “remains fully committed to supporting the extensive ongoing remediation and compensation efforts”.

Work on Britain’s nuclear submarine programme could face delays as hundreds of Rolls-Royce workers stage industrial action in a dispute over pay. Melissa Lawford reports:

GMB union members have launched a month of “work to rule” at the industrial giant’s plant in Derby, which manufactures the nuclear reactor plants that power submarines involved in the trilateral Aukus deal between Australia, the UK and the US.

The action means that GMB members will not work outside of pre-agreed hours.

GMB has agreed with Rolls-Royce that the action will not jeopardise the UK’s continuous at sea nuclear deterrent, safety submarines or operations at sea.

However, the industrial action could affect work on the future boat programme, which includes building Aukus, Dreadnought and Astute submarines.

Read the full story...

London’s market rally delivered another record high closing price for the FTSE 100 today.

It follows a strong week for the FTSE 100 which was buoyed by a raft of strong earnings reports and news of takeover approaches for London-listed stocks.

Susannah Streeter, head of money and markets for Hargreaves Lansdown, said:

April has been a record-breaking month for the blue-chip index, with a glass-half full sentiment dominating.

The FTSE has gained more than 11pc over the last six months, with super-patient investors finally rewarded by this spurt of growth.

The weaker pound against the dollar has been a key player in the power surge, with the greenback gaining ground against a basket of currencies on the latest interest rate expectations.

The FTSE outperformed its European peers today. Germany’s Dax index was down 0.16pc and France’s Cac 40 closed 0.29pc lower.

Anglo American faced calls from shareholders on Monday to detail plans for improving its value in order to fend off bidder BHP, as activist investor Elliott further raised the stakes by increasing its holding in the takeover target.

BHP, the world’s biggest listed mining group, is privately talking to investors about a potential revised takeover bid as it weighs up next moves after an initial gambit for its smaller competitor was rejected by Anglo last week.

Elliott Investment Management meanwhile said in a stock exchange filing on Monday it had raised its position in London-listed Anglo to 2.6pc from about 2.5pc it disclosed on Friday.

George Cheveley, portfolio manager at Ninety-One, said:

Anglo need to come out and explain to us how they’re going to make this business more valuable.

You’ve got the largest mining company (making an) approach, it’s a credible approach. You might argue the structure is wrong, and they might be able to change that.

Anglo, which rejected BHP’s bid on Friday as opportunistic and significantly undervaluing the miner and its future prospects, will hold its AGM tomorrow in London.

But while shareholders would be keen to hear details of its response, restrictions in the Takeover Code mean executives are unlikely to be able to discuss plans beyond a repeat of the rejection, a source familiar with the matter told Reuters.

In February, Anglo began a strategic review of its assets in response to a 94pc fall in annual profit and a series of writedowns caused by lower commodity demand.

Philips shares surged after it revealed it would settle hundreds of personal injury lawsuits in the US over its sleep apnea machines, which have been subject to a global recall.

The Dutch manufacturer said it reached the agreement, worth $1.1bn (£876m), to resolve any uncertainty over the cases. It maintains that the devices do not result in “any appreciable harm” to patients.

Philips has recalled more than 5m of breathing machines since 2021 because their internal foam can break down over time, leading users to inhale tiny particles and fumes while they sleep.

Monday’s announcement is another step toward resolving one of the biggest medical device recalls in the industry’s history, which has dragged on for nearly three years.

Philips shares rose more than 29.3pc in Amsterdam to a one-year high.

The FTSE 100 closed up today by 0.09pc, although at its peak this morning it was up 0.61pc. The biggest riser was gambling firm Entain, up 4.3pc, followed by takeover target Anglo American, up 4pc. The biggest faller was JD Sports, down 3pc, followed by equipment rental company Ashtead, down 2.1pc.

Meanwhile, the FTSE 250 was up 1.1pc, led by gambling software development company Playtech, up 14.1pc, followed by publisher Future, up 6.7pc. The biggest faller was Moonpig, down 2.3pc, followed by Smithson Investment Trust, down 1pc. 

