Chinese Military Bans Tesla Cars Citing Security Issues

China, the world’s biggest market for electric vehicles, is key to Elon Musk’s global growth ambitions, but there appears now to be a hurdle as Tesla Inc. cars have been banned from Chinese military complexes and housing compounds because of concerns about sensitive data being collected by cameras built into the vehicles.

The order, issued by the military, advises Tesla owners to park their cars outside of military property, according to people familiar with the directive who asked not to be identified because the information is private. The ban, relayed to residents of military housing this week, was triggered by concerns that the world’s biggest maker of electric vehicles is collecting sensitive data via the cars’ in-built cameras in a way the Chinese government can’t see or control, one of the people said.

Images of what was purported to be a notice about the ban were also circulating on Chinese social media. Multi-direction cameras and ultrasonic sensors in Tesla cars may “expose locations” and the vehicles are being barred from military residences to ensure the safety of confidential military information, the notice said. A representative for Tesla in China declined to comment on the military’s move. China’s Defense Ministry didn’t immediately respond to a fax sent after business hours.

Tesla, like many other automakers including General Motors Co., uses several small cameras, mainly located on the outside of the vehicle, to help guide parking, autopilot, and self-driving functions. Most Tesla models also have an interior camera mounted above the rearview mirror that can be used to detect whether a driver is looking at the road, looking down at their lap, wearing sunglasses, or looking at something else entirely.

Internal Camera

The California-based company — which produces Model 3s and Model Y SUV crossovers at a Gigafactory near Shanghai — hasn’t shied away from that fact, with Chief Executive Officer Elon Musk tweeting in April 2019 that the internal camera is there “for when we start competing with Uber/Lyft and people allow their car to earn money for them as part of the Tesla shared autonomy fleet. In case someone messes up your car, you can check the video,” Musk explained.

Since then, Tesla has started using cars’ internal cameras to monitor what it calls FSD (full self-driving) beta testers or Tesla owners who have volunteered to test out the company’s driver-assist capabilities. Earlier this month, Musk tweeted that the company’s FSD beta trial had been expanded to around 2,000 owners but Tesla had also “revoked beta where drivers did not pay sufficient attention to the road.” Musk said the next significant release of FSD beta would be in April.

Concern over this program contributed to the ban by the military, one of the people said. None of the in-car cameras in Teslas sold in China are turned on or part of the FSD beta trial, the Tesla representative said. Tesla’s privacy policies comply with national laws and local regulations in China, the person said.

China Apology

As we mentioned before, China, the world’s biggest market for EVs, is key to Musk’s global growth ambitions. The carmaker received significant support from the state to build the factory near Shanghai, its first outside of the U.S., and Musk’s strategy has been one of deference to the government, in contrast to his more combative approach in the U.S.

Recently, though, the tone seems to have shifted. Tesla was called in by Chinese regulators over quality and safety issues with its cars, including battery fires and abnormal acceleration. The automaker was also forced into issuing a public apology to China’s state grid in early February after a video purportedly showed staff blaming an overload in the national electricity network for damage to a customer’s vehicle.

This isn’t the first time Tesla has found itself at the center of controversy over the use of cameras. Last week, a group of hackers said they breached a trove of security-camera data collected by Silicon Valley startup Verkada Inc., gaining access to many different types of footage, including some from inside a Tesla warehouse in Shanghai.

The hackers said they obtained access to 222 cameras in Tesla factories and warehouses and that the data breach was carried out to show the pervasiveness of video surveillance and the ease with which systems could be broken into. Tesla China said that it was one of its suppliers that had been hacked, and that data from the Chinese Gigafactory is stored in secure local servers.