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“There is a very strong incentive for us to be very confidential with any information,” the billionaire said on Saturday at the China Development Forum, an annual conference organized by a unit of the State Council of government. “If Tesla used cars to spy in China or elsewhere, we would be shut down.”
Just hours before his speech, Reuters and Bloomberg reported that the Chinese military had banned Tesla vehicles from entering its compounds, expressing concerns about the cameras fitted on board.
In addition, the Wall Street Journal reported on Friday that the government was barring “military personnel and employees of major state-owned companies” from driving the American automaker’s cars, “citing concerns that data collected by the cars could be a source national security leaks “.
The points of sale mentioned anonymous sources. China’s Foreign Ministry and Tesla did not immediately respond to CNN Business’s requests for comment on Monday.
Speaking by video call on Saturday, Musk compared the controversy to the one that troubled TikTok last year, a company he said did not enjoy “trust.” The app owned by ByteDance faced a potential ban in the United States last year for alleged national security reasons.
“The United States wanted to shut down TikTok. Fortunately, that didn’t happen,” Musk said. “A lot of people were concerned about TikTok. But I think that kind of concern is unnecessary, and we should learn from it.”
High stakes
Tesla has caused a sensation in China in recent years, especially after the construction of its Shanghai Gigafactory. In 2019, the company began manufacturing cars there to strengthen its presence in the world’s largest auto market, with Musk even calling the plant a “model for future growth.” The company managed to retain 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 caught the attention of regulators recently, leading some observers to question whether its special relationship with officials is over. Last month, Tesla was summoned by Chinese officials to answer questions about the quality of its cars made in Shanghai.
According to a report published on Saturday by The South China Morning Post which cited an anonymous source, the military ban was issued “a few weeks ago” because Chinese officials had become “very concerned” about the company’s vehicles. The newspaper added that Musk could visit China next month, citing the same source.
China is central to Tesla’s global strategy and “remains the linchpin” that justifies a rise in Tesla’s share price in the coming years, according to Dan Ives, managing director of equity research at Wedbush Securities.
This is why over the past few days, Wall Street has been “laser-focused on all of Tesla’s stocks. [or] Musk in response to this poker decision, ”Ives wrote in a note to customers on Sunday.
“We believe that this statement … was important for Tesla and Musk to make directly to the Chinese and the Beijing government given the strategic importance of its [electric vehicle] ambitions in China, ”he added.
“With a technology cold war between the United States and China,” he said Tesla and others “remain caught in the crossfire and Musk ultimately needs to draw a clear line in the sand.”
– Shanshan Wang contributed to this report.
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