The billionaire who controls skincare and fragrance brand L’Occitane wants to take it private in a move that could see it delist from the Hong Kong Stock Exchange.

Reinold Geiger is offering HK$34.00 in cash per share, which the company says is approximately 60.8pc premium to 60-trading day average closing price.

He said:

Our family has always taken a responsible, long-term view when it comes to developing our company.

The cosmetics sector is undergoing profound changes, and our company has significantly transformed into a geographically balanced multi-brand group, marked by strategic acquisitions such as Elemis, Sol de Janeiro, and, most recently, Dr. Vranjes Firenze.

The transaction we are launching today will enable us to focus on rebuilding the foundation for the long-term sustainable growth of our company.

Ireland’s economy returned to growth in the first quarter of 2024, driven by activity in the technology sector, after contracting for five quarters in a row, latest data showed.

GDP rose by 1.1pc from January to March compared to the previous three months, according to data from Ireland’s Central Statistics Office (CSO).

The earlier contraction had been largely blamed on a drop in exports, placing the economy in a recession.

The provisional data comes after a report last month said the Irish economy would grow throughout 2024.

Stocks opened a little higher in New York today during a week that will bring a Federal Reserve rate decision and the much-watched monthly jobs report. Tesla shares are currently up 12.8pc a deal in China.

Octopus, the energy company founded in 2015, has overtaken British Gas to become the UK’s largest domestic electricity supplier, according to latest figures from the energy regulator.

Ofgem data says Octopus reached a market share of 22pc, in the last quarter of 2023, compared with 20.3pc for British Gas.

The company attributes its strong growth last year to more than 800,000 customers choosing to switch, plus 1.3m customers joining as a result of its purchase of Shell home energy business.

Greg Jackson, Founder of Octopus Energy Group, said:

We’ve invested relentlessly in outstanding people and technology to deliver better customer service and lower costs - and today’s news shows that this works.

Thanks for following the live blog today. I am heading off now but Alex Singleton will keep providing updates into the evening.

I will leave you with this striking image of a Volkswagen ID displayed at the Beijing Auto Show today.

It was unclear if Elon Musk would be making an appearance at the event after his surprise meeting on Sunday with the Chinese Premier, which preceded today’s sharp jump in Tesla’s share price.

The world’s largest airlines are urging Brussels to reconsider plans to monitor contrails, as they claim the science of how they contribute to global warming isn’t yet fully understood.

Our transport industry editor Christopher Jasper has the latest:

Global carriers are concerned that rules requiring the industry to monitor vapour trails will impose a huge burden in terms of data gathering and lead to false conclusions around climate change.

Willie Walsh, director general of the International Air Transport Association (IATA) lobby group and the former boss of British Airways, has written to EU politicians warning of “growing concern across the airline community” about the requirements.

He said: “The proposal risks creating a regulatory burden that will require airlines to provide large amounts of data for all flights, with an insufficient potential for positive environmental impact.”

Read how the contribution of contrails to climate change is far less understood than that of carbon dioxide.

The EU is to shut down its “privacy-friendly” Twitter rival after it attracted just 18 active accounts and failed to secure public funding to keep it running.

Our technology editor James Titcomb has the details:

The European Data Protection Supervisor (EDPS) said it would stop operating EU Voice, as well as YouTube alternative EU Video, on May 18, two years after setting up the two social feeds.

The projects were launched as an effort to demonstrate that social networks can be run without advertising, respecting privacy and with data stored on EU soil.

The EDPS said it had been successful but had failed to secure financial backing from other EU institutions to keep it running.

Read how the services have had limited use.

Tesla added nearly $64bn (£51bn) to its valuation after the EV giant took a step closer to launching self-driving cars in China.

The world’s largest electric vehicle maker jumped 12pc as trading began on Wall Street after it reached a data-sharing agreement with Chinese tech giant Baidu.

