Tesla cars banned from China’s military complexes for safety reasons – Sources
(Reuters) – The Chinese military has banned Tesla cars from entering its complexes, citing safety concerns about the cameras installed in the vehicles, two people who saw evidence of the policy told Reuters.
The move is the latest sign of China’s growing control of the US electric car maker amid tensions with Washington. Analysts said it was similar to Washington’s actions against Chinese telecommunications company Huawei, citing national security.
Chinese military restrictions on Tesla surfaced when senior Chinese and US officials held a controversial meeting in Alaska, the first such interaction since US President Joe Biden took office.
“I expect the timing of the announcement to be related to the fireworks display planned for Anchorage,” said Ian Bremmer, president of consultancy Eurasia Group.
Tesla stock rose 0.3% after falling as much as 4.4% during trading.
The US electric car maker received strong support from Shanghai when it built its first overseas factory there in 2019. Tesla’s sleek Model 3 sedans were the best-selling electric vehicle in the country before being overtaken by a much cheaper micro-electric vehicle.
The policy advises owners to park Teslas outside of military compound, and residents were notified this week, the two sources said, declining to be named due to the sensitivity of the issue.
Bloomberg News had previously reported on the move.
Pavel Molchanov, an analyst at Raymond James & Associates, said the recent restrictions on Tesla closely parallels the US government’s hostility towards Huawei over concerns that Beijing may have access to US telecommunications infrastructure.
“Even if this concern is exaggerated, it can lead to distortions for the companies directly affected,” he said.
Separately, the Wall Street Journal reported that the Chinese government restricted the use of Tesla cars by personnel of military, state-owned companies in sensitive industries and key agencies. (https://on.wsj.com/3r2NnVe)
It was not immediately clear whether the measure would apply to all of these institutions. The move came after a government security review of Tesla vehicles, the report said, citing people familiar with the effort.
Tesla sold 147,445 cars in China last year, or 30% of its total deliveries, despite increasing competition from domestic competitors like Nio Inc and Geely.
The Chinese State Council Information Office and Tesla did not immediately respond to requests for comment. China’s Ministry of Defense was not immediately available for comment.
CARS AND CAMERAS
Car manufacturers are equipping more and more vehicles with cameras and sensors that capture images of the surroundings of a car. Controlling how these images are used and where they are sent and stored is a rapidly growing challenge for the industry and regulators around the world.
Tesla cars have several external cameras that support the driver when parking, changing lanes and other functions. CEO Elon Musk has spoken many times about the value of the data that Tesla vehicles can capture and that can be used to develop autonomous driving.
Tesla’s Model 3 and Model Y also have cameras in the rearview mirror for driver safety, which are disabled by default.
“China has a number of tools – some direct, some indirect – to make foreign companies like Tesla difficult. The pressure can come from any direction, at any time, ”said Michael Dunne, CEO of consultancy ZoZo Go.
A Chinese state regulator said in February that government officials had met with Tesla officials over consumer reports of battery fires, unexpected acceleration and errors in over-the-air software updates.
Musk is expected to speak online at a government-organized annual global business meeting in Beijing, the China Development Forum, on Saturday. The event includes Chinese officials.
(Reporting by Beijing Newsroom, Hyunjoo Jin in San Francisco and Eva Mathews and Subrat Patnaik in Bengaluru; Editing by Maju Samuel, anil D’Silva, Emelia Sithole-Matarise, David Clarke and David Gregorio)