Tesla may tap DeepSeek and Doubao for in-car AI assistant

There are rumors Tesla plans to integrate Chinese-developed AI models, DeepSeek and ByteDance’s Doubao, into its in-car voice assistant system to attract customers in China as it struggles to keep its market share from local rivals offering similar features and backed by the Chinese government. 

Tesla Inc. reportedly has plans to equip its Chinese cars with in-car voice assistant functions that will be powered by DeepSeek and ByteDance Ltd.’s Doubao artificial intelligence as it aims to beat local rivals with similar features. The decision is a big move away from its Grok-powered American models.

The technology would enable drivers to use voice commands to control various functions including in-car entertainment and cabin temperature, as well as receive news updates, according to a terms and service document from Tesla’s official website.

Those voice commands will be mostly processed by Doubao, but DeepSeek chat will handle the interaction, the document also revealed. Both models are hosted by ByteDance’s Volcano Engine cloud service.

Tesla moves to maintain relevance in the competitive Chinese market

The decision to use other AI models outside Grok most likely did not come easy, but Musk has had to choose between losing more market share to other foreign carmakers willing to make such concessions and local companies that already have such partnerships in place already.

China is a critical market for EV carmakers because Chinese drivers are already used to dealing with sophisticated tech-enhanced vehicles. It is not surprising that the country is being courted by so many, an advantage the government leverages well.

In March, BMW AG revealed a deeper partnership with Alibaba Group Holding Ltd. and shared plans to introduce the Qwen large language model to an upcoming line-up tailor-made for the Chinese market.

Tesla is losing market share in China

At this time, it is unclear if the AI models have already been integrated into Tesla’s Chinese models. There are conflicting reports, but several owners said they were yet to be notified of the new terms and service document.

Reports of the most recent over-the-air update listed on Tesla’s official WeChat app came on August 18. Despite the confusion, one thing has been made certain: legal requirements in China are likely making it difficult for Tesla to introduce Grok to its Chinese market

It is the latest blow to Tesla’s attempt to strengthen its standing in the Chinese market as it continues to face competition from domestic brands such as BYD Co. and Zhejiang Geely Holding Group Co., both of which already depend on DeepSeek to improve user interaction.

The year has been a tough one for the EV maker in China and the numbers paint a glum picture. Reports claim shipments from its Shanghai factory declined in six of the first seven months of 2025, with July deliveries down 8.4% from a year earlier.

Aside from Tesla’s failure to court the government’s favor and the Chinese people’s approval, the decline can be attributed to the competition from the local rivals and trade-related uncertainties.

BYD Co. was already a big enough threat even before Xiaomi Corp. entered the EV car industry, launching several models including the YU7 sport utility vehicle specifically created to take on the Model Y.

Tesla is now preparing to launch a longer, six-seat version of the Model Y SUV in China, but there is no guarantee that it will help it keep its dwindling market share in the increasingly hostile Chinese market.

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