The tie-up, revealed during Elon Musk’s surprise visit to Beijing, will allow Tesla to use Baidu’s mapping and navigating systems on Chinese roads.

Sources told Reuters that the agreement will allow Tesla to roll out its “full self-driving” features in China, as the partnership will remove regulatory hurdles.

By signing the agreement with Baidu, Tesla will use one of 20 approved local suppliers of mapping and navigation systems in China, according to the Financial Times.

It will also help overcome Chinese laws forbidding domestic data from being transferred out of the country.

Removing this barrier was seen as a vital step for Tesla as it was being outflanked by Chinese rivals such as XPeng and Huawei Technologies, both of which have rolled out their own competitor software.

The jump in Tesla’s share price comes after the company has lost almost a third of its valuation over the past year, fuelled by concerns over its growth potential. 

Wall Street began the week higher amid a surge in Tesla shares amid expectations that it will launch its self-driving software in China.

The Dow Jones Industrial Average rose 0.4pc to 38,368.07 while the broad-based S&P 500 gained 0.4pc to 5,121.56.

The tech-heavy Nasdaq Composite was higher by 0.5pc to 16,015.38.

Royal Mail has suspended fines on letters containing so-called counterfeit stamps amid widespread confusion over whether its internal systems are at fault, The Telegraph can disclose.

Our reporter Pieter Snepvangers has the details:

In a victory for this newspaper, the postal service has reversed its decision to surcharge recipients as it investigates issues with its new barcoded stamps.

The change, which comes into force today, is expected to be in place until the end of July but insiders believe it could be extended further.

Letters containing stamps deemed counterfeit will instead be returned to sender or delivered with a yellow sticker informing them the stamp is fake. Under the change, recipients, which have until now been charged the fines, will not be charged.

The company also announced it is developing a new counterfeit stamp scanner in the Royal Mail app to allow customers to scan stamp barcodes and check whether it is a recognised counterfeit.

Read how to spot a fake stamp.

Mike Ashley is increasing his hold over Frasers Group after the business unveiled plans to buy back £80m of shares from investors. 

Our retail editor Hannah Boland has the details:

The share buyback, which was announced today, is expected to tighten the billionaire’s grip on the retailer, of which he already owns 73pc.

Frasers has launched six share buybacks since early last year. During that period, Mr Ashley’s stake has marginally increased, suggesting he has not been selling his shares under the programmes. 

The latest buyback follows a significant jump in Frasers’ share price, which has risen more than 80pc since the start of 2021 after the company shrugged off a drop-off on consumer spending.

Analysts have claimed the buybacks should be viewed as a show of strength from Frasers, showing it has cash available after investing in its operations. 

However, there have recently been signs of pressure within the business. 

Last week, it emerged that Frasers was closing its Manchester offices, telling staff that the “challenging economic and trading climate” meant it needed to review its operations “to ensure that all group companies are operating efficiently and cost effectively”.

Ultra-fast food delivery app Getir is closing down in the UK, putting 1,500 jobs at risk.

Our senior technology reporter Matthew Field has the details:

Turkish business Getir, which also owns food delivery app Gorillas, said today it was withdrawing from Britain as well as Germany, the Netherlands and the US to focus on its home market.

Getir, which launched in the UK in 2021, promising to create 6,000 jobs, added it had secured additional funding from investors including the UAE’s Mubadala. 

“This decision will allow Getir to focus its financial resources on Turkey,” the company said.

Once valued at over $12bn, Getir expanded rapidly across Europe in a challenge to rivals including Deliveroo and Just Eat. 

Ultra-fast delivery companies raised billions of dollars during the pandemic as takeaway groceries boomed in popularity.

However, rising interest rates caused a drop in venture capital funding and several grocery delivery businesses have been merged or shut down altogether. 

In 2022, Getir acquired struggling rival German Gorillas. Its Gorillas brand will also shut down in the UK, although its FreshDirect US subsidiary will keep trading.

A planned strike that threatened to cause disruption at Heathrow Airport over the May bank holiday weekend has been called off following an agreement on pay and conditions.

