China’s Military Bans Tesla Cars From Military Complexes Over Security Concerns: Reports

Tesla cars have been banned from entering Chinese military complexes because of security concerns about the cameras that are installed in the electric cars, said reports quoting sources who have seen the notices of the directive.

According to analysts, this is the latest sign of the increasing scrutiny of the United States electric carmaker Tesla by Chinese authorities amid tensions between the US and China. Analysts further said that this action against Tesla is similar to the ones that the US had taken against the Chinese telecoms giant Huawei over concerns of threat to the country’s security.

The news about the Chinese military’s measure against Tesla emerged during a meeting between senior Chinese and US officials in Alaska which did not go well and which was the first time that such an interaction had taken place since the start of the new presidency of Joe Biden.

“I presume the timing of the announcement surely linked to the fireworks planned for Anchorage,” said Ian Bremmer, president at Eurasia Group consulting firm.

When building its first overseas factory there in 2019, the US electric car maker had been strongly backed by Shanghai. For quite sometime, the Model 3 sedans form Tesla were the best-selling electric vehicle in China till a much cheaper micro EV overtook it.

According to reports, Tesla owners have been ordered by the Chinese military to park their cars outside a military property and it notified residents this week.

The latest restrictions imposed on Tesla draw a parallel with the hostility toward Huawei by the US government over concerns that using the Chinese company’s equipment could allow Chinese agencies access to US telecoms infrastructure, said Pavel Molchanov, an analyst at Raymond James & Associates.

“Even if such concern is exaggerated, it can create dislocation for the companies directly affected,” he said.

According to a report published by the Wall Street Journal, use of Tesla cars by personnel at military, state-owned enterprises in sensitive industries and key agencies was banned by the Chinese government.

Whether this restriction applied to all such military facilities was not immediately clear in the report. The report, citing people familiar with the issue, claimed that the restriction order was issued after a security review by the Chinese government about Tesla’s vehicles.

Tesla sold 147,445 cars in China last year, which accounted for 30 per cent of the total deliveries of the company even though the company is facing growing competition from domestic Chinese companies such as Nio Inc and Geely.

There were no comments on the issue available from China’s State Council Information Office, Tesla and China’s defence ministry.

More cameras and sensors are being fitted to electric and conventional vehicles by auto makers to capture images of a car’s surroundings. Analysts say that one of the fast-emerging challenge for the industry and regulators around the world is control over how these images are put to use and where they are sent and gets stored.

(Adapted from Reuters.com)



Categories: Geopolitics, Regulations & Legal, Strategy, Uncategorized

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