This is expected to pave the way for the lifting of access restrictions on Tesla vehicles in some areas and the launch of the US EV maker's FSD in China.

"Honored to meet with Premier Li Qiang. We have known each other now for many years, since early Shanghai days," Musk's Weibo account wrote last night.

In a report yesterday, Reuters cited people familiar with the matter as saying Musk was expected to discuss the rollout of FSD software in China as well as permission to transfer data overseas.

"It may be possible very soon," Musk said on April 20 in response to a question from a user on the X platform he owns about when FSD will enter China.

Musk's surprise visit to China could be the start of a game changer for FSD, Wedbush said in a research note yesterday.

It's a watershed moment for Musk and Beijing, as Tesla faces massive domestic competition for EVs in China as well as weak demand, according to the note.

While Tesla's long-term valuation story hinges on FSD and autonomous, a key missing piece of the puzzle is Tesla's offering of FSD in China, which is now on the doorstep, Wedbush said.

If Musk is able to get approval from Beijing to transfer data collected in China abroad, it could be a "game changer" in accelerating training its algorithms for its autonomous technology globally, the report reads.

"We also believe this trip will be significant for Tesla and Musk further strengthening its EV footprint within the Chinese market at a pivotal time," Wedbush said.

Elon Musk hints Tesla FSD for China may be possible very soon