Our transport industry editor Christopher Jasper has the details:

The walkout by 50 refuelling staff at the UK hub will no longer take place after an improved offer from employer Aviation Fuel Services was accepted, the Unite union told the Telegraph.

Heathrow said it understood that the strike was off, as did AFS, without commenting further.

Though involving a small number of employees, the planned action has threatened to disrupt the ability of 35 carriers including Virgin Atlantic, Emirates and Delta to take up fuel from Heathrow’s internal pipeline. The carriers had been scrambling to secure alternative kerosene supplies with the help of the airport.

The strike had been due to run for three days starting Saturday and was called after AFS, a joint venture whose owners include BP, Total and Q8 Aviation, imposed changes to terms for staff recruited since January, according to Unite.

A separate walkout by Border Force officers at Heathrow began today but has not impacted operations, according to the airport. The strike is due to end on Thursday.

Post-Brexit checks on food coming into effect from tomorrow will mean higher costs for consumers, a business group has warned.

For the first time in decades, companies will have to pay fees for EU imports of goods arriving in Great Britain from Tuesday. 

The second phase of the UK’s Border Target Operating Model will introduce charges of up to £145 for imports of plant and animal products - with the costs likely to be passed onto consumers, the British Chambers of Commerce (BCC) has warned.

William Bain, head of trade policy at the BCC, said:  

Firms face mounting confusion and uncertainty about exactly how and when the borders checks and costs will be fully implemented. It is crucial for business and trade that the government gives clarity on what is happening.  

While the Government did consult on the new charges being introduced it chose not to listen. The size of these costs shows scant regard to the interests of either businesses or consumers.  

A flat rate fee for bringing most animal and plant products into the UK is a hammer blow for small and medium-sized importers. It’s also deeply concerning for retailers, cafes and restaurants.  

Importing a small consignment of goods with only five different meat, poultry, egg, milk or some fish products in the medium risk category will now face a bill of £145 per package under these proposals.

German inflation came in slightly less than expected last month at 2.2pc, official figures show.

The consumer prices index in Europe’s largest economy was unchanged between March and April, but analysts had expected it to rise to 2.3pc.

The pound fell more than 1pc against the yen amid speculation that the Japanese authorities have intervened to support their currency.

The pound was last at 195 yen, down 1.2pc on the day after briefly nudging above 200 yen in early Asian trading, its highest since 2008.

The volatility in the pound versus the yen was all about the yen side of the pair. 

Traders said the Japanese authorities have bought the yen, which is at its weakest against the dollar since 1990.

Against the dollar, the pound was up 0.3pc at $1.253, its highest since April 12 and a small recovery from five-month lows in mid April.

Markets expect the Bank of England to start cutting rates in August, while the Fed is expected to wait until later in the year, causing the gap between U.S. and British government bond yields to widen.

Cocoa prices have slumped as rains in West Africa boost the prospects of the next harvest.

The most-active contract fell as much as 7pc to $9,850 a ton in New York having hit record highs this year as disease and poor weather decimated crops.

Analysts at Hightower said: “A shift towards wetter weather over West African growing areas should provide some benefit for the region’s upcoming production.”

Ireland’s annual inflation rate slowed to 1.6pc in April from 1.7pc in March, preliminary data showed, as the economy returned to growth.

Separate figures suggested first-quarter gross domestic product (GDP) increased 1.1pc quarter-on-quarter.

Irish GDP estimates can be sharply revised and last month’s final figure for a contraction in the final three months of 2023 was amended to 3.4pc from 0.7pc.

The government has long cautioned against using GDP to accurately measure economic growth as it is routinely impacted by multinational activity. Its preferred measure, modified domestic demand, is not included in the flash estimates.

US stock indexes have edged higher in premarket trading as Tesla and Apple led gains in megacap companies.

Tesla shares jumped 7.3pc premarket after the electric vehicle maker cleared some key regulatory hurdles that have long hindered it from rolling out its self-driving software in China, its second-largest market.

