Chinese military has banned Tesla Inc. cars from entering its complexes and housing compounds.
China is Worried; Tesla Cars have Eyes
This ban comes out of concerns about sensitive data collected by cameras built into the vehicles. The Chinese government is mainly worried about how data is stored and where.
The order asks Tesla owners to park their cars outside of military property. The ban, relayed to residents of military housing this week, was put in place to prevent in-built cameras from recording what goes on in military bases.
The move is typical of China, a country with growing scrutiny to the US, the base company for Tesla.
Even China’s Ministry of Foreign Affairs said that it was not fully aware of the specifics of the case regarding Tesla’s electric cars, in response to questions from CNN Business.
In an attempt to buy more time to fully understand the details of Tesla’s ban, China’s State Council Information Office and China’s defense ministry did not immediately respond to comments.
“But any enterprise operating and investing overseas must comply with the laws and regulations of the host country. As long as foreign enterprises come to China to operate and invest in accordance with the law and regulations, China takes a welcoming and open attitude and is dedicated to creating a better business environment for enterprises of all countries,” the ministry said.
Tesla and Tik Tok, Two Companies, One Case
Car markers around the world have been equipping their vehicles with cameras and sensors to capture images of a car’s surroundings.
Tesla cars are no exception especially that the company is determined to follow up on all things high-tech. Tesla cameras are designed to assist drivers with parking, changing lanes and other features.
Also, Musk has previously spoken on the value of the data Tesla vehicles capture. He assured that the data is only used to develop autonomous driving and not invading drivers’ privacy.
However, Tesla CEO Elon Musk reassured Tesla users again and responded to the accusations behind the ban. Musk confirmed that his company’s cars will never be utilized for spying in China.
“There’s a very strong incentive for us to be very confidential with any information,” the billionaire said Saturday at the China Development Forum. “If Tesla used cars to spy in China or anywhere, we will get shut down.”
A screen showing Tesla CEO Elon Musk speaking via video link during the China Development Forum at Diaoyutai State Guesthouse on Saturday in Beijing.
Musk compared the controversy to the one that troubled TikTok last year, a company he said didn’t receive “trust.” The ByteDance-owned app faced a potential ban in the United States last year on alleged national security grounds.
“The United States wanted to shut down TikTok. Luckily, it did not happen,” Musk said. “Many people were concerned about TikTok. But I think this kind of concern is unnecessary, and we should learn lessons from it.”
Elon and China, Friends to Enemies
Tesla cars have been prosperous in ever since the country built a Gigafactory in Shanghai in 2019. The electric-car company established its dominance in the world’s largest auto market.
Tesla CEO Elon Musk even called the Chinese plant a “template for future growth.”
Surprisingly, the company managed to retain complete control of the project, which was unusual at the time. Back then, Tesla had the privilege of enjoying an unprecedented strong government support from China for 2 years.
The U.S. electric car maker hit the jack-pot when it built its first overseas factory there. Tesla’s sleek Model 3 sedans were the best-selling electric vehicle in the country.
However, the car later lost its momentum and was overtaken by a much cheaper micro EV. Tesla shares ended up at 0.3% after falling as low as 4.4% during trade.
Even after the fall, Tesla sold 147,445 cars in China last year or 30% of its total deliveries, though competition is growing from domestic rivals such as Nio Inc and Geely.
Now, China is skeptical with Tesla’s global strategy. The government stated it “remains the linchpin” which justifies a higher stock price for Tesla in the coming years, according to Dan Ives, managing director of equity research at Wedbush Securities.