China is restricting the use of Tesla’s electric vehicles by some state and military personnel
A Model Y vehicle displayed at a Tesla flagship store on Jan. 4, 2021 in Shanghai, China. Gao Yuwen | Visual China Group | Getty Images

Chinese Army Allegedly restricts use of Tesla cars among personnel

Citing national security concerns, China is restricting the use of Tesla’s electric vehicles by some state and military personnel, according to a Wall Street Journal report from Friday. A separate report, from Bloomberg, said the cars were banned in certain areas.

Shares of Tesla were down more as much as 4.4percent at one stage Friday before recovering. Shares closed up .26%.

It comes after the nation led a safety review of the vehicles, where it allegedly found that Tesla’s sensors could capture images of their surrounding locations. The Journal, citing people familiar with the matter, added that Tesla could get key information, including when and where the cars are being utilized. It might also track more personal information, like a cellphone’s contact list if it’s connected to the vehicle, according to the report.

China is ultimately concerned the information could be sent back to the United States, according to the Journal article.

China’s Defense Ministry did not immediately respond to a request for comment.

Tesla’s automated driving attributes, like Navigate on Autopilot, rely on cameras over competitors’ systems. Tesla CEO Elon Musk has famously dismissed lidar (light ranging and detection sensors) as overly costly and unnecessary for autonomous systems.

Tesla’s Made in China Model 3 and Model Y took approximately 13 percent of the electric vehicle market share in China in the first two months of 2021, according to an investigation by JL Warren Capital.

Tesla is facing increasing competition in China, even where attributes like Navigate on Autopilot are concerned. JL Warren founder and CEO Junheng Li stated Xpeng (XPEV) is the first Chinese automaker to use Nvidia hardware to create advanced driver assistance program in house, and its system is seen as top-performing in the nation, ahead of equivalent products from Nio and Tesla.

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On Thursday, SAIC Motor, China’s largest automaker, announced plans to develop automatic driving systems using lidar sensors and applications from Luminar Technologies

Tesla’s sales in China more than doubled last year to $6.66 billion, or 21% of the $31.54 billion total. In 2019, Tesla’s China sales reached $2.98 billion, only 12% of their $24.58 billion total.

Tesla did not immediately respond to a request for comment

Read the Jurnal

Source: CNBC