Apple added 1.7pc after a report that the iPhone maker had renewed discussions with OpenAI about using the startup’s generative artificial intelligence (AI) technology. Bernstein upgraded the stock to “outperform”.

US stocks closed higher on Friday, buoyed by moderate inflation data and a rally in megacap growth stocks following robust quarterly results from technology heavyweights Alphabet and Microsoft.

Focus will now shift to the US Federal Reserve’s interest rate decision due on Wednesday, ahead of a key jobs report on Friday that could set the tone for market direction in the near-term.

Mohit Kumar, chief economist Europe at Jefferies, said: 

We are not expecting a lot from the Fed this week. Powell would likely reiterate his latest comments that the recent set of strong data would delay rate cuts.

Focus would also be on reducing the pace of (quantitative tightening).

In premarket trading, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq 100 were all up about 0.1pc.

Wholesale gas prices have fallen as milder weather is forecast to return.

Dutch front-month futures, Europe’s benchmark contract, has fallen as much as 2.9pc today to nearly €28 per megawatt hour.

Prices remain down about 13pc since the start of the year after the continent ended the winter months with stocks at record levels for the time of year.

Europe’s gas facilities are around 62pc full, which is unprecedented for late April.

Anders Porsborg-Smith, managing director of Boston Consulting Group, said: “Winter looks extremely well-supplied and prices could get very low - with the caveat that we don’t see additional shocks like the recent conflict in the Middle East.”

The UK equivalent contract has fallen as much as 3.5pc.

A consultancy business will delist from the London Stock Exchange after a £239m takeover in a fresh blow for the UK stock market.

Software company Valtech has completed the acquisition of Kin + Carta in a take-private deal.

The consultancy joins several companies that have delisted from London this year as low valuations attract buyers and push companies to float shares elsewhere.

Valtech describes itself as an experience innovation company, meaning it aims to help businesses attract customers by reviewing how they interact with the company

It said the takeover of Kin + Carta would help it better support Fortune 500 and household-name brands “looking to meet changing consumer expectations,” and it adds its list of clients to the business.

The takeover will be funded by a combination of shareholder equity and external debt.

Oil prices have slipped as the West pushed for a peace deal between Israel and Hamas.

Brent crude, the international benchmark, has dipped by 0.6pc below $89 a barrel after gaining 2.5pc last week, while West Texas Intermediate dropped 0.4pc towards $83. 

It comes as US Secretary of State Antony Blinken is expected to step up efforts to secure a truce in Gaza during a visit to the region. 

The White House said Israel has agreed to hear its concerns and hold off invading Rafah until meeting with the Americans.

Ricardo Evangelista, senior analyst at ActivTrades, said:

Brent oil prices fell in early Monday trading as the market assessed reports of peace talks between Israel and Hamas.

This development offers a glimmer of hope for de-escalating the conflict, thereby lessening the risk of its regional expansion.

ChatGPT maker OpenAI has agreed a deal with The Financial Times to give it access to the publisher’s archived content.

Under the terms of the deal, the FT will license its material to help develop generative AI technology that can create text, images and code indistinguishable from human creations.

 FT chief executive John Ridding said: 

Apart from the benefits to the FT, there are broader implications for the industry. 

It’s right, of course, that AI platforms pay publishers for the use of their material. 

OpenAI understands the importance of transparency, attribution, and compensation – all essential for us.

Brad Lightcap, OpenAI’s chief operating officer, added: “Our partnership and ongoing dialogue with the Financial Times is about finding creative and productive ways for AI to empower news organisations and journalists, and enrich the ChatGPT experience with real-time, world-class journalism for millions of people around the world.”

It is the fifth such deal to be struck by OpenAI over the past year, following similar agreements with the US-based Associated Press, Germany’s Axel Springer, France’s Le Monde and Spain’s Prisa Media. 

The pound has risen ahead of the US Federal Reserve’s next interest rate decision this week.

