Tesla cars barred from some Chinese govt compounds over security concerns

BEIJING (Reuters) - Staff at some Chinese government offices have been told not to park their Tesla Inc cars inside government compounds due to security concerns over cameras installed on the vehicles, two people with knowledge of the matter said.

The people said officials of at least two government agencies in Beijing and Shanghai have been instructed verbally by supervisors not to park their Tesla electric cars at work. It wasn't clear how many cars were affected, the people said, declining to be identified due to the sensitivity of the matter.

It wasn't immediately clear whether all government offices in Beijing have imposed such restrictions, nor whether the measure was a formal government injunction or a step adopted by agency officials. It was also unclear whether curbs applied to state agencies nationwide.

While sensors and cameras that can assist driving feature in many automakers' vehicles, the people with knowledge of the matter said the restriction currently only applies to Tesla cars. In March, Tesla vehicles were banned from entering some military complexes in China, sources told Reuters then, citing security concerns over vehicle cameras.

Neither the State Council Information Office (SCIO), which handles media requests for China's government, nor Tesla China officials immediately responded to requests for comment.

The restriction provides a fresh indication of China's continued wariness of the U.S. electric carmaker amid tensions with Washington.

Facing greater scrutiny after safety and highly publicised customer service complaints in China, Tesla is boosting its engagement with mainland regulators and beefing up its government relations team, industry sources told Reuters previously.

China, the world's biggest car market, is the electric car maker's second-biggest market, accounting for about 30% of its sales. Tesla now makes electric Model 3 sedans and Model Y sport-utility vehicles in a Shanghai plant.

Automakers like Tesla have been equipping more vehicles with cameras and sensors that capture images of a car's surroundings. Control of how those images are used and where they are sent and stored is a fast-emerging challenge for the industry and regulators around the world.

Tesla cars have several external cameras to assist drivers with parking, changing lanes and other features. Chief Executive Elon Musk has commented frequently on the value of the data that Tesla vehicles capture which can be used to develop autonomous driving.

Days after the March ban on Tesla cars in military complexes, Musk appeared by video at a high-level Chinese forum, saying that if Tesla used cars to spy in China or anywhere, it would be shut down.

Tesla said it would open a data centre in China and is developing a data platform for car owners in China.

 

(Reporting by Beijing newsroom; Editing by Kenneth Maxwell)