Tesla promises new China data centre as Beijing lays down the law on local storage of EV data

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Tesla, the electric vehicle maker founded by Elon Musk, will build a data centre in Shanghai by the end of June to handle data collected from its EVs amid greater public scrutiny of how personal information is handled and after Beijing pushed for local storage of data gathered by smart vehicles in the country.

The news was confirmed by Grace Tao, Tesla’s China head of communications and government affairs, who was quoted on Monday in the 21st Century Business Herald, a Chinese newspaper.

Tesla did not immediately respond to an e-mailed request for comment from the Post.

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Tao’s statement came just days after she told reporters that data collected from Tesla’s electric cars in China is stored in the country. This came after China’s military banned Tesla vehicles from its facilities due to concerns about the cameras installed on the cars.

Musk, the billionaire founder of Tesla, told a government forum in Beijing via a video conference in March that Tesla vehicles are not used for spying in China. “If Tesla uses cars to spy in China or anywhere, we will be shut down.”

Meanwhile, Tesla faced another public relations issue this week after a female protester jumped on top of a Model 3 in a protest over quality-control issues at the Shanghai International Automobile Industry Exhibition on Monday.

The video clip went viral on the Chinese internet and the official Xinhua news agency criticised Tesla for not being responsive to customer concerns. The protester was detained by Shanghai police and authorities said she will be detained for five days.

Elon Musk denies Tesla cars are being used for spying in China

China’s Ministry of Industry and Information Technology (MIIT) this month unveiled draft regulations stipulating that personal information and important data collected and generated during operations within the country must stay within the territory, with a particular reference to smart vehicle makers such as Tesla.

China has asked foreign companies to store user data on its own soil since 2017 when its Cybersecurity Law came into effect but has recently stepped up its rhetoric on the issue.

Foreign businesses in China are required to comply with the regulations if they want to access Chinese consumers. In early 2018, for example, Apple decided to host the iCloud accounts of Chinese users in a new Chinese data centre in Guizhou.

People walk by the Tesla Model 3 car at the Auto Shanghai 2021 motor show in Shanghai, China, 19 April 2021. Photo: EPA-EFE
People walk by the Tesla Model 3 car at the Auto Shanghai 2021 motor show in Shanghai, China, 19 April 2021. Photo: EPA-EFE

This move meant that Chinese authorities can ask Apple directly to hand over the iCloud data of Chinese users without having to go through the US legal system to retrieve data saved in the US.

Analysts say that securing the vast amounts of data now coming from vehicles comes with its own set of complexities.

Vehicle data spans a wide range of categories, from private user information to data on the vehicles themselves, says Charlie Dai, principal analyst at Forrester. While user privacy is important, the data is also critical to driver safety and national security.

“It’s crucial to ensure appropriate local storage for vehicle data, as this will further drive ecosystem collaboration between international manufacturers and local partners,” said Dai.

China is not unique in building up legal frameworks for upcoming technologies such as autonomous vehicles while simultaneously pushing for legal protection of user data.

However, the country has traditionally considered location data as sensitive. For example, when Coca Cola decided to equip its trucks with GPS trackers in 2013 for better efficiency, it ended up under investigation for illegal mapping of sensitive areas.

For the Chinese authorities, having smart vehicle data sent overseas would be problematic for a variety of reasons, said Mark Schaub and Atticus Zhao, attorneys who specialise in the auto industry at King & Wood Mallesons’ Corporate & Securities Group.

“Firstly, they would see it as being the private information of Chinese consumers,” said Schaub. “Secondly, there would be huge amounts of transfers. Thirdly, the information transferred overseas would be sensitive because it contains geospatial information that would show where and how people are moving.”

China’s draft guidelines are also intended to address another important area for smart cars, which is cybersecurity.

As cars become equipped with more software connected to the internet, supporting everything from entertainment systems to autonomous driving features, they are also open to more cybersecurity attacks.

This does not only endanger entire transport and logistics systems but also puts peoples’ lives at risk. It has already proven to be a costly issue for some carmakers.

Car manufacturer Chrysler recalled 1.4 million vehicles in 2015 after a pair of hackers showed they could remotely hijack a Jeep through its internet-connected entertainment system.

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