“There is a very strong incentive for us to be very confidential with all information,” the billionaire said Saturday at the China Development Forum, an annual conference hosted by a unit of the government’s State Council. “If Tesla were to use cars to spy in China or anywhere, we will be shut down.”
Hours before he spoke, Reuters and Bloomberg reported that the Chinese military had banned Tesla vehicles from entering its complexes, out of concern about the onboard cameras.
In addition, The Wall Street Journal reported Friday that the government “banned military personnel and employees of major state-owned companies” from driving the US automaker’s cars, “citing concerns that the data the cars collect could be a source of national security leaks. can be.”
The mentioned outletsanonymous sources. China’s Foreign Ministry and Tesla did not immediately respond to requests for comment from CNN Business on Monday.
In a video call on Saturday, Musk likened the controversy to the one that affected TikTok last year, a company he said was not getting “confidence.” The app owned by ByteDance may have been banned in the United States last year due to alleged national security reasons.
“The United States wanted to close TikTok. Fortunately it didn’t happen,” said Musk. “A lot of people were concerned about TikTok. But I don’t think this kind of concern is necessary, and we need to learn lessons from it.”
High stakes
Tesla has made a big impression in China in recent years, especially after building its Gigafactory in Shanghai. In 2019, the company began manufacturing cars there to strengthen its presence in the world’s largest automotive market, with Musk even calling the plant a “template for future growth.” The company retained full control of the project, which was unusual at the time. And it has enjoyed strong government support in recent years.
But the U.S. automaker has also recently received attention from regulators, leading some observers to question whether its special relationship with officials is over. Last month, Tesla was called on by Chinese officials to ask questions about the quality of its Shanghai-made cars.
According to a report by The South China Morning Post on Saturday quoting an anonymous source, the military ban was issued a “few weeks ago” because Chinese leaders had become “very concerned” about the company’s vehicles. The newspaper added that Musk may be visiting China next month, citing the same source.
China is critical to Tesla’s global strategy and “remains the linchpin” justifying a higher share price for Tesla in the coming years, said Dan Ives, director of equity research at Wedbush Securities.
That’s why Wall Street has been “ laser-focused on all of Tesla’s actions for the past few days [or] Musk in response to this poker movement, “Ives wrote in a note to customers on Sunday.
“We believe this statement … was important for Tesla and Musk to make directly to the Chinese and the Beijing government, given the strategic importance of [electric vehicle] ambitions within China, ”he added.
“With a growing Cold Tech War between the US and China,” he said Tesla and others “remain trapped in the crossfire and that Musk should eventually draw a clear line in the sand.”
