“There is a very strong incentive for us to be very confidential with any information,” the billionaire told the China Development Forum on Saturday, an annual conference hosted by a Council of State unit. “If Tesla is going to spy on cars in China or anywhere else, we will be shut down.”
Just hours before he spoke, Reuters and Bloomberg reported that the Chinese military had banned Tesla vehicles from entering its complexes and expressed concern about cameras on board.
In addition, The Wall Street Journal reported Friday that the government is restricting “military personnel and employees of major state-owned enterprises” from driving the U.S. automaker’s cars, citing concerns that the information the cars collect could be a source of national security leaks . “
The outlets quoted anonymous sources. The Chinese Foreign Ministry and Tesla on Monday did not immediately respond to requests for comment from CNN Business.
Musk compared the controversy via video call on Saturday to the one that plagued TikTok last year, a company he said did not receive “trust”. The app, which is owned by ByteDance, had a potential ban in the United States last year due to alleged national security reasons.
“The United States wanted to close TikTok. Fortunately, that did not happen,” Musk said. “A lot of people were worried about TikTok. But I think this kind of worry is unnecessary, and we need to learn lessons from it.”
High risk
Tesla has made a big splash in China over the past few years, especially after building its Shanghai Gigafactory. In 2019, the company began making cars there to bolster its presence in the world’s largest car market, with Musk even calling the plant a ‘template for future growth’. The company managed to retain full control of the project, which was unusual at the time. And it has enjoyed strong support from the government over the past few years.
But the U.S. carmaker also recently drew investigators from regulators, which has left some observers wondering if its special relationship with officials is over. Last month, Tesla was called by Chinese officials to ask questions about the quality of its Shanghai-made cars.
According to a report by The South China Morning Post quoting an anonymous source, the military ban was issued a few weeks ago because Chinese leaders became “very concerned” about the company’s vehicles. The newspaper further added that Musk may visit China next month, citing the same source.
China is critical to Tesla’s global strategy, and ‘remains the core’ that justifies a higher share price for Tesla in the coming years, according to Dan Ives, managing director of equities research at Wedbush Securities.
That’s why Wall Street has been ‘laser focused’ on any Tesla action over the last few days [or] Musk in response to this poker movement, ‘Ives wrote in a note to customers on Sunday.
“We believe that this statement … was important for Tesla and Musk to give directly to the Chinese and the government in Beijing, given its strategic importance. [electric vehicle] ambitions within China, ”he added.
‘With an ongoing Cold Tech war between the US and China, he said Tesla and others’ remain sitting in the crossfire and ultimately Musk must draw a clear line in the sand. ‘
– Shanshan Wang contributed to this report.
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