Sterling rose 0.3pc against the dollar to $1.253 and was up 0.1pc against the euro, which is worth 85p, ahead of what will be a fairly light week for UK-focused economic figures.

ING strategist Francesco Pesole said: “Expect Bank of England rate expectations to be influenced primarily by the Fed and US data this week, as domestic drivers will be quite scarce.”

Inflation gathered pace for a second month in Spain as the government removed support on household energy bills.

Consumer prices rose 3.4pc from a year earlier in April, compared to 3.3pc the previous month.

However, core inflation, which strips out volatile food and energy costs, fell faster than expected to 2.9pc, compared to 3.3pc in March.

The FTSE 100 extended a record rally amid reports that BHP Group was considering a better buyout proposal for Anglo American, sending the mining company higher.

The blue-chip FTSE 100 rose 0.4pc to hit an all-time high of 8,185.69 points. The index has risen for eight of the past nine sessions.

The upbeat sentiment spilled over into the new week as Wall Street rose on Friday due to a rally in mega cap growth stocks.

Anglo American added 2.5pc after Reuters reported that BHP Group is considering an improved offer after its £31.1bn proposal was rejected by the London-listed copper miner.

AstraZeneca rose 1.1pc after the pharmaceuticals giant made progress with two breast cancer treatments.

Hipgnosis Songs Fund climbed 2.3pc after Blackstone agreed to acquire the music rights owner for about $1.6bn (£1.3bn), trumping an offer from Concord.

The mid-cap FTSE 250 up 0.2pc.

Petrofac slumped 23.4pc after a group of noteholders offered the struggling UK oilfield services provider a $300m credit line, and the company also delayed the publication of its full-year results to May 31.

Mel Stride, the Work and Pensions Secretary, has urged wariness over rising cases of mental health conditions and called on the public to return to work to help their mental health.

Mr Stride is expected to announce plans to overhaul the disability benefit system today, including reform personal independence payments (PIP) through changes to eligibility criteria and assessments.

Ahead of his statement in the Commons, Mr Stride told the Radio 4 Today programme: 

We need to have a grown up conversation. We have seen a very high increase in the number of people presenting with mental health issues.

I think there is a concern that in some cases it may be the case that we are too readily labelling those conditions as serious mental health conditions, when in fact they may be effectively the kind of ups and downs of life that is part of the human condition. We all have challenges in our life.

Mr Stride expressed intentions to build a sustainable welfare system that is both affordable to the taxpayer and fit for purpose.

He added: “Work being right at the centre of people’s lives is something that is really good for mental health.”

Stock markets in London opened higher ahead of the latest interest rate meeting by the US Federal Reserve this week.

The FTSE 100 has risen 0.4pc to 8,175.71 while the midcap FTSE 250 has gained 0.2pc to 19,864.89.

The largest western banks that are still operating in Russia paid more than €800m (£684m) in taxes to the Kremlin last year in an illustration of how financial institutions are funding his war in Ukraine.

The seven top European banks by assets in Russia reported a combined profit of more than €3bn (£2.6bn) in 2023, which was three times more than in 2021.

The earnings of Raiffeisen Bank International, UniCredit, ING, Commerzbank, Deutsche Bank, Intesa Sanpaolo and OTP were partly generated by funds that the banks could not withdraw from Russia.

Their jump in profitability meant that the European banks paid about $800m in tax to Moscow, up from €200m in 2021, according to analysis by the Financial Times.

Vladimir Putin has been seeking ways to support his war economy, including reducing output of Russian oil in an attempt to help increase price.

Troubled music rights firm Hipgnosis has agreed to an improved takeover offer by US private equity giant Blackstone which values the business at nearly £1.3bn.

The offer of $1.30 per share trumps an agreement made last week between the board of the company and  US-based Concord Music last Wednesday at $1.25 a share.

A bidding war has played out between the two suitors for the business, which owns the rights to the back catalogues of artists including Shakira and Neil Young. Blackstone had previously made a $1.24 a share offer.

