Tesla bows to Beijing once again, unveils Shanghai data centre to meet cybersecurity requirements

·3-min read

US electric vehicle (EV) giant Tesla has set up a data centre in Shanghai to locally store all data collected from its customers in mainland China, a move that is likely to set the tone for all overseas technology companies eyeing the Chinese market.

“We have set up a data centre in China to locally store data – collected by Tesla vehicles sold in mainland China – and we will add more. All data generated from cars sold in mainland China will be stored within China,” the company said in a post on China’s Twitter-like social media platform Weibo on Tuesday.

Tesla has faced a backlash from customers and officials in China, the world’s biggest EV market, over data. The country has required foreign companies to store user data on its soil since 2017, when its Cybersecurity Law came into effect, but has stepped up implementation of late. For instance, the set up of Tesla’s data centre follows a decision by Apple to host the iCloud accounts of its Chinese users in a new data centre in China’s southwestern Guizhou province.

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“Handling of data is a serious issue facing the world’s leading technology firms that operate in China,” said Yale Zhang, managing director of Automotive Foresight, an industry researcher in Shanghai. He added that a strengthened regulatory framework governing data collected by EV companies had resulted from not only the government’s national security concerns, but also from the point of view of safeguarding consumer interests.

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The data centre is not the first time Tesla has ceded ground in China. Late last month, it released the data log of a Model 3 that crashed in February in the country’s central Henan province to the car owner, after a wave of criticism over its safety and quality standards on social media. The owner, identified as Zhang Yazhou, jumped atop a Model 3 on display at the Shanghai Auto Show 2021 on April 19 to protest against the carmaker, claiming a brake malfunction had caused the crash.

Beijing has of late become increasingly cognisant about data privacy and security and has rolled out a slew of measures to regulate data generated by EVs, which are equipped with more software – everything from entertainment systems to autonomous driving features – that is connected to the internet.

The Cyberspace Administration of China, the country’s internet regulator, proposed a series of draft rules on May 12 titled the Provisions on the Management of Automobile Data Security. This followed the Ministry of Industry and Information Technology’s draft regulations unveiled last month, which stipulate that personal information and important data collected and generated during operations within the country must stay within Chinese territory, with a particular reference to smart EV makers such as Tesla.

In March, the Chinese military banned Tesla vehicles from its facilities due to concerns about cameras installed on its cars. Elon Musk, Tesla’s billionaire founder, told a government forum in Beijing the same month March that its vehicles were not being used to spy on China. “If Tesla uses cars to spy in China or anywhere, we will be shut down,” he said.

Tesla’s sales in mainland China hit a speed bump last month after it ran afoul of angry customers who have raised concerns about the safety and quality of its Shanghai-made EVs. It delivered 25,845 of these cars in April, 27.2 per cent less than the 35,478 units it sold a month earlier, according to the latest data from the China Passenger Car Association.

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