Local Chinese authorities have removed restrictions on Tesla cars after the company’s China-made vehicles passed the country’s data security requirements. This significant breakthrough came following an unexpected meeting between Tesla CEO Elon Musk and Chinese Premier Li Qiang. The move comes at a time when Tesla’s electric cars are gaining popularity in China, despite initial concerns about the data that the U.S.-based automaker could potentially collect.
Although the specific local authorities that lifted the restrictions were not disclosed in Tesla’s press release, this development raises questions about the impact on Tesla’s operations in China. The Biden administration’s probe earlier this year into whether imported cars from China pose national security risks due to data collection capabilities further underscores the significance of this move. Moreover, the fact that Tesla’s vehicles were not the only ones that passed the data security rules indicates a broader trend in the China market.
The recent data security requirements for “connected vehicles” in China, released in November, apply to cars released in 2022 and 2023. Automakers are encouraged to voluntarily submit their vehicles for inspection to ensure compliance with the rules. The criteria include anonymizing facial recognition data, avoiding cockpit data collection by default, processing data internally, and notifying users about personal information processing. Tesla was among the first batch of automakers to meet these requirements, signaling its commitment to data security and compliance.
Despite the positive development of the restrictions being lifted, challenges remain for Tesla in the China market. The potential rollout of Tesla’s driver-assist software, Full Self Driving, in the country faces obstacles, according to JL Warren Capital CEO Junheng Li. The foreign status of Tesla in China, coupled with the availability of high-quality local alternatives for driver-assist software, presents hurdles to the domestic deployment of FSD. Premier Li’s visit to local companies like Xpeng at the Beijing auto show further emphasizes the importance of supporting innovation and local production in the auto industry.
The removal of restrictions on Tesla vehicles in China marks a significant milestone for the company in the world’s largest auto market. The meeting between Elon Musk and Chinese Premier Li Qiang underscored the importance of data security compliance and further integration of foreign automakers into the Chinese market. While challenges remain for Tesla in deploying its driver-assist software in China, the positive developments in data security compliance and market access bode well for the company’s future prospects in the region.