The deal, which is being recommended by the Hipgnosis board, represents a 48.1pc premium on its closing price on April 17 before the first takeover approach was made.

Tesla has taken a further step towards launching self-driving cars in China after a row over the transfer of data from drivers in the world’s second largest economy.

Chief executive Elon Musk is understood to have reached an agreement with Baidu during a surprise visit to China.

The deal will allow Tesla to use the Chinese tech giant’s mapping licence for data collection on China’s public roads, which sources said was a key step for “full self-driving” to be introduced in the country, according to Reuters.

In a separate development, a top Chinese car association said on Sunday that Tesla’s Model 3 and Y cars were among models that it had tested and found to be compliant with China’s data security requirements.

At the moment Chinese laws forbid domestic data being transferred out of the country and full self-driving autopilot has not been enabled there.

Removing this barrier is seen as a vital step for Tesla, given China is the company’s second-biggest market, and that it is being outflanked by Chinese rivals that have already rolled out their own competitor softwares. 

Mr Musk on Sunday met with premier Li Qiang, China’s premier and second-most powerful politician.

It comes as car makers such as XPeng and Huawei Technologies have been seeking to gain an advantage over Tesla by rolling out similar self-driving software.

Data security and compliance have been key reasons why Tesla, which rolled out the most autonomous version of its Autopilot software four years ago, has yet to make it available in China, its second-largest market globally, despite customer demand.

Chinese regulators had since 2021 required Tesla to store all data collected by its Chinese fleet in Shanghai, leaving the company unable to transfer any back to the United States.

Tesla cars have for years been banned from entering Chinese military complexes over security concerns relating to cameras installed on its vehicles. 

Its cars have also been turned away from sites holding important political events, such as an annual summer leadership conclave the ruling Communist Party held in 2022.

Thanks for joining me. Tesla is a step closer to launching self-driving cars in China after an agreement with a tech giant on data sharing, following Elon Musk’s surprise visit to Beijing.

Under the deal with Baidu, the world’s largest electric vehicle maker will be allowed to use the Chinese tech giant’s mapping licence for data collection on China’s public roads.

5 things to start your day 

1) Elon Musk makes surprise visit to Beijing | Meeting with Chinese comes as Tesla battles a sales slowdown 

2) Sunak’s benefits overhaul ‘will not reduce bill’ | Payments to continue to rise despite stricter fit-for-work tests

3) UK must spend £30bn to strip CO2 from the air | Net zero targets impossible without carbon removal, experts say

4) Tory MP seeks assurances over Yorkshire potash mine | Anglo-American takeover raises questions over scheme

5) Chinese companies ‘fuelling theft of luxury cars’ | Thieves using cheap signal jammers to block GPS tracking

What happened overnight 

The yen swung wildly as it surged soon after hitting a fresh 34-year low against the dollar, fuelling speculation Japanese authorities may have intervened to support the currency for the first time since late 2022.

The dollar’s rally came as another forecast-topping US inflation report dented hopes for Federal Reserve interest rate cuts this year.

The yen slipped to 160.17 to the greenback in volatile morning trade, with liquidity thin amid a holiday in Japan. The fall stirred speculation that authorities would intervene to arrest its slide.

It later bounced back to 155.05, and Bloomberg reported the move suggested investors were weighing the prospect that officials would step in to financial markets.

The currency has come under renewed pressure after the Bank of Japan refused to tighten monetary policy further at its meeting last week.

Asian shares were trading higher amid optimism over the rally that ended the week on Wall Street.

Sydney’s S&P/ASX 200 added 0.6pc in early trading to 7,621.40. South Korea’s Kospi surged nearly 1pc to 2,681.73. Hong Kong’s Hang Seng jumped 1.2pc to 17,859.39, while the Shanghai Composite rose 0.6pc to 17,859.39.

Trading was closed in Tokyo for a Japanese national holiday, Showa Day. Japan has a series of holidays coming up known as the Golden Week, through Monday.