The deal clears a final regulatory hurdle for Tesla's driver assistance system, which Tesla calls Full Self Driving (FSD), to be offered in China, the sources said.
As part of the deal, Baidu would also provide its lane-level navigation system to Tesla, they said.
The deal was struck recently and comes as Tesla CEO Elon Musk's visit to China and met with Premier Li Qiang. Musk is seeking approvals for the FSD software rollout in China and the permissions to transfer data overseas during his meetings with Chinese officials.
In China, all intelligent driving systems are required to obtain a mapping qualification before they can operate on public roads. Foreign firms need to partner with domestic companies that have obtained the license. Baidu is among a dozen companies that have secured one.
With the mapping service license, Tesla will be permitted to legally operate its FSD software on Chinese roads and its fleets can gather data about the vehicle's surroundings, such as road layouts, traffic signs, and nearby buildings.
It is not immediately clear whether the collected data will belong to Tesla or Baidu.
Baidu and Tesla's partnership dates back to early 2020, with Tesla already using Baidu's navigation map, similar to what's available on smartphones, in its vehicles in China.
On April 20, Baidu held a news conference announcing collaborations with several companies, including Tesla, although the FSD feature was not specifically mentioned.
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