China lifts restrictions, gives all clear nod for Tesla cars as Musk lobbies hard in surprise visit to Beijing

Elon Musk
Elon Musk

Beijing | In a big relief for Tesla, its vehicles passed the key test of compliance with China’s data security rules as its billionaire CEO Elon Musk who air dashed to Beijing on Sunday met Premier Li Qiang to press for all clear approval for his cars which faced stiff competition from local rivals.

Musk’s Tesla, which in recent months faced entry bans in Chinese government-affiliated buildings besides military bases due to security concerns over data leaks, “passed” the security assessment by a state-owned Chinese industrial association on Monday.

The China Association of Automobile Manufacturers and the National Computer Network Emergency Response Technical Team/Coordination Centre of China on Monday published a list of 76 models of intelligent connected vehicles that meet the country’s auto data security requirements, including those from Tesla.

The list was released after security tests jointly conducted by the two organisations clearing models of local Chinese electric vehicles, including Li Auto, Lotus, Hozon New Energy Automobile, and NIO besides BYD and Tesla, state-run Xinhua news agency reported.

In tests starting in November 2023, cars were assessed to see if they met four compliance requirements — the anonymisation of facial and other information from outside the car, the default non-collection of in-car data, the in-car data processing, and the conspicuous notification of personal information processing.

The tests were carried out according to related laws and standards, and the carmakers submitted their models voluntarily, according to the association.

The association said the test aims to help regulate auto data processing, protect the rights of car users, and build a sound environment for auto data security and the industry.

Significantly, Tesla was included in the list that was released as Musk air dashed to Beijing on a surprise visit and met Chinese Premier Li Qiang and other officials.

This is Musk’s second visit to China which is Tesla’s second-biggest market. Built and put into operation in 2019, the Shanghai factory, Tesla’s first gigafactory outside the US, delivered 947,000 vehicles last year, which was 33 per cent more than in 2022.

His visit came amid reports that Tesla car drivers in China faced entry bans in government-affiliated buildings as security concerns with the US increased.

Chinese electric vehicles and its popular social media app TikTok faced restrictions and bans in the US over security and data breach concerns.

Reports said Tesla vehicles faced restrictions in China in an increasing number of meeting halls and exhibition centres across the country besides military bases.

Even highway operators, local authority agencies, and cultural centres reportedly began restricting the Tesla vehicles which began impacting its sales in China.

Musk arrived in Beijing on Sunday at the invitation of the China Council for the Promotion of International Trade Automobile company as Tesla has been in negotiation with the Chinese authorities about the lifting of all restrictions, the state-run China Daily reported.

Tesla said in a statement that the endorsement of its Model 3 and Model Y vehicles assembled at the Shanghai Giga factory would lead to an easing of restrictions on its cars’ access to certain state-backed entities, airports and motorways.

“The result of the review will give Tesla car owners and other fans of its cars a lot of confidence in driving them on the streets of China,” Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service, said.

“Since the CAAM is a government-backed auto industry association, the review certainly will have an influence on relevant authorities’ policymaking,” Chen told the Hong Kong-based South China Morning Post.

The endorsement also bodes well for the approval of Tesla’s Full Self-Driving (FSD) system, its autonomous driving software, in China for which Musk reportedly is lobbying.

In his meeting with Musk, Premier Li said Tesla’s operations in China represented a successful example of an economic tie-up between China and the US as he encouraged more cooperation between the two countries.

Musk’s visit to Beijing aims to bring the Austin, Texas-based carmaker’s autonomous driving technology to China amid intensified competition with local competitors in an EV market that accounts for about 60 per cent of global sales, the Post reported on Sunday.

Calling Tesla’s development in China a successful example of trade cooperation between Beijing and Washington, Premier Li Qiang expressed the hope that the US will work in the same direction as China to promote the stable development of bilateral ties.

China’s huge market will always remain open to foreign enterprises, he emphasised.

Li pledged to continue to expand market access and improve services to provide a better business environment and stronger support for foreign enterprises, allowing them to invest in China with confidence and assurance.

Musk said thanks to the hard work and wisdom of the Chinese team, Tesla’s Shanghai gigafactory is his company’s top performer.

Musk said it was “good to see electric vehicles making progress in China”. “All cars will be electric in the future,” he added.

According to China Daily, the country’s new energy vehicle sales surged 37.9 per cent year-on-year to about 9.5 million last year, accounting for more than 60 per cent of the global total.

Musk’s visit also came as the 2024 Beijing International Automotive Exhibition is underway. The auto show started on Thursday and will run through Saturday.

Supreme Court rejects Musk appeal over tweets that must be approved by Tesla

Washington | The Supreme Court on Monday rejected an appeal from Elon Musk over a settlement with securities regulators that requires him to get approval in advance of some tweets that relate to Tesla, the electric vehicle company he leads.

The justices did not comment in leaving in place lower-court rulings against Musk, who complained that the requirement amounts to “prior restraint” on his speech in violation of the First Amendment.

The case stems from tweets Musk posted in 2018 in which he claimed he had secured funding to take Tesla private. The tweets caused the company's share price to jump and led to a temporary halt in trading.

The settlement with the Securities and Exchange Commission included a requirement that his tweets be approved first by a Tesla attorney. It also called for Musk and Tesla to pay civil fines over the tweets in which Musk said he had “funding secured” to take Tesla private at $420 per share.

The funding wasn't secured, and Tesla remains public.

The SEC's initial enforcement action against Musk alleged that his tweets about going private violated anti-fraud provisions of securities laws. The agency began investigating whether Musk violated the settlement in 2021 when he did not get approval before asking followers on Twitter, now X, if he should sell 10% of his Tesla stock.

Musk acquired Twitter in 2022.

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